Minggu, Februari 13, 2011

MAIN REPORT: Waiting For Realization of SBY Sweet Promise

Problems of poverty and the low quality of human life, directly confronting the economic and the people welfare team in the SBY-Boediono cabinet . Without equality, high economic growth is clearly not enough. Could "rainbow cabinet" realize the sweet promises of  SBY?

The inauguration of ministers in the United Indonesia Cabinet (KIB) vol II, marking the birth of a new government. There was no time for the party salvation. In contrast, members of the cabinet, especially the ministers of economics and welfare of the people, must be immediately rolled up their sleeves. They should help the president fulfill the sweet promises during the presidential election campaign, in past July.

There are a series of promises that often said by those couple, Susilo Bambang Yudhoyono (SBY)-Boediono, during past campaigns. Of poverty alleviation, job creation, low school fees, to free medical treatment. Social issues concerning the economic livelihood of many are effective to attract the sympathy of voters.

Armed with the slogan "Continue!", The couple SBY-Boediono disclose the achievements the Government of Indonesia during the period 2004-2009. In the health sector, the health functions budget   increases tripled, from USD 5.8 trillion in 2005 to around Rp 16 trillion in 2008. These additions are used for rolling the health services in health centers, posyandu, or through the Health Care Insurance Program for Poor People (Jamkesmas).

Achieving similar happens in the education sector, the budget increases to reach 20% of the national budget in 2009, or equivalent to Rp 224 trillion. Previously, the education budget is in the range of 10% of the national budget. These additions are used for the implementation of BOS Program (school operational costs), free education, increased teacher salaries and operational costs of education (BOP).

Then there's flagship program, the direct cash assistance (BLT) which has purpose as a poverty alleviation and burden reduction of the poor due to rising fuel prices (fuel). This year target is reducing the number of poor people only 8.2% of the total population. In accordance with the Central Statistics Agency (BPS) record, the post-fuel price hike in 2006, the poverty rate showed a downward trend (see table: Number of Population in Poverty in Indonesia).

Unemployment rate can also be reduced, from 10.9 million in 2005 to 9.3 million people this year. Economic growth on average increased from 5% in 2004 to 6.1% in 2008. In this year, due to the global financial crisis, economic growth fell to only 4.5% of the original target of 7%.

KIB Vol I achievement could have been given appreciation. But some of them are only real in paper. Because the reality on the ground is not as beautiful as the statistics. Some of the poor in various parts of the country are forced to continue paying the hospital costs, although obviously they do not have the money. They are also difficult to attend school because of limited seating capacity for free public schools.

Such conditions certainly worsen quality of life of Indonesian citizens. The result can be seen in the report Human Development Report of the United Nations Development Program (UNDP), which was released in October 2009. Indonesia Human Development Index (HDI) ranking declined from 107 positions in 2006 to 111 this year from 182 countries.

HDI is a comparative measure of life expectancy, literacy, education, and income per capita. This index using a scale from 0 to 1 was used to classify the developed countries, developing, or underdeveloped. Indonesia HDI figures recorded at 0.734 so that the boundary line between the developing and underdeveloped countries.

Indonesia's HDI figures continued to increase during the period 1980 to 2007. The average increase 1.26% per year from 0.522 to 0.734 at this time (new UNDP publication is based on data in 2007). But the ratings tended to fall.

In fact, even for the ASEAN region, Indonesia is only ahead of Vietnam, Laos, Myanmar, Cambodia, and Timor Leste. Indonesia was lagging behind Singapore which ranked 23, Brunei (30), Malaysia (66), Thailand (86), and the Philippines (105).

According to Rizal Malik, Team Leader of the Democratic Governance Unit of UNDP, the reasons behind declining Indonesia HDI ranking is life expectancy in Indonesia relatively low, which is only 70.5%. In addition, maternal mortality rate after birth in Indonesia is the highest in Asia, which is 420 per 100,000 births. Infant mortality rate in Indonesia is still the highest in ASEAN.

