Tantangan IMF, Berubah atau Punah

Kompas (original link)

Kamis, 7 Mei 2009 | 02:57 WIB

Oleh Berly Martawardaya

Pada September 2007, Managing Director IMF Dominique Strauss-Kahn menyatakan, IMF mengalami krisis identitas.

Para klien utama IMF, yaitu Argentina, Brasil, Indonesia, dan Turki telah melunasi utangnya. Pinjaman IMF ke negara berkembang yang merupakan sumber pendapatan utama lembaga turun drastis 91 persen sehingga perlu dilakukan penghematan biaya operasi 100 juta dollar AS. Pasar modal global lebih dilirik negara berkembang karena bebas dari berbagai persyaratan berat IMF.

Krisis finansial global pada akhir 2008 mengembalikan relevansi IMF seiring dengan mengeringnya sumber modal swasta. Pertemuan G-20 di London menaikkan dana IMF tiga kali menjadi 750 miliar dollar AS dengan 6 miliar dollar AS dialokasikan untuk negara miskin.

IMF juga diberi mandat untuk memberikan early warning terhadap risiko krisis finansial dan makroekonomi, juga mengeluarkan rekomendasi kebijakan untuk menghindarinya.

Pertemuan pimpinan IMF, Bank Dunia, dan para menteri keuangan yang berlangsung 24-26 April lalu adalah kesempatan untuk melakukan introspeksi dan redefinisi peran.

Berubah dan belajar

Salah satu indikator utama berubahnya IMF adalah apakah terjadi revisi kebijakan. Ketika Mahathir Mohamad menerapkan kebijakan capital control di Malaysia, sejumlah kecaman dan prediksi negatif diluncurkan IMF. Capital control berperan besar menjaga stabilitas dan pertumbuhan ekonomi Malaysia.

Menghadapi krisis finansial di Eslandia pada September 2008, salah satu komponen inti program stabilisasi rancangan IMF adalah capital control.

Resep standar IMF adalah Structural Adjustment Programs (SAP) yang menaikkan suku bunga, menurunkan inflasi, dan menekan defisit demi menarik dana internasional. Suku bunga di Indonesia tahun 1998 sempat melebihi 50 persen yang melemahkan sistem perbankan tanpa capital inflow yang signifikan.

Pengurangan defisit acap kali dilakukan dengan memotong anggaran pendidikan, kesehatan, dan berbagai subsidi pertanian. Tak heran pergolakan sosial dan kejatuhan pemerintah kerap mengikuti penerapan program IMF.

Stiglitz, peraih Nobel Ekonomi dan mantan Chief Economist Bank Dunia, menyatakan dalam Globalization and Its Discontent bahwa IMF lebih mengutamakan selamatnya pinjaman swasta daripada kondisi rakyat miskin.

Kebijakan negara maju pada masa krisis adalah kebalikan dari program SAP. Suku bunga diturunkan, bahkan sampai mendekati nol, dan stimulus ekonomi menyebabkan defisit melonjak drastis. Tidak ada negara maju yang memotong subsidi kesehatan, pendidikan, dan jaminan sosial mereka.

IMF telah mengeluarkan program baru bernama Flexible Credit Line (FCL), pinjaman dan bantuan likuiditas tanpa persyaratan ala SAP. Bahkan, pinjaman itu boleh tidak dicairkan sehingga kredibilitas dan kepercayaan internasional bisa diperoleh dengan biaya minimal. Meksiko adalah peminjam pertama FCL sebesar 47 miliar dollar AS.

Ingin menjadi fosil?

Masalah besar IMF adalah tidak berimbangnya hak suara anggota. Pembagian dilakukan berdasarkan proporsi kekuatan ekonomi pasca-Perang Dunia II. Brasil dengan total GDP sekarang empat kali lipat Belgia justru memiliki hak suara lebih kecil. China memiliki hak suara yang sama dengan Kanada, padahal ekonominya enam kali lebih besar.

