When Fuel Price Must be Raising.......

So many researches were borned before government to decide raising fuel on middle of 2013. Researcher’s team from 3 top rank university had ever been recommended three ways for government created optimal fuel subsidize policy. First, the team proposed to raise fuel price for Rp.500,00, and realocation subsidize to public transportations. It could be compensation and vague potential infaltion to be higher. Second, all of users of private transportation have to move from premium (RON 88) to pertamax (RON 92). It’s cleared to reduce fuel subsidize. Third, we could be used fuel consumption controlled system to restrict over demand. But, since the team proposed recommendation around on middle of 2011, there’re no one of recommendation to propose parliament. At the end, results of comprehensive research had never been based government to make policy for fuel prices.

Now, after almost 2 years, the government have to create new policy about fuel price. Adjusment price need to do now, cause fuel subsidized around Rp.297,7 T or 46,01 million kilo litres, cause its makes heavy use for national budget. With total of subsidize around Rp.446,8 T or 26 % of national budget. This means budget for subsidize over than education budget, its shows possibility misallocation of national budget. Because many studies had been showed almost 70% fuel subsidize to give benefit for middle to rich people and the rest felt of poor people. By rational its makes sense the owner of private transportation only for both of middle and rich class. However there’re consequency created new poor people if fuel price have to raising. I think it’s interesting, the government in the middle position, the dilemma for regulator commonly happened so Indonesia can learn by western countries when they’re made policy to reduce fuel price subsidize.

I believed almost economists know consequencies when fuel price raising. So, always there’re solution to compensate fuel price raising. We can say the government too late, if they just understand to raise fuel price are important. In spite of that Government should prepare all of possibility happened after fuel price raising. Still be better late rather than steady on keep fuel price on Rp.4.500. However, discussion within government and parliament, just will schedule on middle of May 2013. We hope the discussion can be created optimalized policy about fuel price. And it’s more important to know consequencies after implementation of policy. So, the anticipation can be early to reduce bad impact for Indonesia economy. If economic interest still has been prioritized rather than politics, we believe fuel price raising has been optimal policy, but they must decide how much price have to increase? It’s still on debate able within of them.

Consequencies of fuel price increasing

Now, Indonesia has got economic growth 6,2 % on 2012, its second best growth after China cause global economics is still on suffered, just created growth 3% under normal criteria realeased by IMF. As second best growth perfomanced in the world, Indonesia has been interesting point for foreign investor come to invest. Indonesia has not only been good economic performance, but also Indonesia offer high yield for investor rather than other countries, even some contries has been yields near 0%. So, as country with investment grade rating bring consequencies for fundamental economy. At the end, Indonesia has to be ready to welcome demand for capital product, consumption (fuels, food stuff, etc), and others, will increase and bring consequencies for domestic economy. One of phenomena today is about trend of increasing fuel subsidized consumption each years. It’s one impact of economic growth of Indonesia. I think its common phenomenon when economic growth drive increasing consumption, investment, government expenditure, and net export.

In Economics Studies, when planned aggregate expenditure lower than aggregate expenditure, they will increase spending until closed equlibrium point. Indonesia has been higher equilibrium point cause component likes government expenditure, public consumption, and investment, increase in same times and create new equilibrium. At the end, economic expansion will be moved toward new equilibrium point. So, the government has to adjust fuel subsidy price because subsidized allocation in national budget nearby 50 percent. It’s critical situation, in other side government has to allocate budget to suport investment and industry facilities such as infrastructures, power plants, and research and development. So, government must take position to increase fuel price and to reduce fuel subsidy, i think its will be smart policy because we can reallocate budget to other sectors surely give more benefit for Indonesia’s Economy.

