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JAKARTA
POST, 10 Mei 2013
It is common
knowledge that the debt and fiscal deficits experienced by some European
countries have remained unresolved leading global economic conditions to be
shrouded in uncertainty.
Nevertheless, the impact of the European crisis on the Indonesian economy has been relatively restrained. The nation’s economic outlook for 2013 has been estimated to be even better than last year and economic growth has been projected to grow beyond 6.8 percent, while unemployment has been expected to drop below 6.1 percent.
Optimism also appears in some surveys. In its latest report, the World Economic Forum (WEF) stated that Indonesia’s competitiveness index for the period of 2012-2013 was much higher than in the previous period. Further, in the World Bank’s 2012 logistics performance survey of 155 countries, Indonesia improved from 75th position to 59th.
Behind the optimism there is the phenomenon of growth without equality, in that the benefits of development have been perceived to have been received by the top layer of the community. For instance, growth orientation only encourages the development of large-scale businesses and industries, resulting in a wider gap between small and medium enterprises (SMEs) and big business. This is mainly due to the failure of the sectoral planning approach, which was expected to link the programs and regulations of the central government and local governments.
We also have evidence of regional disparities, particularly between rural and urban areas, where economic investment, i.e., infrastructure, has been directed to serve the urban areas.
As a consequence, village economies, which give impetus to the rural economy, do not proportionally gain added value and only functions as a market spectator in primary commodity distribution from rural to urban areas. In such a context, there is a backwash effect, where urban areas take advantage of distribution services, which can be detrimental to economic growth in rural and village areas.
Along with those problems, there are some issues related to the gaps between sectors and regions. In accordance with the vision and mission of regional autonomy, changes in our paradigm must be made, so that a regional planning approach, which constitutes sectoral development in the region, can utilize and manage the resource potential of an area.
In practice, a regional planning approaches lied in the implementation of the development concept in each region in a comprehensive and integrated manner. Therefore, each level of government must realize the efficiency and effectiveness of their planning and budgeting functions, so that there are interrelated programs at ministerial, provincial and municipal levels, instead of creating programs that duplicate or even overlap each other.
To achieve this, development should be an open process in which the stages of socialization, dialogue, discussion and public policy hearings and consultations are carried out intensively and jointly by all stakeholders, without disregarding the political and technical aspects.
In addition, the formulating process should be a two-way equalizing process that combines bottom-up planning — starting from the village all the way up to the central level — as well as top down.
Ironically, the regional planning approach has often been neglected by decision makers at the top layer of the central government, who prefer to focus on a few certain regions, such as a national priority to improve underdeveloped and border areas. Thus, what we need is a combined approach instead of just solely relying on sectoral or regional approaches.
Sectoral planning always starts with a question regarding on what sector needs to be developed, asking how much should be produced, by what means and when production should begin. In contrast, a regional approach is more focused on which priority sectors need to be develope. These questions are very important, particularly to those who have concerns in the coordination of regional development.
Basically, both approaches are implicitly stipulated in the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development 2011-2025, where the first phase emphasizes quick wins and on action plans for the “debottlenecking” various pending regulations, licenses, incentives, as well as preparing the ground for major investments.
Though the implementation of the first phase itself reveals a very ambitious short-term agenda for the reform of cross-cutting policies, the need of political commitments, which involves inter-ministerial consensus as well as leadership amongst local elites, is essential. Otherwise, the passion to move Indonesia into the top 10 global economies by 2025 will be just a mere aspiration. ●
Nevertheless, the impact of the European crisis on the Indonesian economy has been relatively restrained. The nation’s economic outlook for 2013 has been estimated to be even better than last year and economic growth has been projected to grow beyond 6.8 percent, while unemployment has been expected to drop below 6.1 percent.
Optimism also appears in some surveys. In its latest report, the World Economic Forum (WEF) stated that Indonesia’s competitiveness index for the period of 2012-2013 was much higher than in the previous period. Further, in the World Bank’s 2012 logistics performance survey of 155 countries, Indonesia improved from 75th position to 59th.
Behind the optimism there is the phenomenon of growth without equality, in that the benefits of development have been perceived to have been received by the top layer of the community. For instance, growth orientation only encourages the development of large-scale businesses and industries, resulting in a wider gap between small and medium enterprises (SMEs) and big business. This is mainly due to the failure of the sectoral planning approach, which was expected to link the programs and regulations of the central government and local governments.
We also have evidence of regional disparities, particularly between rural and urban areas, where economic investment, i.e., infrastructure, has been directed to serve the urban areas.
As a consequence, village economies, which give impetus to the rural economy, do not proportionally gain added value and only functions as a market spectator in primary commodity distribution from rural to urban areas. In such a context, there is a backwash effect, where urban areas take advantage of distribution services, which can be detrimental to economic growth in rural and village areas.
Along with those problems, there are some issues related to the gaps between sectors and regions. In accordance with the vision and mission of regional autonomy, changes in our paradigm must be made, so that a regional planning approach, which constitutes sectoral development in the region, can utilize and manage the resource potential of an area.
In practice, a regional planning approaches lied in the implementation of the development concept in each region in a comprehensive and integrated manner. Therefore, each level of government must realize the efficiency and effectiveness of their planning and budgeting functions, so that there are interrelated programs at ministerial, provincial and municipal levels, instead of creating programs that duplicate or even overlap each other.
To achieve this, development should be an open process in which the stages of socialization, dialogue, discussion and public policy hearings and consultations are carried out intensively and jointly by all stakeholders, without disregarding the political and technical aspects.
In addition, the formulating process should be a two-way equalizing process that combines bottom-up planning — starting from the village all the way up to the central level — as well as top down.
Ironically, the regional planning approach has often been neglected by decision makers at the top layer of the central government, who prefer to focus on a few certain regions, such as a national priority to improve underdeveloped and border areas. Thus, what we need is a combined approach instead of just solely relying on sectoral or regional approaches.
Sectoral planning always starts with a question regarding on what sector needs to be developed, asking how much should be produced, by what means and when production should begin. In contrast, a regional approach is more focused on which priority sectors need to be develope. These questions are very important, particularly to those who have concerns in the coordination of regional development.
Basically, both approaches are implicitly stipulated in the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development 2011-2025, where the first phase emphasizes quick wins and on action plans for the “debottlenecking” various pending regulations, licenses, incentives, as well as preparing the ground for major investments.
Though the implementation of the first phase itself reveals a very ambitious short-term agenda for the reform of cross-cutting policies, the need of political commitments, which involves inter-ministerial consensus as well as leadership amongst local elites, is essential. Otherwise, the passion to move Indonesia into the top 10 global economies by 2025 will be just a mere aspiration. ●
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