Small and Medium Enterprises in Indonesia: Old Policy Challenges for a New Admininstration

This article begins with a review of the government's policy framework, together with some conceptual and analytical issues as they relate to SMEs. Next, the empirical evidence on SMEs is examined, referring both to aggregate, macro-level evidence and case studies, and including some of the emerging material on the impact of the recent crisis. The article then asks whether there is any special case for intervention in favor of SMEs and points to areas where government policy has and has not worked. Finally, it closes by highlighting gaps in the database and research material. Following much of the literature, the discussion focuses primarily on the industrial sector, although where relevant the net is cast more widely.