Total suara negara G-7 ditambah Belgia, Belanda, dan Swiss melebihi 60 persen sehingga tidak akan ada keputusan yang merugikan negara maju. Tak heran negara berkembang enggan percaya dan memperkuat IMF.

IMF juga belum sepenuhnya tobat. Pinjaman yang baru diberikan IMF ke Latvia dan Ukraina masih mensyaratkan pemangkasan defisit gaya paradigma lama. Pada sisi lain, IMF tidak memberikan sanksi apa pun terhadap Amerika Serikat yang menjadi penyebab krisis global dan defisitnya menembus 10 persen GDP.

Perlu tameng

Negara berkembang tetap memerlukan tameng menghadapi krisis dan spekulan. Idealnya ada global lender of last resort yang bisa memberi likuiditas cepat dengan prinsip tanpa batas (freely), sementara (temporary), dan berbiaya premium (with penalty).

Ketiadaan lembaga itu mendorong ASEAN beserta Jepang, Korea Selatan, dan China (ASEAN+3) membentuk Chiang Mai Inisiatif (CMI) dengan total dana 120 miliar dollar AS. Perjanjian bilateral swap agreement telah ditandatangani negara ASEAN+3 untuk memperkuat ketahanan ekonomi.

Asia telah memiliki solusi tersendiri terhadap permasalahan bersama, tinggal masalah waktu sampai wilayah lain menyusul. IMF perlu berubah secara mendasar atau bersiap menjadi fosil sejarah.

Dosen FE-UI; Aktivis NU Profesional Circle

The fall of old wisdoms and the rise of ‘Chindonesia’

The Jakarta Post (original link)

Berly Martawardaya , JAKARTA | Sun, 04/26/2009 11:48 AM | Opinion

Truth may be the first casualty of war, but truth can also emerge after a crisis. And in this context, let us talk about “Chindonesia”, a shorthand for China, India and Indonesia, because these three Asian countries could become the backbone of Asia’s economic revival.

Companies have relocated to Chindonesia for obvious reasons; not because we produce high-tech products with sophisticated methods but mainly because we do things cheaper.

The banking and financial sectors are less developed in Chindonesia. There is not too much financial engineering and sophisticated instruments. India and China also still maintain a degree of capital control that shields them from financial volatility. All three countries have based their economies on the real sector. Agriculture and mining in Indonesia, manufacturing goods in China and IT services in India are the backbones of these economies.

Let us use the downturn of foreign companies to build our own industrial capacity and human capital while cutting the red tape. Chindonesia could not have achieved what it has today without the significant expansion of education, R&D and entrepreneurship. Thus we could emerge from the crisis stronger and more prepared than ever.

The global financial crisis has brought down not only old economic institutions but also the old economic mindset. What used to be conventional wisdoms in economic growth have been exposed to have only weak foundations and be ill- suited to explain current circumstances.

The global economy will have negative growth and contract by one half to 1 percent in 2009, before staging a modest recovery in 2010. OECD countries will suffer significantly with minus 2-3 percent growth, Japan being the hardest hit.

But three major economies have escaped this predicament and are predicting positive growth. While 9 percent growth has been the norm for China over the past decade, achieving 6.5-7 percent in 2009 will not be that bad. India also shines with 4-5 percent projected growth.

Overall, developing economic growth projections without China and India is near zero percent. The third is Indonesia, predicting around 3.5 percent expansion in 2009.

On the other hand, our neighbors in the Association of Southeast Asian Nations (ASEAN) are not doing so well. Malaysia, Singapore and Thailand are all predicting negative growth in 2009. The Ministry of Trade and Industry (MTI) of Singapore has revealed that Singapore’s economy contracted by 19.7 percent for the January to March period.

Malaysian exports have declined for five months in a row, but the decline in February 2009 (-15.9 percent) has narrowed from -27.8 percent in January 2009. For Thailand, let’s just say that they are doing better than we did after financial crisis last decade. The mix between political and economic crises has proven to be very a combustible potion and not conducive to growth.

What lessons can we draw from this?