Now, increasing fuel subsidy price have to do immediately. Because every industry needs certainty supply of fuel, to grow their business. That’s why to suport the high intensity of economy condition, policy for increasing subsidy fuel price need to do as soon as possible. However, the policy will has some consequencies for Indonesia’s macroeconomy. First, Increasing fuel price has got to drive higher inflation. it means production cost will be increasing too in line with fuel price. At the end, price product will increase following fuel price as input factor of production. Second, increasing fuel subsidy price will be brought down willingness to pay for people. Without growth of income, increasing fuel subsidy price will potential reduce willingness to pay. At the end, people welfare are down because purchasing power of money being down too. Third, the policy will create potential new poor people. With higher of inflation and downing of purchasing power are indicators to know potential wideness of poor people.

But, for this situation government don’t have to worry because many social program has been built to reduce and strengthen people life around and under poverty line. we know about Jamkesmas, program keluarga harapan (PKH), raskin, bantuan siswa miskin (BSM), PNPM Mandiri, bantuan operasional sekolah (BOS),  and kredit usaha rakyat (KUR). All programs have been run for some years ago, it means these programs have been giving benefit to people. So, with assume these programs can run optimal, i believed that increasing fuel subsidy price can not  disturb Indonesia economy  stabilize in the long run. Intead of the policy to increase fuel subsidy price can keep momentum growth domestic economy. At the end, no space reason for government has not to increasing fuel subsidy price, except if parliament disapproved.    

What does impact of MP3EI to accelerate and expand Economic Development?

When we knew MP3EI has been tremendous program to accelerate Indonesia Economic Development. MP3EI used to approach by sectoral and geographic has been emphasize with economic corridor.  This plan has been run middle of 2011 launched by President Republic of Indonesia. And, end of May 2013 MP3EI will celebrate for 2nd Anniversary since launched. So, what we’ve got impact of economic accelerating and expansion program?

In gradually, Government launched success story where are projects groundbreaking and inaugurating. By KP3EI as committee in charge to make sure project can be run, launched total investment project groundbreaking and inauguration around IDR 626 T, with composition real sectors with IDR 348 T and infrastructures around IDR 278 T. The achievement so far away from target where’s realisation projects until 2014 around 4000 T both of real sectors and infrastructures. It means government has to pursue implementation investment including in MP3EI until IDR 3374 T. I think is almost impossible implementation of projects run as like target in MP3EI document on 2014. At the end, MP3EI has still been minimalize impact for Indonesia’s Economic Development.

Minimalize impact of MP3EI for Indonesia Economic Development because KP3EI has not been “optimalized” to acclerate debottlenecking for all of projects. At the end, to many projects cann’t be run and operational on schedule both of infrastructures and real sectors. There are some bottlenecking for KP3EI to accelerate projects in MP3EI. First, KP3EI is not super power agency and has not been authority to decide and make a policy for debottlenecking projects. At the end KP3EI is just administrative agency where has worked to compile all of projects, bottleneck including in projects, and coordination function to connect within ministry or agencies. Second, “Not Business as Usual” is only jargon can not push all government ministry and or agencies to work more for accelation and expansion economic development. In MP3EI’s document spirit development had been sounded but it did not impact to government to do more. Eventually, economic acceleration and expansion can not be implemented on the target.

Third, KP3EI has been problem with coordination both internal (for each secretariat corridors) and external (within other institution). Bad coordination for Indonesia’s Government is not new thing, that why many programs created dan run can never create optimalize results. And, KP3EI is part of bad coordination in Indonesia’s Government. For example, with spirit “not business as usual” KP3EI should have clear agenda to accelerate and bottleneck projects. In fact, KP3EI can be run what should they do? At the end, we know the results of implementation projects so far from target in MP3EI’s document. Bad Coordination creates higher “cost of time lag of investment” its makes distortion economy than good coordination.

