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

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)