Statistics agency attacks govt's industrial policy
Statistics agency attacks govt's industrial policy
JAKARTA (JP): The burden on the country's external balance of
payment has prompted the government to irrationally pursue
exports at all costs in order to raise badly needed foreign
exchange, Hananto Sigit of the Central Bureau of Statistics
(BPS) said yesterday.
Hananto, head of the bureau's center for statistic services,
told a seminar that such an irrational industrial policy would
not deepen the country's industrial structure nor provide more
employment.
"That's because we are burdened by our external balance of
payments," Hananto told the seminar, organized jointly by the
Centre for Strategic and International Studies and the Padi Kapas
foundation.
The country has been burdened by large foreign debts of up to
US$110 billion and deficits in services, which is projected to
reach $13.9 billion this fiscal year.
Consequently, Hananto said, the government lets footloose
export-oriented industries, like those in garments, footwear and
electronics, to remain in operation to contribute exports even
though they are dependent on imported inputs.
"Their imported inputs range from 80 percent to 100 percent.
So, we do not enjoy the linkage benefits from such industries.
Nor does it provide full employment for our people," he said.
When the country was no longer burdened by large foreign debts
and deficits in services, he said, the government would be able
to develop a more rational industrial policy, which would focus
on deepening the linkage.
Such a linkage was necessary to provide more domestic business
opportunities and create more jobs, which were badly needed to
reduce the wealth disparity in society, Hananto said.
Sjahrir, chairman of the Padi Kapas Foundation, said the
wealth accumulated by the Indonesian Chinese minority had been so
enormous that the government should take affirmative action to
propel the deprived indigenous majority into the economic
mainstream.
H.S. Dillon, an expert at the Ministry of Agriculture, said
efforts to reduce poverty and minimize wealth disparity should
include further empowerment of the agriculture sector in the
country's economy because the sector still provided the most
employment.
Hananto noted that wealth disparity in Indonesia remained
large, with the majority of people living in poverty and only a
small portion of the people living extremely well.
In 1990, for instance, 60.7 percent of all income in the
country was accrued from business surplus or profits, and only 27
percent was from salaries and wages, including those of
professionals.
"The business surplus is so large in Indonesia because it
includes hidden economic rifts which are difficult to measure.
Therefore, efforts to lessen rifts will improve most people's
wages," Hananto said.
He also criticized the government's priority on wealth
redistribution by asking the rich to help the poor through
various mechanism, rather than the primary distribution of
resources, to reduce poverty.
The number of Indonesians living below the poverty line
dropped to 22 million in 1996, or about 11 percent of Indonesia's
200 million people, from almost 26 million in 1993.
"This figure, however, is largely underestimated. Indonesia's
poor are still many," Hananto said.
The 1996 National Socioeconomic Survey defines people living
below the poverty line as those living on Rp 900 a day in rural
areas or Rp 1,300 a day in urban areas.
The 1993 socioeconomic survey classified those living below
the poverty line as those surviving on Rp 600 a day in rural
areas and Rp 900 a day in urban areas.
"Using the 1993 figures, if we increase the level in the
definition into Rp 1,300 per day, then we will have 116 million
poor people or 62 percent of the total population," Hananto said.
If the level was increased again to Rp 3,300 (about the same
level of the 1994 average government-set minimum wages), the
number of poor people would reach 177 million or almost 95
percent of the population, Hananto said. (rid)
Economists -- Page 12