Learning the Pancasila Economy from a Fish Pond

Some time ago, I stopped at the Islamic Center complex in Tulang Bawang Barat, Lampung Province. The mosque stands with distinctive architecture, surrounded by a large pond filled with fish of various sizes. After praying, I paused at the edge of the pond, which directly borders the mosque floor, and threw food to the fish.

Initially, there was nothing special. When I threw the food with considerable force, the large fish moved quickly, dominating the deeper part of the pond and snatching almost every morsel that fell nearby. The small fish lost out in speed, strength, and reach.

However, I then noticed something interesting. On the part of the pond bordering the mosque building, there was a kind of concrete ledge that made the water shallower. When food was thrown into that section, only the small fish could approach. The large fish were held back by the water depth, which was inadequate for their bodies.

In the deep area, the large fish still got food. But in the shallow part, the small fish had room to live and an opportunity to grow. It immediately crossed my mind: perhaps this is a simple illustration of the Pancasila Economy.

The Pancasila Economy is not an effort to prevent large fish from growing. Nor is it a desire to make all fish uniformly the same size. The Pancasila Economy is an endeavour to create space so that small fish are not always consumed by competition before they have a chance to grow.

The importance of the word “disusun” (deliberately structured)

This idea was, in fact, laid out very clearly by the nation’s founders. Article 33, Paragraph (1) of the 1945 Constitution states, “The economy shall be structured as a common endeavour based upon the principle of familyhood.”

The word used is “disusun” (deliberately structured), not “tersusun” (self-arranged). This difference of one prefix carries significant consequences. “Tersusun” can mean formed by itself through a natural process. Conversely, “disusun” indicates a conscious action, institutional design, and state responsibility. The economy is not left entirely to follow whoever is the strongest, fastest, and most capitalised.

Thus, the state is not merely a night-watchman that allows all economic actors to move in the same space. The state is responsible for structuring the economic space so that differences in strength do not end in domination by those who are already large.

Like the concrete ledge at the edge of the pond, policies on taxation, financing, licensing, government procurement, resource control, and digital market regulation must be designed to provide growing room for small economic actors.

Article 33, Paragraph (4) of the 1945 Constitution further clarifies this direction. The national economy must be organised based on economic democracy with the principles of togetherness and “efficiency with justice”. The last two words are important to underline. The Constitution does not reject efficiency, but it rejects efficiency that ignores justice.

Therefore, the Pancasila Economy need not be rigidly contested between growth and equity, or between the state and the market. The market is still needed to produce innovation, efficiency, and business dynamism. However, the market requires moral and institutional guardrails so that one person’s economic freedom does not close off another person’s opportunity to live.

As was once formulated very clearly in the Elucidation of Article 33 of the 1945 Constitution before the amendment: “It is the prosperity of society that is prioritised, not the prosperity of individuals.” Although the Elucidation is no longer a separate part of the Constitution’s structure after the amendment, its spirit remains reflected in Article 33, particularly through the principles of togetherness and efficiency with justice.

Not starting from the same point

Allowing micro-enterprises to compete freely with large corporations may appear neutral, but it is not necessarily fair. Large business actors possess capital, technology, distribution networks, consumer data, and the ability to absorb losses over the long term. Micro-enterprise actors often do not even have adequate bookkeeping, collateral, certainty of business premises, or the ability to enter modern supply chains.

When two parties with vastly different capacities are treated identically, a policy that seems neutral can actually widen inequality. Justice is not always about providing equal treatment. In certain circumstances, justice means providing different support so that everyone has a comparable opportunity.

Data shows that these “small fish” are not a marginal group in our economy. They constitute the largest part of daily economic life.

Data from the Ministry of MSMEs recorded that in 2024 there were 56,142,687 Micro, Small, and Medium scale business units, representing 99.9% of total business units. Likewise, the workforce employed in this sector totalled 121.8 million people, or more than 84% of all employed persons. Most actors in these people-based sectors operate on a small scale and face limited productivity and business protection.

At the same time, access to financing does not yet fully reflect the large role of the people’s economy. MSMEs, whose contribution is around 60 per cent of national GDP, only access less than 20 per cent of bank credit.

A report from the Financial Services Authority (OJK) also shows that MSME credit up to May 2026 only grew by 0.60 per cent year-on-year, far from the growth of general bank credit which grew by 11.51 per cent. This reveals an irony where small business actors, who are expected to be the backbone of the economy and job creators, still have limited financing space.

Inequality is indeed showing improvement. BPS recorded that Indonesia’s Gini ratio fell from 0.381 in September 2024 to 0.363 in