Govt role needed in economic deregulation
Govt role needed in economic deregulation
JAKARTA (JP): The process of economic liberalization in
developing countries needs their governments' roles through
economic planning to ensure that it will run well, without
instigating destabilization, economist Dorodjatun Kuntjoro-Jakti
says.
"The functions of governments' economic planning are not only
for regulation and nationalization processes, but also for
deregulation and privatization advances," Dorodjatun said at a
ceremony for his promotion as a new professor in the School of
Economics of the University of Indonesia on Saturday.
Dorodjatun said that in the current era of globalization, the
role of governments through economic planning remains a strategic
element of economic development processes.
He presented five arguments on the importance of governments'
touch on economic development planning. He described the five
reasons as follows.
* Development is not an instantaneous and/or automatic
process. It needs stimulators and a long time to experience
changes in different stages. Governments' roles through their
economic policies are needed to maintain the continuity and
consistency of development process.
* Development goes on not without funds and side effects. In
terms of dislocation of funds, particularly when it creates
negative impacts such as unemployment, governments have to
hastily intervene to avoid instability, which can disrupt the
continuity of the development.
* Knowledge about development has been largely accumulated,
which results in the emergence of a common view in the process of
economic development. With such accumulated knowledge,
governments could identify any deviation of the economic
development at the very early stage, and thus they can correct
the deviation quickly.
* The modern economy, especially in the era of information, is
full of data, information and sciences. The governments, with
their large bureaucratic networks, can provide all of them. The
macro-economic policy, therefore, will remain a specialty of
governments.
* Globalization brings about many quantum leaps, which will,
sooner or later, result in discontinuities. To anticipate all
uncertainties, governments should reduce the risks for the sake
of the continuity of economic activities.
Success
However, Dorodjatun noted that the success requirements of the
liberalization process are difficult to meet, especially by
developing countries.
Success conditions include professional government officials,
governments' strong political supports for economic
liberalization, national consensus on ways to liberalize the
economy and the availability of accurate data and information to
support the liberalization process.
"Looking at the four success requirements, it can be predicted
that many developing countries will not be able to counter the
incessant globalization onslaughts," Dorodjatun said.
He noted that the Indonesian government's role in the
country's economic planning is vital, to ensure that economic
liberalization will not lead to a laissez faire, or an etatism,
or a free fight liberalism. (rid)