Recognizing the economic gains from Idul Fitri<\/p>\n
Bahtiar Arif
\nCenter for Indonesian Reform
\nLecturer at the University of Pancasila
\nJakarta
\nbahtiararif@yahoo.com<\/p>\n
Idul Fitri, or lebaran, is an annual tradition in Indonesia.
\nNot only do Muslims celebrate it, but non-Muslims also
\nparticipate in the festivities, making it a national holiday. The
\ngovernment has extended the Idul Fitri holiday this year and
\nworkers are entitled to have six days off.<\/p>\n
There are certain traditions that have become associated with
\nlebaran. First, there is the exodus of people returning to their
\nhometowns, usually in rural areas. Second, people usually buy new
\nshirts, clothes and shoes, which will be worn on that day. Third,
\npeople are in a giving mood before the holidays and they give
\nmore money to those less fortunate, especially their relatives.
\nFourth, people prepare special dishes and beverages. Finally,
\nafter holiday celebrations are over, they usually bring
\nsomething, or someone, in terms of relatives or servants, back to
\nthe city with them.<\/p>\n
These rituals may have an impact on the national economy. The
\ngovernment has to prepare infrastructures, such as roads and
\nbridges, provide reliable transportation for those returning
\nhome, and make basic commodities, such as rice, sugar, wheat,
\neggs and butter, readily available. This means that the
\ngovernment has to allocate money for these public expenditures.<\/p>\n
The government and the central bank have to control inflation,
\nwhich usually tends to rise at this time. People withdraw money
\nout of their bank accounts to spend on celebrations. Prices for
\nmost commodities will increase, such as transportation, garments,
\nshoes, sugar, wheat, eggs, butter and so on. If demand surpasses
\nsupply, prices will also increase. On a large scale, it may cause
\na decline in foreign reserves because most of the basic
\ncommodities are imported, while exports are still minuscule.<\/p>\n
Urban and regional governments face the problem of
\nurbanization annually. After the celebrations, people return to
\nthe cities bringing with them their relatives, friends or
\nservants. The government cannot control the influx of newcomers,
\nfueling fears of a rise in crime and a housing shortage.<\/p>\n
The annual national event may prove very costly. However,
\nthere may be advantages for the economy if the government and
\npeople manage the event well. Those following the efforts and
\npolicies may see the potential to gain from the annual national
\nevent.<\/p>\n
First, the government has to make a policy empowering the real
\nsector, in particular, the production of basic needs, such as
\nrice, sugar, milk, eggs, palm oil and textiles. Most of them are
\nimported. This policy may have implications on other policies.
\nFor example, interest rates may fall, and banks should allocate
\ncredit to these industries. In addition, the government may
\nimpose measures on the import of these products.<\/p>\n
Second, although a reliable infrastructure has to be provided
\nby the government, the private sector would be enthusiastic to
\nparticipate, provided that the principles governing transparency
\nand competitiveness are established. Adequate public
\ntransportation should be supplied by the private sector. The
\ngovernment's responsibility is in the regulation that maintains
\nfairness in competition.<\/p>\n
Third, regional governments have to be well-prepared for
\nwelcoming the people returning to their hometowns. They usually
\nbring with them a lot of money to spend at home. This would be
\nuseful in distributing money brought from the big cities to rural
\nareas. The bulk of money is unquestionably centered in large
\ncities, such as Jakarta and Surabaya. Without any cost, the
\ngovernment could take advantage of this distribution of income,
\nbut it depends on the regional governments and their residents to
\nprovide local goods and services for the returnees.<\/p>\n
Fourth, state-owned companies, such as the national railway,
\nthe post office and the national airlines, providing public
\nservices relating to the festivities could see large profits.
\nTickets for trains and planes are totally booked, and even the
\nrespective companies have added additional services. People also
\nbuy stamps to mail their greeting cards. It would be unbelievable
\nif these companies failed to make a profit at this time.<\/p>\n
Idul Fitri may encourage economic growth because of the
\nincrease in consumption and investment. This would give the
\neconomy a much-needed boost, provided that the opportunities are
\nmanaged properly.<\/p>",
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