When we think about impact of MP3EI for Indonesia Economic, we can say MP3EI has been benefited for economic development. But it’s performed so far from being supposed. And then, minimalize contribution so creates minimalize benefit for Indonesian people. We talk about contribution to growth by some simply research MP3EI can create growth 0,5-1% over than before. The asumption is all projects including in MP3EI can run and operational on schedule. In fact, it’s assumption can not be required and has been potential down over than expectation. With minimilize realisation investment projects both infrastructures and real sectors, MP3EI is so far from spirit of economic development. If contribution for growth so little, how come to increase Indonesia people welfare? Eventually, with or without MP3EI, Indonesia still has high growth cause fundamental Indonesia economy today is very strong. But the question mark who’s got benefit from the high growth? I think still on few people Indonesia but they got high share of GDP.


published to in this link: http://ekonomi.kompasiana.com/moneter/2013/04/25/what-does-impact-of-mp3ei-to-accelerate-and-expand-economic-development-554752.html

What we should do impact evaluation for MP3EI ????

Indonesia’s economic development has made tremendous progreses in some last decades. Basic economic foundation still on agriculture and raw material, now Indonesia has a little bit moved to Industrial economic. However, shared from agriculture still dominant in Indonesia Economic. It means as developing country, Indonesia has been economic potential to raising in the future. Now, Economic activities has focused toward manufacturing and services oriented industry. It’s focused can be improved the nation’s prosperity, which reflected by per Capita Income (PCI), Human Development Index (HDI). Data statistics show from 1980 to 2010, HDI to increase from 0.39 to 0.60, PCI increase from USD 1,318 to USD 3,004.  

In International forum Indonesia has been a much bigger role in global economy. Currently, Indonesia ranks 17th as the largest in the world. In some regional and global forum, Indonesia has been strategic position as emergency country not only in ASEAN, East Asia, and APEC, but also in G-20 and others forum. Indonesia had successfully passed away global economic crisis in 2008, which was kept growth still on positive around 4.3%, it’s brought Indonesia had praised by International agencies. And after some years later, Indonesia has showed great progresses in economic condition, the nation’s had been raising debt rating in investment grade by international debt rating agencies.

Indonesia has big dream to be developed country 2025, so, the nation’s need to prepare Masterplan for Acceleration and Expansion of Indonesia Economic Development (MP3EI). For realize the dreaming, there are some challenges that need to resolved. The domestic dynamic and global economy requires Indonesia can be used all their resources and ready for any change. The effective and efficient are keys to make Indonesia to be developed countries. So, debottlenecking and bureaucracy reform still have been working for the government.

The vision in MP3EI has been making Indonesia to be developed country in 2025. Through acceleration and expansion of economic development, can be increasing the quality of Indonesia’s human development with high income and purchasing power, as well as improved equality and quality of life whole nation. So, hardworking and smartworking by government to accelerate and expand economic development needed. To implementation of MP3EI as document to be realized, need sinergize with all stakeholder, such as goverment as regulator, investors, parliamenter, and all of parts involved in.

Now, MP3EI has been working since middle of 2011, many achieving to realize by groundbreaking and inauguration of the projects. Government was launched 2011 main sectors 58 project with valued Rp 239 trillion, and in 2012 launched 34 projects with valued Rp 109 trillion, since MP3EI be launched in 2011 MP3EI can be realizing and ensuring implemented 92 projects with valued Rp 348 trillion, these are projects without infrastructures. For infrastructures the government’s launched total projects 99 with valued Rp 278 trillion, its spreads in all corridor economic in MP3EI. In 2011 infrastructures projects was launched 59 projects with valued Rp 196 trillion and in 2012 was launched 40 projects with valued Rp 82 trillion. There are showed implementation project in MP3EI since launched by President Indonesia of Republic in 2011.

We need to evaluate  impact of MP3EI contribution for economic development since launched. MP3EI has been targeted with PCI of USD 14,250-USD 15,500 with total GDP of USD 4.0-4.5 trillion by 2025. Where’s, Indonesia needs real economic growth of 6.4-7.5 percent is expected  for period of 2011-2014 (MP3EI’s document). This economic growth has to follow with decreasing inflation from 6.5 percent in 2011-2014 to 3 percent in 2025. The combination of  low inflation and high growth economic are showing characteristics of a developed country. That’s why impact evaluation of MP3EI has to do it for ensuring implementation program on the target. 

