Protection and Recovery of MSMEs in the midst of the Covid-19 Pandemic in Indonesia
Setia Putra, SH, MH

Faculty of Law, University of Riau

Abstract

The role of Micro, Small and Medium Enterprises (MSMEs) are the most important pillars in the national economy. Based on BPS data in 2017, MSME business units occupy 99% of the total businesses in Indonesia with a total of 62.9 million. Not only that, MSMEs absorb 96% of the total employment and contribute 60.3% of Indonesia^s gross domestic product (GDP). However, the Covid-19 pandemic for almost 2 years has had an impact on all sectors, one of them is the MSME sector. In 2021 the economic growth rate and inflation rate decrease at 4% and 1.5%. One of the reasons is because one of the strategic sectors in the national economy, namely MSMEs, has experienced a decline in business activities as a result of the pandemic from the supply and demand sides. This is also a result of the implementation of Large-Scale Social Restrictions (PSBB) or now known as the Enforcement of Community Activity Restrictions (PPKM). This raises four economic problems faced by MSME actors during the pandemic. Namely, the decline in sales as a result of the PSBB regulations, the capital difficulties due to difficult capital turnover, the product distribution barriers, and the raw material difficulties. To revive this abnormal condition, a fast policy from the current Indonesian government is needed. One of them is the issuance of Government Regulation Number 7 of 2021 concerning Ease, Protection, and Empowerment of Cooperatives and Micro, Small and Medium Enterprises (PP UMKM).
This research is expected to examine how the legal protection and recovery strategies for MSMEs are in the midst of the Covid-19 pandemic in Indonesia. This type of research is normative legal research and the nature of the research is descriptive.
The government has prepared five schemes for protection and economic recovery for the micro, small and medium enterprises (MSMEs) sector. A number of schemes, which also include special programs for ultra-micro business actors, have been prepared in order to survive in the

Keywords: Protection, Recovery and Covid-19

Topic: Law