While the literacy side, Indonesia''s record is pretty, with the numbers 92% of the total population over the age of 15 years. "Improving HDI measurement, especially in health indicators and disparities quality of education,  are the main challenge for the cabinet now," said Rizal to Rukmi Hapsari from Gatra.

Rizal emphasized, equality of economic growth is essential to ensure community income. Despite increased economic growth since 2006, the income gap between the rich and the poor even higher. BPS data mentioned, the number Gini coefficient (inequality) rose from 0.32% in 2005 to 0.37% in 2007.

Understandably, the Indonesian economy is still concentrated in Java. Economic sectors are designed in an integrated economic region outside Java was not so alive. For the production of primary goods from eastern Indonesia still sucked into the area of Java and Sumatra for development.

As for poverty alleviation, Imam B. Prasodjo, a sociologist from the University of Indonesia, said that the government should stop the BLT. Because, in reality, BLT money is not used to buy basic needs, even used to buy cigarettes, mobile phone, and gambling. Based on data from SUSENAS 2006, more than 12 million poor families use the BLT funds to buy cigarettes.

For this reason, Imam proposed replacement of BLT with basic food coupons that can be exchanged at the store or the local traditional market. It could also providing free seeds to farmers, boats and nets for fishermen, and capital assistance to traders. "Sure,poverty can not be overcome by direct money," said Imam, as he stated the need for accurate and precise data on aid recipients.

Not only BLT is in need of revision, the implementation of the BOS must be improved. Because in case of fraud committed BOS funds the principal actors. If the BOS is not distorted, its use is often not straightforward because of the lack of management skills of school heads. Therefore, there should be assistance to the schools how to use the BOS for the progress of schools and students. So, good luck Mr. and Mrs. Minister! Indonesian people wait your hard work to fulfill SBY sweet promises.

Astari Yanuarti


Human Development Index Ranking *

HDI Rank Country Score
1 Norway 0.971
23 Singapore 0.944
30 Brunei 0.920
66 Malaysia 0.829
86 Thailand 0.783
105 Philippines 0.751
110 Palestinian 0.737
111 Vietnam  0,735
116 Indonesia 0.734
Laos 0.725
133 Cambodia 0.619
137 Myanmar 0.593
138 Timor 0.586
162 East 0.489 182
Nigeria 0.340

* Source: Human Development Report 2009 United Nations Development Program (UNDP)


Total Population in Poverty in Indonesia *

Year Number Percent
2004 36.1 million 16.6%
2005 35.1 million 16%
2006 39.3 million 17.8%
2007 37.2 million 16.6%
2008 35.0 million 15.4%
2009 32 , 5 million people 14% **

* Source: Central Bureau of Statistics in 2009
** Projected Medium-Term Development Plan is 8.2%, meaning the target is missed 

OPINION BOX

Mohammad Hasan, former Minister of Industry and Trade of the Republic of Indonesia
It's Time to be A Master in Our Country

Dominance of imported food should be eliminated because only a waste of foreign exchange. We can start with reduce freight transport costs between regions. At this time, the cost of shipping one container 20 feet from Surabaya to Jakarta to reach  7.5 millions Rupiah by train. Compare the cost of shipping from Singapore to Jakarta is only US$ 200 ( 2 millions Rupiah).

In addition, there needs to be guidance from the relevant ministries to farmers, especially in the selection and packaging of agricultural products. With the lowest quality goods for local markets, the level above it to the main markets, and the best for export.

To overcome the high prices of fruits and local food, land management need to be updated so that the level of production. Should have no agricultural land was divided to the heirs so that eventually sold for smaller and unprofitable.

The ministers should be brave and defend the local economic actors. For example, although some development projects using foreign aid, management still must be in the hands of Indonesia in order to ensure technology transfer. At this time, local companies such as IKPT been able to work on projects, petrochemical and LNG which are known difficult and high-tech.