Dynamic Urban Life in Jakarta

Since 2007 in the past, and I’m back to Jakarta for first time after completed my study in Yogyakarta, jakarta still likes common metropolitan with its social problem. Crime, poverty, traffic jam, chaotic, hardness, and other always be face Jakarta city. With almost 10 million people in 2010, Jakarta likes timing Boom, we only wait blow up at the time. People always ready anytime to prepare safely physics and mind to fight with the hardness jakarta’s condition. The condition drive jakarta’s people be hard before bet hitting back from others. “Kill to kill, destroyed to destroyed , and greediness” like drawing jakarta’s life. Who’s stronger and easy adopted will survive? I guess its right designation our city (Jakarta).

The big question is why the people interestly coming and fighting in Jakarta? What’s wrong with Indonesia development? In the remains of Jakarta glory, i think Jakarta is not already comfortable city for live. What’s the people only pursue money and glory of modernity from jakarta offer? Actually, may be jakarta not comfotable city, but its still be better than others city in Indonesia. i think it’s make sence short reason for new comers and incumbent still lliving in Jakarta. And, it will be one of the reason for people still stay in Jakarta.

When looks jakarta and Indonesia’s problem, we can devide in two part, first, about Planning Economic Development in Indonesia and second, life style in modern people’s live in city offer satisfaction of the world (changing from convensional to modern life style). First, Planning Economic Development Indonesia still in partial development, at the end create inequality from island by island, province by province, and district by district. The policy maker has been always focused for high growth, and usually besides equality of development. It make sense and there is in Masterplan Development for Acceleration and Expansion Indonesia for 2011-2025, we know budget share for infrastructure still much in Java corridors with IDR 844 Trillion, the biggest besides other corridors. Despite of budget share for infrastructure development still there in other corridors, but portion for every corridor especially for east Indonesia too little, by considering of high inflation. By masterplan, Government just pursue high growth, create job opportunity, and welfare. But government has forgot inequality between island, province, and district. At the end, transmigration from village to urban wil absolutely be happened. It’s been problem for Jakarta, as the biggest city with high activity in Indonesia.

Every years population in Jakarta increase around 1,4 % or 135.000 people, it’s mixed from natality, and urbanisation. Amount of people migration to jakarta around 40.000 people in 2012. it’s realize from bad planning development in Indonesia. Goverment just think about growth and forgotten of inequality. Phenomenon of Jakarta people show scary about population density, in high Jakarta’s density population there’s in Johar Baru (sub district) with 48.952 people per square kilometres. And average population density in Jakarta around 14.476 people per square kilometres. By data Statistics 2010, population density Jakarta consist of four district such as Central Jakarta with 18.675 people, West Jakarta with 14.562 people, East Jakarta with 14.290 people, and North Jakarta with 11.218 people. It’s showed strategic issues about population density fearness and will be big social problem for Jakarta.

Second, modern lifestyle in Jakarta has reasoned for people move to Jakarta. Many people from other province or district moved to jakarta cause lifestyle offer and many entertainment place for vacation. Likes metropolitan’s city, Jakarta offer glamor of lifestyle signed from many buliding shopping mall, entertainment place likes Ancol, and others. And, modern lifestyle offer new education likes center of technology, high speed internet access, and offer high quality of modern lifestyle. Jakarta likes high level life in Indonesia, not strange people every years are moved to jakarta to get everything. It almost absolutely they’ve never gotten from the their origin province or district.

