Poverty on the rise

How much we are at present racing against time is illustrated clearly by the problems which we are facing. A researcher at Gadjah Mada University's Center for Population Studies, Muhajir, predicts that 130 million Indonesians will be living in poverty by the end of next year. This is more than half the total number of Indonesians. This explosion will be caused, among other things, by the lack of job opportunities and high inflation. Other predictions are even more gloomy, especially when political aspects are taken into account.

Our private sector cannot be counted on to help us surmount the problems we are currently facing. The government must assume the role of primary driving force by actively intervening in the monetary and banking as well as the real sectors. The government will have to make an effort to boost aggregate demand for goods and services in order to steer the economy back to full employment conditions.

Aside from this Keynesian recipe, another suggestion offered is that the government put the priority on promoting domestic demand, since the still-weak traditional market is not likely to be able to absorb our export products. Then, too, competition from other countries which, like ourselves, are striving to take advantage of the low exchange rate, will be fierce.

Whichever scenario is followed, the government will have to assume the dominant part. Unfortunately, it cannot play that role to the full as long as it is being shaken to its core.

-- Bisnis Indonesia