YOGYAKARTA - Chairman of Committee on National Economy (KEN), Chairul Tanjung, said that the economic growth and earnings of Indonesia's gross domestic product over the last five years has increased very significantly. However, a fairly rapid growth has not been balanced by equal distribution of income for disadvantaged people. Therefore, the government will provide the opportunity for local entrepreneurs to take a greater part in national economic development in the future.
According to Chairul Tanjung, there is a change in the mindset of government in economic policy making, namely by submitting entirely to the market and providing the widest opportunity to local players. "The government is now changing the mindset to no longer regulate the economy much, but leaves it entirely to the market. It was different in the New Order era, all set by the government," Chairul said in Expert Discussion 'Promoting Populist Economy: The Real Economy of Indonesia Today and Its Preparation to the Future', held at UC UGM.
To show the inequality in economic development, Chairul Tanjung said although 41.2% of Indonesian society work in the agricultural sector, the contribution of GDP of this sector is only 13.6%. It creates economic inequality and poverty among farmers.
The most important thing done by the government is utilizing foreign exchange reserves of nearly US$150 billion for infrastructure development and giving local players the opportunity to host in their own country. The reason is the state budget fund is more absorbed to pay staff’ salaries and loan interest rates. "Only 10 percent is used for development activities. The government cannot work alone soit needs to invite private sector," he said.
For equal distribution of income to the disadvantaged community, the government will carry out procurement of affordable housing programs for the people, cheap transportation vehicles, cheap water and electricity facilities and welfare improvement of fishing and urban poor communities in 2012.
In the discussion which was hosted by Dean of Faculty of Social and Political Sciences, Prof. Dr. Pratikno, M.Soc.Sc., Chairul Tanjung said that Indonesia now succeeds to control 40 percent of economic activities in Southeast Asian region and improve GDP revenues to become the second largest after Russia. He said that some time ago he was sent by President SBY to study the economic system in China. He met many experts in China. From there, he knew that China which follows socialist and communist, actually implements economic liberalization policy.
Economic success achieved by China cannot be separated from the role of President Deng Xiaoping who in 1988 opened the taps of foreign investment into China and changed the mindset of government by giving local entrepreneurs the flexibility to move the economic sector. "A year after opening the investment policy of foreign investment, 90 thousand private companies grew. Then in 2001, the number of employers had reached two million people," he said.
Learning from the experience of China's economic policy, Chairul concluded that it is not important at this time to dichotomized socialist, capitalist or social economy. The most important is the economic system implemented is able to provide welfare for people. "For me, whether capitalist or socialist economic system, if it can improve people’s welfare, then it is called populist economy," he concluded.