Magnetic Jakarta will be gone, when the city can’t  accommodate the people living standard. It will be come if migration and population growth in Jakarta can’t be restrained by Government’s province. The dynamic urban is happened in biggest city in Indonesia. Now, the signed is seen already, end of jakarta glory. But, in bad condition Jakarta still be better than others city in Indonesia. It’s interesting dynamics life from metropolist. Jakarta is still interesting destinastion city to find money and anything what you want to. The city offer everything starts from pleasure, working chance, carrier, competition, and others. So, fighting spirit and good mental will be prepared if you want to stay in Jakarta. Everybody has to be familiar with hard life in the city likes traffic jam, polution, chaotic, inequality, and other social problem. It’s dynamic urban people with all pleasure and painful life in The Biggest City in Indonesia. Do you still dare live in Jakarta or it’s challange yourself to fight in Jakarta?              

Pemerataan Pembangunan hanya Angan-angan

Oleh: Felix Wisnu Handoyo

Permasalahan pembangunan ekonomi di Indonesia tampaknya tidak akan segera berakhir. Kesenjangan desa kota, pembangunan terpusat, dan kesenjangan wilayah barat dan timur tampaknya masih akan dirasakan oleh masyarakat Indonesia. Program pembangunan yang dijalankan pemerintah tidak memberikan indikasi bagi pemerataan pembangunan ekonomi.

MP3EI yang seyogyanya menjadi garda depan pembangunan ekonomi Indonesia tampaknya belum akan mampu mengatasi masalah kesenjangan. Kondisi sebaliknya terjadi, kesenjangan pembangunan akan semakin lebar. Data MP3EI menyebutkan bahwa nilai investasi infrastruktur hingga 2014 sebesar Rp.1812 triliun untuk semua koridor ekonomi. Dari nilai tersebut, wilayah timur Indonesia (Bali-NT, Sulawesi, dan Papua dan Kep. Maluku) hanya mendapat porsi sebesar Rp.349 triliun (19,26%). Sedangkan, wilayah barat Indonesia (Sumatera, Jawa,dan Kalimantan) memiliki porsi yang jauh lebih besar dengan nilai investasi Rp.1463 Trilliun (80,73%), dari nilai tersebut share terbesar di Jawa sekitar Rp.844 Triliun (57,68%), diikuti Sumatera sebesar Rp.414 Triliun (28,29%), dan Kalimantan sebesar Rp.205 Triliun (14,01%).  Total investasi (kegiatan ekonomi dan infrastruktur)Pemerintah perlu kembali memahami esensi dari dasar pembangunan. Sebab jika tidak upaya percepatan dan perluasan hanya akan menimbulkan kesenjangan pembangunan ekonomi semakin lebar.

Berdasarkan data MP3EI tersebut, ada dua hal yang perlu menjadi perhatian pemerintah dalam pelaksanaan percepatan dan perluasan pembangunan ekonomi Indonesia. Pertama, pembagian investasi untuk infrastruktur lebih mengedepankan pembangunan di wilayah barat, terutama di Jawa. Nilai investasi sektor infrastruktur sebesar Rp.1812 Triliun seharusnya mengedepankan pembangunan wilayah timur. Artinya, pembangunan jalan, jembatan, bandara, dan pelabuhan seharusnya dimasifkan di Sulawesi, Bali-NT, dan Papua. Namun, kenyataannya share dititikberatkan pada Jawa dengan nilai mencapai Rp.844 Triliun atau sebesar 48,6 % dari total seluruh investasi infrastruktur.

Apabila pola demikian yang terjadi kita tidak dapat mengatakan percepatan dan perluasan pembangunan, melainkan pemusatan dan peningkatan kesenjangan pembangunan. Pasalnya, wilayah Indonesia Timur yang membutuhkan pembangunan infrastruktur yang massif mendapatkan porsi yang lebih sedikit. Bayangkan, dengan nilai investasi yang relative kecil dan inflasi yang tinggi berapa banyak infrastruktur yang dapat dibangun. Kondisi ini menggambarkan pembangunan infrastruktur di wilayah timur akan tetap minim dan tertinggal.

