Global trends affect income share

Global trends affect income share

JAKARTA (JP): The problem of income distribution in a country is bound to emerge as the country struggles to adjust itself to global trends, an academician says.

Prof. Iwan Jaya Azis said in a scientific oration at the University of Indonesia yesterday that the problem of income distribution arises sooner or later as a country prepares to conform to global changes.

Iwan cited adjustments to global changes as learning to rely more on the strength of the market and private sector, reducing protectionist measures and subsidies, attracting foreign investment and boosting exports.

Azis, 43, who is currently a visiting professor at the Cornell University in U.S., gave his oration, titled The gap between macro economics and micro trends: a shortcoming of economic science?, in a ceremony during which he was installed as a professor.

"This is not a simple problem and it is not within the demarcation of economics," Azis said in the ceremony which was attended by, among others, economists Prof. Ali Wardhana, Prof. Sadli, Prof. Widjojo Nitisastro, Prof. Satrio B. Joedono, Prof. Emil Salim, Prof. Subroto as well as Minister of National Development Planning Ginandjar Kartasasmita and Minister of Environment Sarwono Kusumaatmadja.

Iwan said he hoped the issue of income distribution would receive more attention and be addressed by a solid framework which can recommend all the positive aspects to be achieved through liberal trade.

"This trend, I believe, is inevitable in the future, and hopefully everyone in every country can benefit from its positive aspects," he said.

Iwan said this problem must be solved by analyzing economic interactions at the macro and micro levels occurring among the components, among the variables and among social groups within the countries.

He noted that there were links between population growths, poverty and environmental degradation, which happened most often in developing countries.

Generally, Iwan said, a high, uncontrollable population growth will burden the global environment. But if such a situation was put on a local context, more complex linkages would arise and the poverty variable would appear.

He reckoned that it was possible to explain the relation between micro trends and macro economic developments, although it was difficult.

"I hope economists and social scientists, especially those dealing with international trade, can give more attention to this. The economic and political aspects of the global trend -- both which are positive and unfavorable -- need to be addressed, especially in developing countries," he said. (pwn)