Our country should stop just become exporters of raw materials, and should begin to export goods to increase the added value. Ironic, as the third largest cocoa producer in the world, Indonesia has to import instead of chocolate from France, Belgium, and Switzerland. Therefore, there needs to be incentives for the production of finished goods which have a higher investment value and create more jobs.

The basics, we must be masters in our own home. Import raw materials such as soybeans and wheat can be replaced with a fish that is abundant. Therefore, fish should not be exported in the form of intact, but once processed into tofu, tempe, and instant noodles or can be made into meatballs, dragon legs, and nugget.

Whereas for timber and rattan industry, the government must ensure the availability of raw materials. Do not get raw materials from abroad more cheaply. More important, the team was formed to protect exporters and domestic industries.

Our exporters still face tariff barriers and non-tariff. For example, at the time of wood furniture exports to Japan are taxed imports and non-tariff protection in the form of Japan Agricultural Standard. One one level set Formaldehyde content in furniture glue that is safe from the threat of cancer.

I recommend that the Ministry of Industry, Ministry of Trade, and other relevant departments actively negotiating with industry and trade associations who became actors. Negotiations are ideally chaired by the Ministry of Finance so as to accelerate decision-making.


Firmanzah, Dean of the Faculty of Economics University of Indonesia
Regional Entrepreneurial Create Group
 
The challenge of the new cabinet's economic team is the synchronization of policy and implementation across technical departments. Duties and roles of the Coordinating Minister for Economic Affairs to be central. Because not only put the ministers in working meetings. More than that, they need direction and clear economic policy and integrated with each other.

The government must make a series of policies to drive the real sector. Starting with a set road map strengthening the real sector, which together macro and micro perspectives. Then create an investment climate that efficient and effective. Licensing bureaucracy should also be trimmed so no more room for high cost economy.

Then create a group of new entrepreneurs in agriculture, plantations, marine, and livestock in the regions to optimize the potential of the local economy. Need to be cut capital costs by decreasing the interest rate business loans. Also create industry clusters based on comparative advantage.

High economic growth is nothing without distribution. Therefore, the acceleration of distribution of development of national infrastructure that Indonesia is connected by sea, air, and land is a necessity. Necessary investment incentive policies to prospective investors in the areas outside Java and intensifying partnerships with the state-owned regional SMEs.

To overcome the entanglement of foreign debt, the government can extent and intensify tax revenues and state contributions. In addition, the government must maintain the budget deficit at a safe level so as not to burden the government debt burden.

Restructuring and strengthening of national industries should be made to produce products and services of international quality. Equipped with the preparation of superior products for domestic and export markets. National competitiveness will increase with increasing access to education and skills of human resources, the creation of the business climate, and healthy competition.


Faisal H. Basri, Economic Analyst
Five Strategies Equity Acceleration
 
There are five strategic goals that need to be proclaimed by the government to accelerate equitable economic growth and equitable. First, a solid economic structure is not vulnerable exposed external shocks, independent, and competitive. Second, qualified human resources.

Third, the mobilization of all potential sources of domestic funds to generate financing that is consistent with the investment needs. Fourth, the utilization of natural resources in a synergistic and sustainable. Fifth, the bureaucracy is competent, effective, and clean.

High economic growth and sustainable can be achieved when the economy is supported by a solid foundation and back boned by growth in agriculture and manufacturing. Two of these sectors directly determining the national productivity and feed more people.

Growth in other sectors, such as financial services, ought to be able to increase the supply of investment funds to productive sectors. In order to play optimally, the financial sector must be healthy and efficient. So they can avoid the placement of speculative funds and bring investor confidence in the long run.

Indeed foreign real investment in Indonesia is still very small compared with other countries. Because the concentration of foreign ownership on the bourses. Foreign domination in the market makes the inflow of funds from financial investments (stocks and bonds) is easy to fly. 

*translated from original article: Menanti Janji Manis SBY, published in Majalah GATRA



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