9th Economix Essay Competition 2011
Conducted by Economic Faculty of University of Indonesia
The Triangle Power Strategy in Maximizing Small Medium Enterprises to
Accelerate ASEAN Economic Community 2015 by Rohaya Rahmadani and Soni Ariawan
No country in the world that does not target high rate of economy
development because it is one of the indicators that determines whether a country
developed or not. In fact, the economy development of countries in the world is a
big question for countries with very poor of economy development. It is later
urgent for some countries with high level of poverty and unemployment. As the
result, each country implements various program to achieve its economic target.
However, it is impossible to gain it without cooperation with other country. Thus,
an initiative to gather in a certain region is highly appreciated and a solution as
well. Association of South Asian Nation (ASEAN) is a form of such cooperation which cooperates in some spheres of life, such as ASEAN Economic Community,
ASEAN Socio-Culture Community, and ASEAN Political-Security Community.
Considering description above, ASEAN Economic Community (AEC) is the most
relevant cooperation. By gathering in AEC, all members of ASEAN can freely
learn from countries which successfully gain high level of economy development.
Most of all, the most important things in AEC are economic integrity and
equitability.
From that cooperation, all members of ASEAN agree to arrange
agreements and strategies. One of the agreements is described into AEC
Blueprint. This declaration reflects the hope of all members. All members hope
that AEC Blueprint will lead their endeavors to achieve at least equal economy
development considering the various economy growths of those countries.
ASEAN members are classified into three categories in term of economy
development. First of all, Singapore is the icon of developed country. Secondly,
the dynamic countries are Malaysia and Thailand. Thirdly, Indonesia, Philippine,
Brunei involve in countries with medium income. The last is countries which is
still undeveloped; they are Cambodia, Myanmar, Laos, and Vietnam (CLMV).
One of the points declared in AEC Blueprint is the implementation of single
market and production base. It means that every single product of a country must
compete with the same kind of product from the other countries. On the other
word, only product with the best quality will get the highest profit. Thus, each
country should be ready to face any possibilities, for example the domination of
certain product by a country. This is conversely a good way to learn about global
economy competition for all members of ASEAN considering their low economy
development when comparing with the other countries with vast number of
products, such as China and India. This condition apparently seems contradiction
with coin as an analogy. There are only two possibilities. It can be profit or
conversely loss. The difference is on how each country maximizes the source it
has. Moreover, the deadline of AEC application is made earlier than before; no
longer in 2020, it is in 2015. This is decided because all countries believe that the
application of AEC must be accelerated because it has numerous advantages for
all members so that the sooner AEC applied the better economic development will
be. In conclusion, by the time AEC applies, all country must be nationally stable
in term of economy development in order to avoid economy development gap
because all aspects, such as flow of services, professionals, investment, capital,
skilled labor will be freer. There is little or even no problem with developed
countries, but the problem is on the countries with low rate of economy
development.
Since the target of AEC is to gain equitable economy development,
economy programs and activities must involve societies because the main purpose
of any economy plans is to stabilize and prosper societies as the components of
country. To realize this plan, some countries initiate programs that involve most
of societies, for example small-medium enterprises. It is the easiest way to realize
it because it does not need too much investment so that anyone can establish it.
Moreover, it has been proven that the number of enterprises in a country can be an
indicator whether its economy can potentially grow or not. As stated by
Sjarifuddin Hasan (Coperation and Small-Medium Enterprises Minister of
Indonesia), to reach continuous economy growth and equitable economy, at least a
country has 2% of enterprise s from the total number of nations. It has been also
proven by some countries that have great economy development. For example,
the percentage of enterprises in Malaysia reaches 2,1%, Thailand 4,1 %, Korea
Selatan 4 %, Singapore 7,2 %, and United State of America 11,5 % (Agus, 2007).
Therefore, it can be concluded that the number of enterprises determines the
economy development because there must be competition among enterprises so
that each countries get used to compete countries with greater influence. Besides,
enterprises can potentially attract either domestic or foreign investors so that a
country can make profit as much as possible. Thus, enterprises should be higher
both in term of quality and quantity. The reluctance of some ASEAN members to
create huge number of enterprises causes vast amount of loss. Even though some
members have obtained promising position in world business, for instance
Thailand (12) , but there are more countries remain in low position, for example
Brunei Darussalam (96) and Indonesia (122) from 185 countries (Doing Business
2010, International Finance Corporation, World Bank). Indeed, empowering
small-medium enterprises involves in strategic target declared in AEC Blueprint.