First, the crisis has exposed the vulnerability export-based economies. The virtue of export promotion as a development strategy has been extolled over import substitution. Carving out a market niche in the global market was seen as the surefire recipe to prosperity. But the sword cuts both ways.

As the global demand subsided, the down swing was particularly felt by countries with a high degree of exposure and income from exports. Thailand suffered an extra mile with the loss of tourists, once a major source of income, as they were scared off by political confrontations.

Second, the low side of high-tech exports. Not all exports are equal. The high-tech sector, with a high degree of value added, used to be where countries were aiming to be. Cars, cell phones, computers and microchip technology with other electronic products are the 4Cs said to bring in foreign currency.

But the high-tech products are also the first consumers cut down on in an economic downturn. It may be a less merry and glitzy life, but they realize that that they could live without these things.

Japan, the world’s second-largest economy, posted their sharpest-ever decline in February – down by 49.4 percent – as global demand for Japanese cars and electronics evaporated.

Lastly, finance is no longer king. New York, London, Singapore and Hong Kong used to be the center of the robust financial world. Exotic financial instruments have brought untold wealth to industry leaders.

While there has been no systematic effort to reduce exports, the exports in all three countries’ economies range around one third of the GDP, leaving domestic consumption, investment and government expenditure strong enough to cushion the shock of the crisis and provide a decent rate of growth. Large populations are a plus in this case.

In 2006 PricewaterhouseCoopers (PWC) coined the term the “Emerging Seven” (E-7), namely China, India, Brazil, Russia, Indonesia, Mexico and Turkey – that its says will replace the G-7 (the United States, Japan, Germany, UK, France, Italy and Canada) as the global economic powerhouse and will be around 50 percent larger than the G-7 by 2050.

Looking at how things turning out, this may be a realistic projection.

The writer is a lecturer at FEUI and PhD candidate in Economics at the University of Siena-Italy
and a member of the NU Professional Circle.

A district-based system: More efficient, accountable

The Jakarta Post (original link)

Berly Martawardaya , JAKARTA | Wed, 04/15/2009 10:20 AM | Opinion

The legislative elections passed relatively peacefully, so now what?

We could all sit down and argue hypothetically about the exquisite courting dance between political parties forming coalitions for the upcoming presidential race.

But ultimately, the reality will be more heart wrenching than Dancing with the Stars or Indonesian Idol.

We should definitely investigate irregularities in registrations and election conduct, impose stiff penalties for offenders, and reschedule elections where necessary.

We need election results to be legitimate and final. Don’t let Indonesia’s political system inch any closer toward Thailand, where the legitimacy of the election system is undermined and those elected face massive street protests.

Or we could ponder the major problems in our current system, and start preparing solutions. Arguably, political parties and election candidates were not well prepared when the Constitutional Court (MK) announced its decision to make the legislative elections candidate-centered instead of party-centered.

Campaign advertising was not geared toward coherent and compelling personal stories of candidates, but remained heavy with party symbols and figures and messages.

Even when candidates learn to do it right under the prevailing system, and assuming the elected legislature and incoming government do not mess with the Constitutional Court ruling, it will still be very costly to get elected as a legislator, either at national or regional level.

Lee Kuan Yew, the longtime successful prime minister of Singapore who still holds sway in government, came out with a simple and powerful law in his memoirs. The higher the cost of being elected to public office, the less clean the government will be.

We can talk all we want about having competent and genuine candidates, but even the competent and pure of heart need money to win.

The current system is very costly and forces candidates to spend massively.

The conundrum is whether to borrow and hope to recoup after winning, or to solicit campaign
contributions from wealthy donors and remain beholden to their interests.

We need to decrease the size of electorates (dapil) so candidates can focus their campaigns more effectively and provide more bangs for their bucks.

The current system, a multiple seat constituency, needs to change to single seat constituency – a district system.

Now is a rare moment where political parties’ needs coincide with public interest. Election candidates want to reduce their campaign costs and the public wants more accountability.

In district system, a political party only fields one candidate in each district, thus escaping bloody and costly feuds where candidates from the same party fight each other for votes.

