Adi Sasono's people's economy a political platform: Analyst

JAKARTA (JP): The people's economy concept launched by Minister of Cooperatives and Small Enterprises Adi Sasono is only a political platform of President B.J. Habibie's administration, according to an analyst.

Economist Sri Mulyani said here on Wednesday that the current administration had smartly launched the people's economy concept in order to gain support from the majority of Indonesians who make their living in the agricultural and informal sectors, and was a ploy to win the June general election.

She said people making a living in the agricultural and informal sectors accounted for 95 percent of voters.

"With his people's economy concept, Adi Sasono is seeking to catch the public who think more about their stomachs than their heads," Mulyani said in a discussion organized by the newly- formed Justice and Unity Party.

The discussion, which was moderated by the party's chairman Anton Supit, also featured speakers like economist Rizal Ramli and former student activist Heri Akhmadi.

"Adi is very smart to choose this political platform amid the current situation," Mulyani said.

Mulyani acknowledged there was an unfair distribution of wealth among the people in the country, citing data indicating 65 percent of the country's gross domestic product is controlled by capital owners, 20 percent by the owners of production factors, including land and property, and the remaining 15 percent by workers.

In developed countries like the United States and Japan, workers enjoyed between 60 percent and 70 percent of the gross domestic product.

However, Mulyani maintained that the people's economy concept of the government was theoretically unviable.

"As an economist, I will say the people's economy as visualized by the current administration is nonsense," she said.

She believed the huge funds disbursed by the government to help people in the informal sector would hamper the country's economic growth, given the low productivity of the sector.

"No country in the world can have sustainable economic growth with the majority of the population working in the informal sector," Mulyani warned.

She said if the government would like to help the poor it should launch education and health programs and provide jobs which could increase their productivity in the medium- and long terms.

"Not by distributing credits as currently effected by the government," Mulyani said.

Adi has repeatedly denied that the people's economy was a political stratagem to win the public's vote in the election.

He said he launched the program out of concern at the unfair distribution of wealth in the country.

The government has promised to allocate Rp 10.8 trillion (about US$1.2 billion) in heavily subsidized loans for small businesses and cooperatives.

Analysts fear that under the people's economy policy, the government would force redistribution of the assets of troubled large companies and banks to small businesses.

The program was also criticized as racist, as most large businesses are controlled by Indonesians of Chinese origin.

The foreign media has dubbed Adi the most dangerous man in Indonesia.

Despite the controversies, the people's economy concept has gained endorsement from the International Monetary Fund.

IMF's Asia-Pacific director Hubert Neiss, after a discussion with President B.J. Habibie last week, said that policies under the aegis of the people's economy concept would be included in the next letter of intent on the economic reform agenda between the Indonesian government and the IMF due to be signed mid-March. (jsk)