Analysis of the Role of Micro Small and Medium Enterprises in the National Economic Recovery Policy During the Covid 19 Pandemic

This study aims to analyze the effect of the number of business units, the number of workers, and the number of exports of the Micro, Small and Medium Enterprises (MSME) sector on Indonesia’s gross domestic product (GDP), then analyze the effect of the national economic recovery policy (PEN) on GDP in the future. the covid 19 pandemic. The data used are the number of MSME business units, the number of workers, the number of exports of the MSME sector and the total GDP of the MSME sector from 2000-2020. Using the VECM Model. it was found that the variables of the number of exports, the number of workers and the number of MSMEs did not have a significant effect on GDP in the short term, so rationally the increase in the number of GDP was the result of an increase in the number of exports of MSMEs, the number of workers and the number of MSMEs simultaneously. While in the long term, the number of exports of the MSME sector does not have a significant effect, in contrast to the number of workers and the number of MSMEs that have a significant effect on GDP. The PEN Policy Simulation was carried out by increasing the number of MSMEs by 10%, as an illustration of the success of the policy that did not have an impact on increasing the GDP of the MSME sector both in the short term and in the long term. This study illustrates that the PEN policy is not effective in increasing the GDP of the MSME sector. The limitation of this research is that it only focuses on the core variables that make up the GDP of the MSME sector, thus ignoring other supporting factors.