Tuesday, June 30, 2009

'Ekonomi Kerakyatan', 'Ekonomi Pro-Rakyat'; what was that again?

Disclaimer: Just an argumentative prose from a struggling Kenkyuusei, with no means to offend certain someones or certain things.

Presidential election is crawling nearer, and media recently is just too overwhelmed by a bandwagon war; between Neo-liberalism and State-owned based Economy or 'Ekonomi Kerakyatan' (pardon the mismatch, as i couldnt find any better translation).

So what was this 'Ekonomi Pro Rakyat' or 'Ekonomi Kerakyatan' again?

If 'Ekonomi Pro Rakyat' is meant to give a total liberty for a state-owned enterprise to run a business for the sake of topping the economic welfare, total nationalization of the economy will leave a limited role for private saving, and imply a serious restrictions on private economic activity.

This will consequently result in huge structural distortion, remarked by the presence of monopolization, olygarchy system, economic autarchy and centralized investment decision. The economy will strongly be exposed to domestic-oriented market, sooner or later be separated from other market by international currency inconvertability, trade restrictions and moreover, encourage state monopoly in foreign trade.

The burden of social spending in the name of fair wealth distribution will be astronomically high, relative to the level of economic development. Government should offset the big expenditure mainly by domestic production, as foreign trade is being restricted. On the latter part, the state's budget deficit will be very large, and government will employ monetary expansion to cover the deficit, mainly by increasing money supply which will lead to an increase in inflation. Well, my dear, this is again, the prelude of a crisis!

This -infact- was what happened to Russia pre-Perestroika years.

So are we going to re-employ plausible system that is already proven to be wrong? :)

I believe that Indonesians are smart enough on not to make a wrong move again; to be trapped in a misleading jargon called the 'Ekonomi Kerakyatan' or 'Ekonomi Pro-Rakyat'.

1 comment:

jali said...

tumben pret, tiga postingan trakhir mslh politik semua