From those reasons above, it is clear that enterprises will much help a
country to establish stable economy because if a country wants to involve in
global economy, it must possess national economic stability. Now, the question is
that how to stimulate enterprises, small-medium enterprises in particular, to start
activating the economy programs. Actually, the governments of ASEAN members
which has unstable economy have well-concept plan to grow small-medium
enterprises and support it in term of fund regarding it is one of the ways to reach
equitable economy development. The other problem is that how to realize this
well-concept plan. It cannot be simply solved. It requires long processes, yet it is
possible. The writers analyze that the government has not empowered the
university yet to maximize the students to be entrepreneurs. We really know that
students as intellectual groups of persons are potential to be empowered.
Moreover, we believe in the “Triangle Power Strategy”; the power of university,
the power of students and the power of society. Those powers will be integrated in
one branch in order to create an effective small medium enterprise.
The writers propose some mechanisms in the frame of the “Three Power
Strategy” as follow:
1. Inserting entrepreneurship subject as the component of education system in
University
Even though financial support does not work well, there is another alternative to
deal with this phenomenon; by involving the other institution other than
Economic Minister, Trade Minister, and so forth, that is education minister. It at
glance does not show mutual relationship with maximizing small-medium
enterprises. However, this condition forces a country to enhance the quality of
human resource so that it will be ready by the time of AEC implementation.
Human resource can be improved through education system as what developed
countries have proven. For example, if a country wants to improve human
resource quality in term of nationalization, it will involve the hope through
education minister in form of curriculum, specifically into subject. In this case, the
hope of a country to enhance human resource can be realized through the
specification of economy goal itself, for instance entrepreneurship. Inserting
entrepreneurship is the most practical step and university is the closest institution
that can run it. Further, the university students can widely exemplify the practice
of small-medium enterprises to the society.
University is the most promising unit among stages of education and the
closest environment with society. It fits one of principles of university,
worshiping toward society. It means that much or less the society will look at the
quality of the university alumni. It is also a turning point to make a change and
progress in particular for citizens in all spheres of life, including economy, known
as sensitive part in a country because it determines whether a country is
prosperous or not.
University as a unit of education is run with a curriculum system that
reflects the future and hope of a country. Related to economy development, a
country can also insert its target through the smallest unit of education, that is
subject. For example, Indonesia targets vast economy growth within few years.
Using the official data from Small-Medium Enterprises Minister about the
indicator to achieve equitable economy in which at least it is 2% enterprises of
total population, it starts by inserting entrepreneurship as the compulsory subject.
It means that all field of study must learn it with the assumption that the subject
will stimulate greater economy activities, the importance of entrepreneurship
learning from the experience of some countries, and all students are actually
potential to independently establish enterprise. Further, cooperating with fund
minister and trade minister, education minister makes policy to apply
entrepreneurship as compulsory subject in university level.
2. University empowers its students by providing entrepreneurship program
Because the government has decided to involve entrepreneurship as subject, it
must be followed up. Government cooperating with fund minister and trade
minister can supply capital and non capital support (workshop, training, and
seminary). Here, what students obtain from entrepreneurship subject then takes
into the reality so that it will be meaningful learning. For example in Indonesia, in
the University of Mataram in which the writers study, cooperates with a non-
governmental bank in term of capital. Students may establish any kind of small-
medium enterprises by proposing an enterprise proposal. This program called
GEMA (Gerakan Mahasiswa Wirausaha) or students entrepreneurship movement.
The selected enterprise proposal will be funded. This program stimulates students
to starts establishing enterprise. In fact, Mataram University grows more than one
hundred entrepreneurs every year through GEMA. The step is not stagnant until
the student’s environment. The chosen students in GEMA program will
implement those enterprise proposals to the society. This is the summit of this
program when the society takes part as the subject of enterprise through the
students as a mediator. We cannot imagine what will happen if one university can
create more than one hundred entrepreneurs, so how many university are there in
Indonesia? In addition, we believe the “Three Powers Strategy” is the simplest
strategy that government can realize to face AEC 2015.
3. Study comparative
University students are the most appropriate representative of a group of society
since they are intellectuals. After the process of bringing small-medium
enterprises, they can compare the result with the other countries. Here, countries
which are not developed enough can learn how developed country organizes their
enterprises. In this gathering, ASEAN members can take reference from the
success country of SMEs and altogether can be recommendation for other
countries. For example, students from CMLV can easily share their own
mechanism of enterprises so that they know in what way they are lack.
