Compete for Strong Work Program

KOMPAS/HERU SRI KUMORO

Water flows through an irrigation channel in rice fields in Nyamat, Tengaran, Semarang regency, Central Java, as seen in this photo taken on Thursday (13/12/2018). The availability of water and irrigation channels is one of the factors that determine the success of rice harvests.

Lately, the public media has been filled with news related to political hustle and bustle. Not only social media, but the mainstream media, both print and electronic, are dominated by political news. In fact, unimportant and simple statements have often become viral and become top news headlines.

The usual terms, such Boyolali, Genderuwo and Sontoloyo, have triggered prolonged discussions. There are almost no debates and public discourses that touch on the main issues of society.

Using a political gimmick is often more important than holding a comprehensive discussion on the real problems of society as a way to educate people. As elections are vital and are the main instruments that determines the direction of the future of the nation, it is therefore important to prioritize rational, not emotional considerations.

There are at least 10 crucial economic problems that would become the work of whoever are elected president and vice president.

First, restoring people\'s purchasing power. The main contributor to Indonesia\'s economic growth is household consumption at more than 56 percent. Consumers are the main pillar of economic growth. Even though inflation is under control, economic growth remains stagnant if consumption is not boosted. In fact, the economy could potentially fall into the middle-income trap. Therefore, a breakthrough in policy and a concrete program is needed to remove structural problems.

Second, food sovereignty and independence. The availability of foods is the main pillar and an absolute requirement for state sovereignty. Therefore, managing the food sector does not merely ensure the availability of food. Food independence is a necessity. Dependence on imported food makes economic stability vulnerable.

According to data issued by Statistics Indonesia (BPS), the area of rice fields decreased from 7.7 million hectares in 2013 to 7.1 million ha in 2018. Agricultural problems are very complex, both upstream and downstream, and include the conversion of land use, the migration of young workers to cities and the low welfare of the farmers.

Third, sovereignty and energy security. Energy is the spearhead of productivity and competitiveness. The availability of efficient energy is a prerequisite to promote the competitiveness of the industrial sector. If imports of fuel (BBM) continue to increase, Indonesia will undoubtedly find it difficult to reach an efficient energy level. Also, fluctuations in world oil prices have an impact on the domestic economy.

Fourth, coping with premature deindustrialization. According to historical records, industry proved to be the main driver of growth. The Indonesian economy was able to grow above 7 percent when industry grew in double digits. Building competitive industrial estates are the main requirement to encourage

reindustrialization. Indonesia needs to establish a national company that can professionally manage industrial estates. They would not only offer one-stop services, but would coordinate and integrate.

Fifth, the threat of imported products. If you look at macro data related to the structure of imports, Indonesia seems to have nothing to worry about because imports are still dominated by raw materials (75 percent) and capital goods (16 percent), while consumer goods only make up about 9 percent. However, if it is crossed with data on the type of goods and countries of origin, there is an asymmetrical relationship. Although imports are dominated by raw materials, they are mostly aimed at the domestic market.

Sixth, the pressure of the current account deficit has been a structural problem for decades. This is not merely a monetary problem. The contributors, among others, are the service sector deficit and primary income. The dependence on foreign ships, for example, should be resolved by building a national logistics center.

Seventh, getting out of the debt trap. Amid an economic slowdown, a budget deficit policy is often needed to provide fiscal stimulus to boost growth rates. The debate is not just about the size and ratio of debt that is considered safe. The most important thing is the productivity of the debt that can accelerate economic growth. If debt increases, but the productive sector weakens and government revenues are stagnant, there must be something wrong with debt management.

Eighth, the economic challenges of the digital era. Technological advancement cannot be avoided. The trend of the digital economy is not a threat to employment, but rather builds momentum to create broader employment opportunities. The adoption of a digital economy in agriculture, for example, can encourage the younger generations to improve efficiency in the sector. They can be involved in distribution through e-commerce or use application technology to improve productivity.

Ninth, the creation of jobs. The availability of employment opportunities becomes the most crucial point, both politically and economically. Work is the source of life. Difficulties in finding jobs can lead to social turmoil in both developing and developed countries. In fact, in the United States the inability to reduce unemployment could be used a reason to impeach the president.

Tenth, realize the people’s welfare. Statistically, the chronic poverty rate has declined to one digit (9.82 percent) or only about 25.95 million people. However, poverty and inequality would always be hot-button issues to trigger debates. Differences in benchmarks and interpretation of data are sources for the arguments.

The community is certainly waiting for concrete programs from the two presidential and vice-presidential candidates regarding these 10 crucial problems. So, let’s compete over concrete programs and ideas that can build civilization.

Enny Sri Hartati, Executive Director of the Institute for Development on Economics and Finance