The accountability side will also be well served. With only one legislator, the electorate knows who they can hold responsible for policies in parliament and whether to punish or re-elect candidates accordingly.

What about claims that a district system would weaken parties?

Maybe this question should be reframed to “what kind of election system is best for Indonesia?” We adopted the proportional system from the Dutch.

In such a small country, it is safe to assume that regional differences do not really matter, thus whoever becomes a member of parliament within one party has little consequence.

But Indonesia is much larger than the Netherlands, with real regional differences. Our diversity should be a strength instead of being glossed-over and ignored.

Having a Jakarta native with a fancy degree masquerading as a local to get a seat in the national legislature will just not do anymore.

This approach has already done too much damage. Indonesia needs more local people with local wisdom and real knowledge of local problems in the national scene.

Having a system of party primaries could enforce party discipline. No longer could someone be assigned to be candidate in one area just because of proximity – or worse, financial contributions to the party chairman.

That person must prove their mettle in an intra-party election. Thus representing the view of local party members in the corresponding district. Whoever emerges as the winner could then run as the party candidate.

If a party thinks, through surveys or other means, that it is not competitive in one area, it could opt to not run a candidate but support another party’s candidate in that area. A political pact should be made before the election and become the foundation of a permanent alliance in governing.

Thus the people would have a better idea of what is to be expected if the party or alliances of parties go on to win the election.

Indonesia’s complex tapestry of geography, ethnicity, religions and history is likely to have room for more than two national parties.

Malaysia and India have relatively permanent coalitions of parties representing different society groups, either governing or waiting in the wing as loyal oppositions.

There are also some studies that point out that having a combination of direct presidential elections and district legislative elections is the most stable system because party discipline in weaker and possible to form temporary issue and geographical alliances.

A district system would reduce campaign costs, increase accountability and produce a more stable government. What are we waiting for?

The writer is a lecturer at School of Economics, University of Indonesia

G20 summit: A global new deal?

The Jakarta Post (original link)



Berly Martawardaya , JAKARTA | Wed, 04/08/2009 11:07 AM | Opinion

UK Prime Minister, Gordon Brown, called the G20 Summit in London a Global New Deal and solution to the current financial crisis. The twenty participant countries make up 85 percent of global gross national product, 80 percent of world trade and two-thirds of the world population.

The G20 Summit needs to be complemented and praised for the role it has played. It used to be the order of the day that the mainly white rich nations’ club of the G8 decided what was good for the world.

The G20 was inaugurated in 1999 and has had annual meetings since then, but only since the financial crisis unfolded in 2008 has it became a major forum to find global solutions. Enlarging the committee to save the world has increased the sense of global ownership, so we can take together the hard steps that need to be taken.

It is no longer the task of the developing countries to implement the pre-cooked solution prepared by smarter and richer countries. Now we are in it from the start, hammering out solutions together.

The other break with the past is in the character of solutions offered. No country was foolhardy enough to propose raising interest rates, cutting spending or eliminating subsidies for the poor as often previously required by the IMF and imposed on countries in crisis through IMF structural adjustment programs (SAPs).

Instead the summit offered a refreshing break from the previous Washington Consensus with its market fundamentalism. The communiqué of the meeting is filled with references to ease monetary policies and promote fiscal stimulus. The world is truly Keynesian now.
But to be judged successful, the summit needs to have accomplished three things.

First, to do no harm. The Hippocratic principle was executed seamlessly. It’s not as easy as it sounds; there were many contentious issues between US and Europe as well as between West and the Rest. Playing them down also has consequences.

Credible assurances of commitment to free trade and against protectionism were badly needed. Stock markets in Europe rose by one percent on average, while in Asia we had 4-5 percent increases in the Nikkei and Hang Seng indexes.

Second, it needed to agree on policies to minimize the economic downturn, accelerate recovery and support long-term growth. Obama called for fiscal stimulus of at least two percent of each country’s GDP. While Angela Merkel was exceedingly worried about Germany’s history of hyperinflation, inclining her not to accept this proposal, the final language stated that collectively G20 countries agreed to spend US$1.1 trillion dollars to boost the world economy.

