Rediscovering people

Rediscovering people

Indonesia is in for another robust year with economic growth
of more than 7 percent, according to the predictions of both
government and private-sector economists. Very rarely have
economists of both camps been so unanimous about the economic
outlook despite the political overtones of the national agenda in
the run-up to the May 29 general election. The predictions are
based on two basic assumptions that the present national
leadership will be re-elected and the fundamentals of the economy
will remain strong and healthy.

The assumptions go further to include that the leadership's
re-election will guarantee the continuation of economic and
bureaucratic reforms. Further down the line, this means
consistent major economic policies based on an export-led
strategy. Because this kind of macroeconomic management has
proven its success in making economic fundamentals strong and
sound, the outcome of the upcoming election is not expected to
bring about any fundamental change to macroeconomic policy.

Consistency is a boon to private investment, which have since
the mid-1980s become the engine of economic growth, because it
means predictability -- the condition which distinguishes
business from gambling. And capital investment thrives in an
environment which allows reasonable calculation of risk.

But the upbeat predictions should not make us complacent,
because they are qualified with worrying reservations. The higher
incidence of riots in the last year means we should still be on
guard despite the rosy economic outlook. Social and political
stability is precarious and vulnerable to sudden brutal outbursts
of discontent and restlessness, which are often simply set off by
wild rumors. Another bout of mass violence, even though
geographically limited, would not only reduce the nation's
economic assets but also increase what foreign investors see as
country risk. The higher the country risk, the higher will be the
cost of foreign loans which we have to pay and the higher will be
people's tendency to think short term. Needless to say, this is
not conducive for resource-based investments which are mostly
long term.

As we enter the New Year, we should critically reflect upon
the reasons which could have so easily led mobs to rampage and
commit other destructive acts. The government and the ruling
Golkar, though certain of another majority win in the upcoming
election, as they have always been in the past 25 years, should
not be misled by the misperception that things are basically all
right.

The latest wave of incidents should instead force the
government to rediscover the people as the end of, and not the
means to, development. Several cabinet ministers have often
preached about the urgent need to empower the people but not much
of this has been translated into development strategy or policy.
What we have observed so far have been mostly ad hoc measures
such as the extension of concessional or interest-free loans,
preferential treatment and various other forms of political
goodies which are unsustainable in the long run and do not
significantly empower the people.

People-centered development means participation, people's
involvement, social mobilization and the broadening of economic,
social and political bases. Empowering people also means
re-engineering the government for the villages and dismantling
the monolithic stranglehold of the large and corrupt central
bureaucracy. Such a development mode may not generate such high
growth as the free market system. But the latest wave of
incidents has disclosed the market system's failure to address
inequality, injustice and inhumanity. We have also noticed how
many areas have simply become playgrounds for investors and
wealth extractors, who surely contribute to the generation of
high growth but do so without great regard for degradation,
deprivation, denudation or the eviction of people.