RI economic prediction a serious matter<\/p>\n
By Makmur Keliat<\/p>\n
NEW DELHI (JP): Beyond any doubt, prediction is of great
\nimportance to human beings, especially when it encourages people
\nto keep with their ambitions. Henceforth there is nothing wrong
\nwith the recent prediction that Indonesia will become the world's
\nfifth largest economy by 2020.<\/p>\n
It should be realized, however, that prediction does not
\nassure accomplishment. First of all, it is necessary to bear in
\nmind that predictions are neither neutral nor objective. The way
\none sees and projects his future is largely shaped and determined
\nby his social and economic predispositions.<\/p>\n
For instance, two men with different educational and economic
\nbackgrounds will have different visions of their future. One who
\nhas come from a well-off family and obtained a good education
\nwill have more self-confidence to face his future than the other
\nwho is less fortunate. Thus prediction is always a biased
\nassessment and made with certain predispositions.<\/p>\n
In most cases, projections of a country's economic performance
\nare generally drawn through a simplification process. It has been
\nlong argued that economic prediction has a strong inclination to
\nneglect and put aside social and political factors. Forecasts
\nbased on figures and statistics usually entail a caveat \"of
\neverything being equal\".<\/p>\n
Inevitably, there are inadequacies and one could say that
\nunpredictability, as well as predictability, is an inevitable
\npart of economics. Because of such shortcomings, a new tool of
\nanalysis, based on political and economic studies, combining
\neconomic indicators with social and political factors has gained
\ncurrency among scholars.<\/p>\n
To strengthen this point, we can learn several invaluable
\nlessons from Latin American and Indian experiences. In the early
\n1960's, many economists had projected that countries in Latin and
\nCentral America would be the most dynamic among developing
\ncountries. However, as the course of events revealed, the real
\nsituation in 1980's went in a totally different direction. Most
\nof them became defaulters in the 1980's and fell into debt-trap
\nsituations.<\/p>\n
Economists and politicians within and outside India had aired
\nthe same high optimism in the 1950's. By virtue of its strong
\ncommitment to build heavy and basic industry, and considering the
\nhuge number of engineers, they predicted that India would be the
\nfirst among developing countries to compete on equal terms with
\ndeveloped countries.<\/p>\n
This prediction has not become reality as hitherto India is
\nstill moving nowhere. India's GNP per capita then was almost as
\nbig as South Korea's, yet no one had predicted that the South
\nKorean economy would be like it is at the present.<\/p>\n
Hence, it is wise not to keep our heads too high, despite the
\nbright prediction about Indonesian economy. What we need, as a
\nJavanese proverb prudently advises us, is an attitude of humility
\n(ojo dumeh), together with vigilance and avoidance of feeling too
\nproud of our economic predictions (eling lan waspada).<\/p>\n
We should be fully aware of the gloomy sides of Indonesian
\neconomic development. Irrespective of our impressive economic
\ngrowth for the last 25 years, it is still an inconvenient
\nreality, if not an eyesore, --as government has also
\nadmitted--that million people are still living beneath the
\npoverty line.<\/p>\n
Capital is still too concentrated and circulated in Jakarta
\nand other big cities will likely question the essence of
\nrelations between the center and the provinces in years to come.<\/p>\n
Demands for democratization and respect for human rights will
\ncontinue to grow due to the increasing number of middle class and
\ncould become a thorny problem for Indonesia with respect to the
\nrigidity of our political system.<\/p>\n
In a very real sense, Indonesia has not passed the litmus test
\nof economic development enduring alongside a democratic political
\nsystem. How we will sort out the problem is of great importance
\nto sustain our economic development.<\/p>\n
The writer is a Ph.D candidate at the School of International
\nStudies, Jawaharlal Nehru University, India.<\/p>",
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