The basic principles of Keynesian economics are very simple. Put money in the hands of people that are more likely to spend it the soonest. The more luxurious the goods and services purchased, usually, the lower the impact for the whole economy. The increase in demand will utilize the idle capacity, end the waiting game and get the economy moving again. That’s why the commonly recommended policies are tax-cuts, subsidies and direct cash transfers to the poor. Government have to run deficits as they are the only economic agents taking a long term view and having credibility.

In the global context, stimulus means putting money in the hands of low-income countries. The G20 agreed to spend $100 billion to assist international development banks in lending to poor countries. Additional resources of $6 billion from agreed IMF gold sales will also be made available for lending especially for the poorest countries.

Among the loans that banks freeze in the name of caution after a crisis unfolds are trade credits. Producers from developing countries commonly use trade credit facilities and Letter of Credit (L/Cs) from developed country banks due to lack of domestic financing. With the negative impact of the credit crunch, developing countries then cannot export their products anymore, due to lack of trade finance.

The G20 committed $250billion of support for trade finance over the next two years through export credit and investment agencies, as well as through multilateral development banks. This is a very welcome relief that gets right to the root of the problem.

Third, the summit also needed to strengthen institutional arrangements to prevent that a similar crisis should occur again.

While stopping short of erecting a wall between the consulting, auditing and banking industries on similar lines to those before the repeal of the 1933 Glass-Steagall act in 1999, the summit made very clear pronouncements in the direction of transparency. The shadowy banking world of the hedge fund is about to come into the light of day and to be regulated, while list of countries that protect tax havens will also be announced shortly.

International accounting standards will be set and credit rating agencies will be regulated in order to remove conflicts of interest. A newly established Financial Stability Board (FSB) will supervise and provide early warning systems to enable steps to be taken before a problem grows into a full-scale crisis.

But the IMF still presents a dilemma. Countries need to have sufficient capital to fend off speculative attacks, but association with the IMF was even more politically toxic than exposure to sub-prime mortgage losses for past victims of the 1998 Asian banking crisis. Furthermore, the current composition of voting weight within the IMF is still over-representing the G8 countries.

Thus, the costlier but preferred path is to pool reserves and set up regional agreements to help each other through such unfortunate events. The G8 countries seem oblivious that simply increasing IMF capital will do little to ease these concerns.

The leaders of the G20 put on a great show, let see if they can walk the talk.


The writer is a lecturer at FEUI and PhD candidate in Economics at the University of Siena-Italy and a member of the NU Professional Circle.

Learning our lesson from another dam failure

The Jakarta Post (original link)

Berly Martawardaya , JAKARTA | Wed, 04/01/2009 11:08 AM | Opinion

In the still of the early morning last Friday, gushing water from what was the Situ Gintung dam swept away the community living beneath it. As of this writing, close to 100 people in the Cireundeu area have been found dead and more than another hundred are still missing. Indonesia is grief stricken.

How could this happen? This is the age of the Internet and instant communication. Current technology could alert us to an asteroid approaching Earth from a million kilometers away. But this tragedy occurred in Jakarta, not some faraway, hard to reach area.

Unlike the Aceh tsunami, we cannot blame God for this — only ourselves.

While there has been a movement to reform the legal legacy of the Dutch colonial administration, there has been little attention paid to conserving its physical legacy, except for when potential tourist dollars are at stake.

Realizing the potential and peril of the Pesanggarahan River; in 1932 the Dutch built a dam to hold 2.1 million cubic meters of water in a 23-hectare area. Since then, many trees have been cut down and floods are more frequent; it seems that the Indonesian government has not done much to improve the dam.

We could not help but be saddened by reports that the foundations of the dam were weakened as surrounding communities salvaged building materials. This proved to be a very costly act of vandalism indeed.