4. Specify the entrepreneurship sector to the priority
In AEC Blueprint, there are twelve priority sectors. The current condition is that
these sectors are being held by industries and companies if single market and
production base are applied if the steps above run properly, it can be proceeded
into the specification of sectors that will receive supply of capital. If this step is
directly practiced, the single market and production base will naturally grow.
5. Evaluation
It is effective to narrow down development gap. It will create competitive region,
and lead to global economy. This is the last step of small-medium enterprises
empowering mechanisms in which students can make a conference by using the
conference provided by AEC, that is ASEAN Communication Plan. All members
of ASEAN through the ASEAN Communication plan can make such kind of
cooperation and arrangement of mechanism which are represented by university
students so that within four years economy development gap can be narrowed.
Small-medium enterprise surprisingly contributes a step to accelerate AEC
2015. It actually has been planned by almost all members of ASEAN as its results
to increase economy development. However, it seems that there is no concrete
movement to maximize it even though each country knows well how it works. In
this case, university has a significant role. The society needs more than a well-
concept plan. Concerning this phenomenon, practice is more valuable to stimulate
society to widely be active in economic activities, entrepreneurship in particular,
because by making sure their participation in it will give a guarantee that economy
development gap can be narrowed down. If the society keeps being active in such
activities, there are two possibilities; being small-medium enterprises practitioners
or being employer. This practice can be provided by university because it is
supported through the curriculum that later creates various programs focusing on
small-medium enterprises. This is the role of university to empower students and
to provide enterprise program. Then, it is the role of students to empower the
society by implementing the enterprise proposal in the environment of society. On
the other word, a country needs only to maximize the existence of small-medium
enterprises and even create new enterprises through the “Three Power Strategy”.
Finally, the writers already gave example in Mataram University through GEMA
program reflected the “Three Power Strategy” to create and maximize small
medium enterprises to narrow down the economic development gaps among
ASEAN countries.
References
ASEAN Economic Community Blueprint. (2007) ASEAN 13th Summit.
Singapore
Departemen Perdagangan Republik Indonesia. Menuju ASEAN Economic
Community 2015
Hunton & William. (2008). Introduction to the ASEAN Community. Singapore :
International Law Office
Y, Agus. (2011, June 20). Pola Pencangkokan Usaha Perkecil Kegagalan
Wirausaha. Pkesinteraktif. Retrieved from
http://www.pkesinteraktif.com/bisnis/umum/keuangan-mikro/2638-pola-
pencangkokan-usaha-perkecil-kegagalan-wirausaha.html
Accelerate ASEAN Economic Community 2015 by Rohaya Rahmadani and Soni Ariawan
No country in the world that does not target high rate of economy
development because it is one of the indicators that determines whether a country
developed or not. In fact, the economy development of countries in the world is a
big question for countries with very poor of economy development. It is later
urgent for some countries with high level of poverty and unemployment. As the
result, each country implements various program to achieve its economic target.
However, it is impossible to gain it without cooperation with other country. Thus,
an initiative to gather in a certain region is highly appreciated and a solution as
well. Association of South Asian Nation (ASEAN) is a form of such cooperation which cooperates in some spheres of life, such as ASEAN Economic Community,
ASEAN Socio-Culture Community, and ASEAN Political-Security Community.
Considering description above, ASEAN Economic Community (AEC) is the most
relevant cooperation. By gathering in AEC, all members of ASEAN can freely
learn from countries which successfully gain high level of economy development.
Most of all, the most important things in AEC are economic integrity and
equitability.
From that cooperation, all members of ASEAN agree to arrange
agreements and strategies. One of the agreements is described into AEC
Blueprint. This declaration reflects the hope of all members. All members hope
that AEC Blueprint will lead their endeavors to achieve at least equal economy
development considering the various economy growths of those countries.
ASEAN members are classified into three categories in term of economy
development. First of all, Singapore is the icon of developed country. Secondly,
the dynamic countries are Malaysia and Thailand. Thirdly, Indonesia, Philippine,
Brunei involve in countries with medium income. The last is countries which is
still undeveloped; they are Cambodia, Myanmar, Laos, and Vietnam (CLMV).
One of the points declared in AEC Blueprint is the implementation of single
market and production base. It means that every single product of a country must
compete with the same kind of product from the other countries. On the other
word, only product with the best quality will get the highest profit. Thus, each
country should be ready to face any possibilities, for example the domination of
certain product by a country. This is conversely a good way to learn about global
economy competition for all members of ASEAN considering their low economy
development when comparing with the other countries with vast number of
products, such as China and India. This condition apparently seems contradiction
with coin as an analogy. There are only two possibilities. It can be profit or
conversely loss. The difference is on how each country maximizes the source it
has. Moreover, the deadline of AEC application is made earlier than before; no
longer in 2020, it is in 2015. This is decided because all countries believe that the
application of AEC must be accelerated because it has numerous advantages for
all members so that the sooner AEC applied the better economic development will
be. In conclusion, by the time AEC applies, all country must be nationally stable
in term of economy development in order to avoid economy development gap
because all aspects, such as flow of services, professionals, investment, capital,
skilled labor will be freer. There is little or even no problem with developed
countries, but the problem is on the countries with low rate of economy
development.
