Economic system brushes aside common people
Economic system brushes aside common people
JAKARTA (JP): The common people will never benefit if the
system of Indonesia's economy continues to favor the influential
and the haves, experts warned yesterday.
Sritua Arief and Loekman Soetrisno of Yogyakarta-based Gadjah
Mada University shared the view that Indonesia needs to
reconsider its attitude towards the economy of the common people.
"As long as collusion between businessmen and government
officials, monopolies and nepotism practices still prevail, any
efforts to help the economically-weak people will never bear
fruit," Loekman said at a seminar held by the Bina Desa
Secretariat, in cooperation with a number of other non-
governmental organizations.
Loekman, who presented a paper on the history of the economy
of the common people, said such practices had never been touched
by the government's deregulatory measures.
He added that the government is still using the same method of
economic development as that used by the colonial government.
"Therefore it is just logic that even though we have been
independent for 50 years, we have not been able to solve the
social, economic and political problems inherited from the
colonial rulers," he said.
Concurring with Loekman, Sritua said the economy of the common
people was brushed aside amid the heavy inflow of foreign
investments and loans to Indonesia. Only those affiliated to the
top bureaucracy could benefit from the inflow of foreign
investments and loans.
Profit repatriation
Sritua noted that a substantial portion of profits in
Indonesia was repatriated by foreign investors. Quoting data from
the International Monetary Fund, he said cumulative net foreign
investment in Indonesia for a period of 1973 to 1990 was US$5.77
billion, while the profits repatriated from the investment during
the same period reached $58.85 billion.
"It means every $1 of foreign investment in Indonesia had
brought $10.19 out of Indonesia within 27 years. The main reason
for this phenomena is that foreign investors could tap funds from
domestic financial resources to finance their investment," Sritua
said.
The condition is worsening as Indonesia's new foreign debts
are used only to repay the principals and interest of its
existing foreign debts, Sritua said.
Referring to the World Bank's 1994 report, Sritua noted that
the government paid a total of $41.4 billion for the principals
and interest of its debts during the 1980-1993 period, while it
obtained $69.4 billion in new debts during the same period.
The value of the government's net transfer of funds abroad was
$7.8 billion for the 1985-1993 period, and it was forecasted that
the government would suffer a net transfer of $19 billion for the
1994-1998 period, Sritua said.
"In the whole processes of economic dialectic relations, the
elite group at the power center has directly or indirectly
supported the interests of the haves and the powerful," he said.
Meanwhile, Abdurrachman Wahid, leader of Indonesia's largest
Moslem organization Nahdlatul Ulama, who acted as one of the
discussants, noted that the government lacked political will to
develop the economy of the common people.
Citing an example, he said that cooperatives could not grow
well because of the tight control from the bureaucracy.
"What cooperatives need is the freedom to move. But now, if
they want to elect a new chairperson, they have to go to the
district head," he said.
Abdurrachman said he was sure that cooperatives would be able
to develop, find credits, improve managerial skills and expand
market networks by themselves providing they were given the
opportunity to do so.
"The state will have a healthy and strong economy if the
economy of the people is good. Otherwise, we will be strong only
in the franchise business and it is the foreigners who will enjoy
all of the benefits," he said. (sim/rid)