Nevertheless, the government is not off the hook, ultimate responsibly for maintenance and preservations of public facilities lies with them. The all too frequent sinking of passenger ships and crumbling of bridges should be seen in same light; insufficient maintenance is to blame.
So what needs to be done?

First, the government needs to allocate funds from the Rp 17 trillion (US$1.5 billion) budget intended for infrastructure repair as part of a recent stimulus package for a comprehensive assessment of the country’s infrastructure. Bridges, dams and ships should be the priority, as they have the greatest potential for casualties.

The assessment of existing facilities, preferably by independent specialists, will not be as exciting and glamorous as establishing new ones is. No public ribbon cutting ceremonies with glitzy media coverage (not to mention, there would be less of a chance to embezzle funds) - just the nuts and bolts of governing for the people.

The rebuilding and rehabilitation of public infrastructure would be a massive, labor-intensive undertaking that would channel money to low-income people. High-income groups would too benefit from the high impact improved infrastructure would have on the national economy. We could also reallocate some Rp 56.3 trillion in tax-cuts of the stimulus to strengthen existing infrastructure.

Second, we need a thorough assessment of buildings located nearby rivers and other natural reserves. Bodies of water need clean areas around them to properly absorb water, and building on these areas can have disastrous consequences.

The harder part will be to assess the impact of legal but environmentally damaging construction. Teams of experts should follow rivers and other flood-prone areas to determine whether the establishment of water reservoirs is necessary. Don’t let the poor suffer to satisfy a few people’s greed.

New measures to transform the few remaining lakes and swamps into urban real estate should be resisted. Mother Nature is hurting and its time we listened to her.

The third measure should be an intensive public education campaign. The people should be made aware that the weakening of public facilities can endanger everyone’s life.

As direct beneficiaries, nearby communities should be fervent protectors. A clear line of reporting needs to be established, so the people know what to do if a crack or splinter in public infrastructure is spotted.

Some form of reward and encouragement for this potentially life saving measure needs to be established. Meanwhile, we need stern punishment for the vandals .

The writer is a lecturer at FEUI and PhD candidate in Economics at the University of Siena-Italy and a member of the NU Professional Circle

Bisakah Indonesia?

Business Week-Indonesia
No 07: 1-8 April 2009


Berly Martawardaya

Nothing to fear but fear it self

Demikian ujar Franklin Delano Roosevelt saat dilantik sebagai Presiden Amerika. Tugasnya tidak ringan, Great Depression telah menelan lebih dari seperlima dari GDP dan melemparkan satu dari tiga pekerja di negara Paman Sam menjadi pengangguran. Fasisme di Eropa dan Komunisme di Rusia memperkuat posisinya sebagai alternatif dari demokrasi.

Setelah menaklukkan rasa takut, FDR menjinakkan depresi ekonomi dengan langkah-langkah kreatif yang bertentangan dengan doktrin kebijakan saat itu. Nazi dan sekutunya pun perlahan dapat digulung di Perang Dunia II sehingga perdamainan dan kemakmuran kembali mewarnai dunia.

Malaysia Boleh!

Negara jiran yang tadinya mengandalkan kelapa sawit dan tambang timah ini ingin menjadi negara industri maju pada 2020. Mahathir Muhammad sebagai Perdana Mentri mendorong rakyatnya untuk bergerak cepat. Melayu harus menjadi sinonim dengan kerja keras dan intelektualitas katanya. Percaya diri bangsa dibangun dengan keringat dan pencapaian nyata.

Pendidikan dijadikan prioritas dan putra bangsa terbaik dikirim untuk belajar ke berbagai negara maju. Dibangunlah infrastruktur tangguh dan administrasi publik yang efisien, perusahaan high-tech seperti Microsoft, Oracle, Intel, datang mengisi Multimedia Super Corridor (MSC) dan ikut mengembangkan entrepreneur lokal.

Yes, we can!

Krisis ekonomi dunia datang lagi. Namun sebagian besar rakyat Amerika justru optimis dengan masa depan. Semua karena seorang Obama dengan ibu dari Kansas dan bapak dari Kenya yang berhasil menjadi orang kulit hitam pertama yang menjadi Presiden Amerika Serikat.

