Basic-needs approach<\/p>\n
There were few new policies revealed during the two separate
\nquestion-and-answer sessions held with presidential candidates
\nMegawati Soekarnoputri and Susilo Bambang Yudhoyono and a panel
\nof four economists on Wednesday evening.<\/p>\n
The quality of these forums was nevertheless improved as both
\ncandidates took a basic-needs approach to the complex economic
\nproblems the country faces, and the thought processes evident at
\nthe meeting were down to earth. They aptly demonstrated a broad
\ncomprehension of the basic economic issues and the enormous
\nchallenges immediately confronting the incoming government.<\/p>\n
Both candidates gave much attention to the problem of
\nunemployment, one of the main causes of poverty in the country,
\ncandidly describing how jobs could generate wages, which in turn
\nwould create purchasing power to fuel demand for goods and
\nservices. This virtuous circle in turn would produce tax revenues
\nfor the state to fund public services and maintain and build
\ninfrastructure.<\/p>\n
Jobs are indeed what are badly needed by the estimated 10
\nmillion unemployed and more than 30 million under-employed
\npeople. Jobs are also the most important thing the 38 million
\npeople currently living in absolute poverty need to escape their
\ndeprivation. The experiences of countries that have succeeded in
\nreducing poverty show the majority of people who escape from
\npoverty do so by taking up new employment.<\/p>\n
Both presidential aspirants demonstrated they realized
\neconomic growth was the key to generating jobs and reducing
\npoverty, and that the economy would never expand without
\ninvestment. But the economic plan the candidates promoted during
\nthe forums also showed their awareness of the severe restrictions
\nthe state budget would face during the next five years due to the
\nhuge domestic and foreign debt burdens and the ballooning cost of
\nfuel subsidies. Hence, they looked to the private sector to be
\nthe main locomotive of growth.<\/p>\n
The candidates reiterated the vital need to reinvigorate
\ndomestic and foreign investment through the improvement of
\ngovernance, regulatory and legal frameworks, basic infrastructure
\nand labor regulations. They rightly concluded it is a vibrant
\nprivate, not public, sector that creates most jobs.<\/p>\n
But private investors are only willing to infuse capital if
\nthe investment atmosphere allows for a reasonable calculation of
\nbusiness risks and if the competitiveness of the economy improves
\nsignificantly. But now, due to structural problems and poor basic
\ninfrastructure, our economy is far more inefficient than our
\nneighboring countries. Consequently, the capital costs of
\nbusiness ventures in Indonesia are much higher, and manufacturing
\ncompanies have to bear higher inventory costs due to uncertainty
\nin port-handling and an inefficient and corrupt customs service.<\/p>\n
Both candidates promised, if necessary, to bite the bullet by
\nadjusting up domestic fuel prices closer to international levels
\nbut they pledged to protect the poor from the brunt of these
\nincreases by providing targeted subsidies on kerosene for
\nhousehold use, the fuel most-widely used by low-income people.<\/p>\n
The candidates are fully aware the huge fiscal burdens
\nresulting from the government's decision to maintain domestic
\nfuel price subsidies despite the rise in international oil prices
\nsince late May could become a political landmine for the next
\ngovernment.<\/p>\n
Similar to the Aug. 2 meeting between both candidates and
\nnational and foreign business leaders at the Jakarta Convention
\nHall, Tuesday's forums were not aimed at the common people, who
\nmake up the majority of voters.<\/p>\n
It is yet comforting to note the significant improvement of
\nMegawati's communication skills, although Susilo in comparison
\nremained much more eloquent and articulate in elaborating his
\npoints. This doesn't mean, however, that Susilo's economic plan
\nis better than Megawati's. In fact, Susilo's platform is similar
\nto most of the programs currently implemented by the Megawati
\nadministration. The encouraging development though is the keener
\nattention paid by both candidates to the importance of good
\ncommunication.<\/p>\n
Whoever takes over the government next month needs to be a
\ngreat communicator and deal-maker; so as to develop a political
\nconsensus at the House of Representatives, and reach out to the
\npeople to build public support for their program. The next
\npresident should also possess a great sense of patience in
\ndealing with differences of opinion in the House and in the
\nnation as a whole, especially when addressing critics.<\/p>\n
Put another way, although the new president needs to show
\nstronger leadership and be more decisive in policy making, he or
\nshe should also be highly capable of selling economic reforms,
\nmany of which will be painful. This requires well-developed
\ncommunication skills and an effective communication machine.<\/p>\n
______<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/basic-needs-approach-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }