Indonesia’s economic growth ranked second best in the world. Data showed that through Semester 1 2012 China’s economy grew by 8.7%, followed by Indonesia 6.4% and India 6.1%.
Turkey, whose growth was posted at 8.5% on the average, now grows only by 2 percent. Meanwhile Brazil which was one of the BRIC group [Brazil, Russia, India, China], a club of nations of high percentage growth, now only managed to grow below 2 percent. Indonesia’s fellow Asian nations, let’s say Thailand, only grew by 2 percent, Malaysia 4 percent, the Philippines and Singapore 2 percent respectively.
This year, Indonesia’s annual growth was predicted to be in the range of 6.3% - 6.5% and next year 2013 between 6.5% - 6.87%. Meanwhile the world’s Economic growth this was only posted at 3.3%, while next year it was projected to be at 3.8%.
Indonesia’s growth attainment above 6 percent was worthy of appreciation, especially when compared against world’s economic growth. Some how the attainment needed to be responded to the critical way.
Economists circles rated that Indonesia’ economic growth was “anomalous” because it was not followed by betterment of people’s welfare. In fact poverty figure keep falling each year, from 24%in 2009 to become 12.5 percent this year or 30 million people. And yet if only the standard of property, i.e. monthly expenditure were slightly raised, the number of poor people instantly swell.
The World Bank set a standard that people with income of below USD per day was classified as poor people. The fact was that income of USD2 per day was not enough to support oneself, not to mention to support a family.
It was not possible for a person with income of slightly above USD 2 per day, let’s say USD 3 per day to be able to support himself plus a wife and two children. So if the criterion of USD 2 was not regarded as poor, it would trigger a polemic. It was about time to review the margin and to adjust it to the objective condition of the people.
There were at least four factors which made a certain economic growth to be termed “anomalous”. Firstly Indonesia’s economy was propelled by overseas debt whose value continued to increase. Today the dept reached Rp 2.870 trillion with a tendency to increase each year. Like it not, debt had become the Government’s main source of income. The Government also proudly claimed that the debt-to-GDP ratio was still low, i.e. around 30% way below the permissible level of 60%.
By entertaining the belief that “debt-to GDP ratio is still low” the Government seemed to be lost in a life of self-indulgence and keep on borrowing money. In fact ratio was even greater if debt to domestic creditors were included in the calculation. Basically to borrow money was and with full responsibility because the final objective was to promote people’s welfare.
Secondly, economic growth was propelled by increased people’s consumption which stemmed from price increase and sustained by credit growth, in this case consumption. In fact the growth of consumptive credit at the national banking sector today was low, i.e. around 20 percent, compared to productive credit growth which was 25 percent.
However, unless controlled and halted, it was always possible that consumptive credit would soar up to exceed growth of productive credit. Under such circumstances, there would be economic overheating which might endanger national economic stability. It seemed right for Bank Indonesia to launch the policy of Loan-to-value [LTV] by way of increasing down payment for mortgage [KPR] and credit for automotive [KKB].
Thirdly, economic growth was driven by export of raw material for example minery products, oil and gas, and plantation yields and forestry products where there was no added value and employment. By selling primary commodities raw and unprocessed, with no added value at all, it would not only drain Indonesia’s natural wealth buyer countries would be having the pleasure of putting added value on them and enjoy the end result.
Fourthly, growth was supported by foreign investors which made Indonesia’s natural resources dominated by foreigners. The result was that people no longer could benefit from the natural resources through better living. Notably foreign investors were investing their business in minery sector while domestic investors were investing in non-minery sectors.
The above-mentioned growth factors called for Government’s serious attention to be followed up by sound action and corrective measures. Indeed all people would have their tangible impact in the form of people’s prosperity as indicated by lessened poverty and joblessness.
An inclusive economic growth, in the sense that it could open wider access to all components of the nation, needed to be realized. In the spirit of healthy an open competition, where the state and the Government in the name of the people could take corrective measures while the people could make intervention on the policy being adopted.
To give protection for small and micro business by the Government became imperative because this segment included tens of millions of trades not to mention their families. Hence the qualitative aspect of people which were the core of growth process must not be overlooked as performance symbols for the sake of image building of the Government.
Business News - September 21, 2012