Tapi Obama puas sekedar menjadi simbol perubahan, dia ingin menjadi agent of change. Sebelumnya ditoleransi bahwa rakyat miskin tidak bisa mendapat layanan pendidikan dan kesehatan yang berkualitas. Tidak lagi. Sebelum masa jabatannya berakhir, Amerika akan menjadi negara yang bertanggung jawab terhadap warganya. Kaya atau miskin.

Bisakah Indonesia?

Kita sudah berkali-kali tertinggal kereta. Pada tahun 80-an, Indonesia adalah bagian dari Newly industrialized Country (NIC) bersama Taiwan, Malaysia, Thailand, Filipina dan Cina. Sekarang semuanya telah memiliki pendapatan sekian kali lipat.

Dampak krismon paling parah di Indonesia dengan pertumbuhan minus 13 % pada tahun 1998 dan paling lama pulih dibandingkan Malaysia, Korsel dan Thailand. Perubahan sistem politik juga memakan waktu dan biaya yang cukup besar. Baru sekarang Bill Liddle,
Indonesianis ternama dari Amerika, menyatakan bahwa konsolidasi demokrasi kita sudah selesai.

Goldman Sachs pada tahun 2005 menempatkan Indonesia sebagai salah satu dari Next-11 (N-11) yang merupakan pendorong ekonomi dunia masa depan karena besarnya potensi penduduk dan kapasitas industri. Tidak ketinggalan, PricewaterhouseCoopers pada tahun 2006 memproyeksikan Indonesia bersama Cina, India, Brazil, Rusia, Meksiko and Turki untuk melampaui G-7 (Amerika, Jepang, Jerman, Inggris, Prancis, Itali dan Kanada) pada tahun 2050.

Tapi bukankah Indonesia hanya menempati ranking 58 pada Global Competitiveness Report dan 107 pada Human Development Index? Sulitnya menjalankan usaha di Indonesia tercermin pada nomor urut 129 di survey Bank Dunia. Indonesia bahkan termasuk negara dengan tingkat new business terendah di dunia.

Tapi potensi yang besar dan kondisi yang belum maksimal menunjukkan bahwa the only way is up. Indonesia diproyeksikan tumbuh 3-5 % di 2009. Dalam satu grup bersama beberapa negara seperti Cina dan India yang tidak banyak terpengaruh krisis global karena pasar domestik yang besar.

Layunya gerak perusahaan multinasonal yang bermasalah di negaranya membuka peluang bagi pengusaha lokal untuk merebut kembali pasar lokal. Turunnya rupiah juga membuat ekspor Indonesia lebih kompetitif di dunia. Bebasnya Indonesia dari kekang IMF memungkinkan kita untuk mengalokasikan dana demi perbaiki infrastruktur dan layanan sosial.

Dani Rodrik dari Harvard menggunakan kerangka growth diagnostic untuk menganalisa pertumbuhan ekonomi. Penyingkiran berbagai bottle neck dapat menampilkan potensi yang terpendam dan memberikan boost besar bagi perekonomian

Saatnya bagi Indonesia untuk serius membereskan birokrasi, pendidikan dan kesehatan demi menempati posisi yang sepantasnya.

Mungkin juga kita bisa.


Dosen FEUI dan Kandidat Doktor Ekonomi di University of Siena, Italia

Don't waste the stimulus

The Jakarta Post (original link)

Berly Martawardaya , Jakarta | Sun, 03/22/2009 2:02 PM | Opinion

Never let a serious crisis go to waste, said Barack Obama's chief of staff Rahm Emanuel, as he directed the multi trillion dollar stimulus bill and budget, not only to get America out of the recession, but also to alter its fundamental structure.

Although America is the richest country in the world, it is also the world's largest polluter, whose population has one of the lowest levels of education and access to healthcare in the developed world. Obama and his team are pulling all the levers available to change this. Now, the world can look forward to a greener America, with healthier and more educated citizens.