Since the target of AEC is to gain equitable economy development,
economy programs and activities must involve societies because the main purpose
of any economy plans is to stabilize and prosper societies as the components of
country. To realize this plan, some countries initiate programs that involve most
of societies, for example small-medium enterprises. It is the easiest way to realize
it because it does not need too much investment so that anyone can establish it.
Moreover, it has been proven that the number of enterprises in a country can be an
indicator whether its economy can potentially grow or not. As stated by
Sjarifuddin Hasan (Coperation and Small-Medium Enterprises Minister of
Indonesia), to reach continuous economy growth and equitable economy, at least a
country has 2% of enterprise s from the total number of nations. It has been also
proven by some countries that have great economy development. For example,
the percentage of enterprises in Malaysia reaches 2,1%, Thailand 4,1 %, Korea
Selatan 4 %, Singapore 7,2 %, and United State of America 11,5 % (Agus, 2007).
Therefore, it can be concluded that the number of enterprises determines the
economy development because there must be competition among enterprises so
that each countries get used to compete countries with greater influence. Besides,
enterprises can potentially attract either domestic or foreign investors so that a
country can make profit as much as possible. Thus, enterprises should be higher
both in term of quality and quantity. The reluctance of some ASEAN members to
create huge number of enterprises causes vast amount of loss. Even though some
members have obtained promising position in world business, for instance
Thailand (12) , but there are more countries remain in low position, for example
Brunei Darussalam (96) and Indonesia (122) from 185 countries (Doing Business
2010, International Finance Corporation, World Bank). Indeed, empowering
small-medium enterprises involves in strategic target declared in AEC Blueprint.
From those reasons above, it is clear that enterprises will much help a
country to establish stable economy because if a country wants to involve in
global economy, it must possess national economic stability. Now, the question is
that how to stimulate enterprises, small-medium enterprises in particular, to start
activating the economy programs. Actually, the governments of ASEAN members
which has unstable economy have well-concept plan to grow small-medium
enterprises and support it in term of fund regarding it is one of the ways to reach
equitable economy development. The other problem is that how to realize this
well-concept plan. It cannot be simply solved. It requires long processes, yet it is
possible. The writers analyze that the government has not empowered the
university yet to maximize the students to be entrepreneurs. We really know that
students as intellectual groups of persons are potential to be empowered.
Moreover, we believe in the “Triangle Power Strategy”; the power of university,
the power of students and the power of society. Those powers will be integrated in
one branch in order to create an effective small medium enterprise.
The writers propose some mechanisms in the frame of the “Three Power
Strategy” as follow:
1. Inserting entrepreneurship subject as the component of education system in
University
Even though financial support does not work well, there is another alternative to
deal with this phenomenon; by involving the other institution other than
Economic Minister, Trade Minister, and so forth, that is education minister. It at
glance does not show mutual relationship with maximizing small-medium
enterprises. However, this condition forces a country to enhance the quality of
human resource so that it will be ready by the time of AEC implementation.
Human resource can be improved through education system as what developed
countries have proven. For example, if a country wants to improve human
resource quality in term of nationalization, it will involve the hope through
education minister in form of curriculum, specifically into subject. In this case, the
hope of a country to enhance human resource can be realized through the
specification of economy goal itself, for instance entrepreneurship. Inserting
entrepreneurship is the most practical step and university is the closest institution
that can run it. Further, the university students can widely exemplify the practice
of small-medium enterprises to the society.
University is the most promising unit among stages of education and the
closest environment with society. It fits one of principles of university,
worshiping toward society. It means that much or less the society will look at the
quality of the university alumni. It is also a turning point to make a change and
progress in particular for citizens in all spheres of life, including economy, known
as sensitive part in a country because it determines whether a country is
prosperous or not.
University as a unit of education is run with a curriculum system that
reflects the future and hope of a country. Related to economy development, a
country can also insert its target through the smallest unit of education, that is
subject. For example, Indonesia targets vast economy growth within few years.
Using the official data from Small-Medium Enterprises Minister about the
indicator to achieve equitable economy in which at least it is 2% enterprises of
total population, it starts by inserting entrepreneurship as the compulsory subject.