Kedua, paradigma sentra produksi men-derive pembangunan infrastruktur, tampaknya perlu dimodifikasi menjadi pembangunan infrastruktur yang akan men-derive sentra produksi. Paradigma tersebut tidak dapat direalisasikan untuk Indonesia sebelah timur, sebab tanpa adanya infrastruktur akan meningkatkan  cost of transaction. Maka, hanya investor besar saja yang akan masuk karena mereka mampu untuk membangun jalan, pelabuhan, dan bandara sendiri untuk menekan biaya tersebut. Sedangkan, untuk investasi yang relatif kecil, pembangunan infrastruktur akan menyebabkan pembengkakan biaya produksi yang akan menurunkan daya saing produk.

Pembangunan infrastruktur yang massif memang perlu menjadi perhatian penuh pemerintah. Sebab, infrastruktur merupakan tulang punggung perekonomian sebuah negara. Jika kita perhatikan tidak ada negara maju yang memiliki infrastruktur yang buruk. Oleh sebab itu, mimpi menjadi negara besar secara ekonomi di tahun 2025 perlu diawali dengan tekat pembangunan infrastruktur disegala aspek dan wilayah dengan tetap memerhatikan pemerataan pembangunannya.

Hambatan Pembangunan

                Memang bukan perkara mudah menciptakan pemerataan pembangunan ekonomi nasional. Berbagai program pemerintah telah diciptakan nyata-nyatanya belum mampu menyelesaikan permasalahan pembangunan ekonomi di negeri ini. Bayang-bayang sentralisasi pembangunan masih menaungi pembuat kebijakan di negeri. Tak hayal pembangunan hanya terpusat suatu wilayah tanpa adanya upaya menciptakan kutub pertumbuhan ekonomi yang baru. Hal  ini terbukti dalam pembangunan infrastruktur yang masih mengedepankan pembangunan di Jawa. Sedangkan, pembangunan di wilayah lainnya terbilang relatif kecil. Tampaknya pemerintah masih akan terus menggenjot pembangunan di Jawa, mengingat besarnya jumlah penduduk. Padahal fenomena social yang terjadi merupakan dampak turunan dari tidak meratanya pembangunan di segala aspek dan wilayah.

                Sedikitnya ada dua hambatan yang menyebabkan pemerataan pembangunan sulit diwujudkan. Pertama, minimnya dana pembangunan ekonomi, khususnya untuk pembangunan infrastruktur. Belanja pemerintah setiap tahunnya masih didominasi oleh gaji pegawai. Sedikitnya, belanja untuk pegawai mencapai 65,5%  atau sebesar Rp.594,69 triliun dari pagu anggaran yang mencapai Rp.908,24 triliun di tahun 2011. Hal ini jelas menghambat pemerintah untuk meningkatkan pembangunan dan perbaikan infrastruktur.

                Kedua, adanya paradigma buruk terkait pembangunan ekonomi. Paradigma pembangunan hanya untuk mengejar pertumbuhan ekonomi, bukan fundamental ekonomi yang menyebabkan sentralisasi pembangunan tetap dipertahankan. Jika kita perhatikan pembangunan infrastruktur di Jawa berbanding terbalik dengan wilayah timur Indonesia. Kesiapan Jawa untuk menciptakan pertumbuhan ekonomi yang tinggi memang sudah tidak diragukan. Namun, bukan berarti pembangunan infrastruktur di wilayah timur tidak penting, justru hal sebaliknya yang seharusnya dilakukan. Paradigma pembangunan yang mengejar pertumbuhan ekonomi yang tinggi dalam jangka pendek menyebabkan realisasi pemerataan pembangunan yang lambat, bahkan cenderung diam di tempat.

                Pemerataan pembangunan ekonomi memang harus dimulai dari pemerataan pembangunan infrastruktur. Jika infrastruktur memadai maka kegiatan ekonomi akan berjalan dengan sendirinya, hal ini akan meningkatkan akses masyarakat untuk berusaha dan berupaya. Maka, pemerataan pembangunan menjadi hal yang penting, tetapi kapan hal tersebut akan terealisasi?