Charles Krauthammer, a neoconservative and Washington Post columnist, said Obama was planning to remake the American social contract.

What about Indonesia? What would a Rp 73.3 trillion stimulus package do to this country?

It depends. Looking at the way the current stimulus approved by parliament is structured, much less than we think.

During economic downturns, both consumers and producers increase their preference for liquidity. Consumers prefer to hold cash in case things get worse, while producers are reluctant to invest since the near future is bleak.

But the productive capacity is still there. The factories and workers are ready to produce. If only the demand was there.

That's where government comes in, to break John Maynard Keynes' paradox of thrift.

According to Keynes, the government is the only agent during a depression with the long-term vision to jump-start the economy. It can afford to run a deficit in the form of counter cyclical economic policy. When the economy grows again, the surplus is used to pay accumulated debt.

But not all economic stimuli are created equal. Larry Summer, Obama's chief economic advisor, stated that a good stimulus should be timely, targeted and temporary.

To spare the economy from severe V- or U-shaped downturn, the stimulus needs to be implemented almost immediately. As income and spending power are inversely related, the main part of the stimulus needs to be targeted toward low-income earners. Since the downturn is temporary, the remedy also needs to be temporary so as to avoid high inflation in the near future.

In order to convince Republicans, who always insist on tax cuts, to endorse his plan, Obama designed a stimulus package made up of 40 percent tax cuts and the rest in government spending.

Top-notch economists and Nobel Prize winners Paul Krugman and Joseph Stiglitz have previously pointed out that policies based on tax cuts are ineffective, as during a recession, people tend to save a higher proportion of their income. The richer a person is, the higher the savings and vice versa.

As for Indonesia, 76 percent of its stimulus package comes from tax cuts, mostly permanent.

The Rp 56.3 trillion tax-cut is a combination of personal income tax, corporate tax, sales tax as well as import tariff cuts. While import tariff cuts could have a higher effect if properly targeted to support exporting firms, empirical studies have shown that the other types of cuts have a relatively low impact.

Bearing in mind Indonesia's small personal tax base, with only 5 percent of the population, or 12.7 million registered tax payers, most of the tax cuts end up lining the coffers of large corporations.

Yes, it is true that our stimulus contains Rp 17 trillion directed to infrastructure spending. Many parts of Indonesia certainly need better roads and buildings to improve commerce. And yes, the 2009 budget also includes salary increases for state employees, teachers and cash transfers (BLT).

But our stimulus program is more notable for what it lacks, rather than what it contains.

It lacks a coherent vision to remake the Indonesian social contract. It surely does not address our oil dependency and deficient public health system. It's quite puzzling that a government facing a near election is not taking advantage of this opportunity.

This is the worst of times, yet the best of times too.

With multinational firms in retreat, now is the chance to strengthen our domestic companies. While imports are getting more expensive, our products are becoming more competitive to export. Now that dinosaur corporations with old business models are facing extinction, it is time to cut government red tape and support entrepreneurship.

And what about skills training?

The Finance Ministry needs to work with other technical departments to increase the proportion of government spending. A monitoring and evaluation framework, with the participation of civil society, needs to be put firmly in place to ensure the money goes where it should and the impact can be carefully calculated for future programs.

One of the key components of economic recovery that has not been addressed is monetary policy. There is room to lower interest rates more aggressively, due to the deflationary trend in commodity and energy prices.

But the declining effectiveness of the transmission mechanism must be taken seriously. It is useless to have more money in banks if it is not lent, or if it is lent at a punitive rate. If major banks cannot be persuaded to lower their lending rates, Bank Indonesia needs to be creative and find ways to increase the lending rate quickly or directly.

On the international side, Indonesia should join hands with other developing countries in pressuring developed countries to abolish their agricultural subsidies that have been a hindrance to our exports.

Indonesia still has time to revise its stimulus or could end up wasting it.

The writer is a lecturer at FEUI and PhD candidate in Economics at the University of Siena-Italy and a member of the NU Professional Circle