More spending on 'people's economy'

More spending on 'people's economy'

From Neraca

On Jan. 5 President Habibie unveiled the 1999/2000 draft state
budget. Irrespective of the controversy over the deficit and
large financial sources as cited in the draft budget, it is wise
to take into account the worries expressed by our economists
about what the government's small spending budget should be spent
on.

At present the government's chief income earners are sales
taxes and income taxes, and the proceeds from the sale of state
enterprises. Much of the budget will be used to cover the
interest on bonds for banking recapitalization (Rp 35 trillion)
and foreign debt installments (Rp 75 trillion).

Large funds have also been allocated for civil servants and
Armed Forces members and. The government has also been planning
to lift its subsidy on aircraft fuel and maintain its subsidy on
petrol for people in the lower income brackets.

All in all, the government has dramatically cut spending in
comparison with last year's budget. The government should in fact
allocate more funds for the people's economy, namely to open up
employment opportunities and promote people's purchasing power.

Stronger purchasing power will indirectly help the economy as
a whole. According to data compiled by the Central Bureau of
Statistics, consumers have been spending less and less. Although
the proportion of spending on household necessities has risen
this year, the overall demand for household needs has declined,
as reflected in the sales figures.

If funds can be made available to boost the grassroots
economy, one benefit will be wealth equity, that is, a narrowing
of the gap between rich and poor. In this way, economic
oppression and human rights "robbery" may be overcome.

So, if the government's spending budget is geared more towards
the "people's economy", it will benefit the country both
economically and socially. This is a belief not based on a hatred
for business tycoons, but rather on social theories aimed at
eliminating poverty and improving on the outdated economic
policies, which emphasized growth but proved to be a failure for
the country.

ANANG

Jakarta