It means that all field of study must learn it with the assumption that the subject
will stimulate greater economy activities, the importance of entrepreneurship
learning from the experience of some countries, and all students are actually
potential to independently establish enterprise. Further, cooperating with fund
minister and trade minister, education minister makes policy to apply
entrepreneurship as compulsory subject in university level.
2. University empowers its students by providing entrepreneurship program
Because the government has decided to involve entrepreneurship as subject, it
must be followed up. Government cooperating with fund minister and trade
minister can supply capital and non capital support (workshop, training, and
seminary). Here, what students obtain from entrepreneurship subject then takes
into the reality so that it will be meaningful learning. For example in Indonesia, in
the University of Mataram in which the writers study, cooperates with a non-
governmental bank in term of capital. Students may establish any kind of small-
medium enterprises by proposing an enterprise proposal. This program called
GEMA (Gerakan Mahasiswa Wirausaha) or students entrepreneurship movement.
The selected enterprise proposal will be funded. This program stimulates students
to starts establishing enterprise. In fact, Mataram University grows more than one
hundred entrepreneurs every year through GEMA. The step is not stagnant until
the student’s environment. The chosen students in GEMA program will
implement those enterprise proposals to the society. This is the summit of this
program when the society takes part as the subject of enterprise through the
students as a mediator. We cannot imagine what will happen if one university can
create more than one hundred entrepreneurs, so how many university are there in
Indonesia? In addition, we believe the “Three Powers Strategy” is the simplest
strategy that government can realize to face AEC 2015.
3. Study comparative
University students are the most appropriate representative of a group of society
since they are intellectuals. After the process of bringing small-medium
enterprises, they can compare the result with the other countries. Here, countries
which are not developed enough can learn how developed country organizes their
enterprises. In this gathering, ASEAN members can take reference from the
success country of SMEs and altogether can be recommendation for other
countries. For example, students from CMLV can easily share their own
mechanism of enterprises so that they know in what way they are lack.
4. Specify the entrepreneurship sector to the priority
In AEC Blueprint, there are twelve priority sectors. The current condition is that
these sectors are being held by industries and companies if single market and
production base are applied if the steps above run properly, it can be proceeded
into the specification of sectors that will receive supply of capital. If this step is
directly practiced, the single market and production base will naturally grow.
5. Evaluation
It is effective to narrow down development gap. It will create competitive region,
and lead to global economy. This is the last step of small-medium enterprises
empowering mechanisms in which students can make a conference by using the
conference provided by AEC, that is ASEAN Communication Plan. All members
of ASEAN through the ASEAN Communication plan can make such kind of
cooperation and arrangement of mechanism which are represented by university
students so that within four years economy development gap can be narrowed.
Small-medium enterprise surprisingly contributes a step to accelerate AEC
2015. It actually has been planned by almost all members of ASEAN as its results
to increase economy development. However, it seems that there is no concrete
movement to maximize it even though each country knows well how it works. In
this case, university has a significant role. The society needs more than a well-
concept plan. Concerning this phenomenon, practice is more valuable to stimulate
society to widely be active in economic activities, entrepreneurship in particular,
because by making sure their participation in it will give a guarantee that economy
development gap can be narrowed down. If the society keeps being active in such
activities, there are two possibilities; being small-medium enterprises practitioners
or being employer. This practice can be provided by university because it is
supported through the curriculum that later creates various programs focusing on
small-medium enterprises. This is the role of university to empower students and
to provide enterprise program. Then, it is the role of students to empower the
society by implementing the enterprise proposal in the environment of society. On
the other word, a country needs only to maximize the existence of small-medium
enterprises and even create new enterprises through the “Three Power Strategy”.
Finally, the writers already gave example in Mataram University through GEMA
program reflected the “Three Power Strategy” to create and maximize small
medium enterprises to narrow down the economic development gaps among
ASEAN countries.
References
ASEAN Economic Community Blueprint. (2007) ASEAN 13th Summit.
Singapore
Departemen Perdagangan Republik Indonesia. Menuju ASEAN Economic
Community 2015
Hunton & William. (2008). Introduction to the ASEAN Community. Singapore :
International Law Office
Y, Agus. (2011, June 20). Pola Pencangkokan Usaha Perkecil Kegagalan
Wirausaha. Pkesinteraktif. Retrieved from
http://www.pkesinteraktif.com/bisnis/umum/keuangan-mikro/2638-pola-
pencangkokan-usaha-perkecil-kegagalan-wirausaha.html
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