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)