History Of Indonesian Economy

A. HISTORY OF INDONESIAN ECONOMY

Indonesian Economy in the Age of Kings

Traits that indicate the triumph of the Indonesian economy is the emergence of the royal empire. Indonesia's strategic layout is also a major factor in the implementation of the Indonesian economy. Location of Indonesia that is squeezed in between two continents, Asia and Europe, and two oceans, the Pacific and Indian oceans becomes luck because that position into a intercontinental commercial voyage. Trafficking of major civilizations such as the Chinese, Roman, and Egyptian membangkirkan spirit of the natives to trade. At that time, began the introduction of money in the form of coins and gold to support the economy. The Indonesian economy is getting shot setekah discovery of a commodity that has great value as a spice.

The Indonesian economy in the Colonial Period

Before Indonesian independence there are 4 countries that invaded, yaiutu including Portuguese, British, Dutch and Japanese. Of the countries that once colonized Indonesia, the Dutch system is very much instilled in the Indonesian economy. Dutch then adopts Merchantilist. Dutch delegate its authority to regulate the VOC Dutch East Indies. To facilitate action in the Dutch East Indies, VOC given the right Octrooi. Although given that right, does not mean the VOC is entitled to the whole economy of the Dutch East Indies. To guarantee the right to a monopoly has been established, the VOC has mastered the trade city and cruise lines. VOCs also establish such regulations Verplichte leverentie (obligation to submit the results of earth VOC) and Contigenten (agricultural tax) to support the monopoly. However, in the VOC disbanded for failing to explore the riches of the Dutch East Indies. Failing that appears on definisit VOC cash. Due to the failure of the VOC eventually taken over by Bataafsche Republiek. However, Bataafsche can not survive long in the face by the financial kekaucaun. In the end, the British took over the Dutch East Indies government.

England tried to change the pattern of the agricultural tax that has been applied by the Dutch 2abad, by setting Landrent (land tax). With this system the indigenous people will have the money to buy English goods or products imported from India. This is the modern imperialism that made the colonies not only to explore its natural resources, but also a product of the state marketing area invaders.

In 1836 at the initiative know Van Den Bosch forced cultivation system put in place. The goal is to produce a variety of existing commodity demand in the world market. Though the system is very detrimental to the people of Indonesia because it is draining and sweat them. The system is required for the community to plant and sell the results to the government and are paid according to the price set by the government's. However, on the negative side there is also a positive side that is able to recognize the people of Indonesia to plant procedures.

In 1942 to 1945 the Japanese occupied Indonesia. Occurs massive overhaul in the structure of the Japanese economy during the reign. At the time of a disaster notch Japanese food shortages and sharp slump public welfare. In addition to the export and import jammed, so in addition to the scarcity of long-scarcity also textiles. Because textiles are obtained from another country imports to Indonesia. Though initially Japan is a new hope for the Indonesian economy, but the fact remains rampant poverty and ignorance.

Indonesian Economy in the Age Before Independence

A. Post Independence Period (1945-1950)

            Indonesia's economy is very bad at this time , it is because :

1 . Inflation

            Inflation is due to the presence of more than one currency circulating in the community that are not controlled . At that time , the government said that in Indonesia there are 3 currencies , ie currencies De Javasche Bank , the Indian government Belada currency , and the Japanese occupation currency . October 1946 , the Indonesian government also issued the new paper , the ORI ( Oeng Republic of Indonesia ) as a substitute for the Japanese . whereas based on monetary theory , the amount of money in circulation can affect kenikan price level .

2 . Existence of economic blockade by the Netherlands since November 1945 to close the door Indonesian foreign trade .

3 . Treasury empty

4 . The massive exploitation during the colonial period

B. Future of Liberal Democeacy (1950-1957)

In this period of economic systems using liberal principles . Submitted on the appropriate market economy theories of classical school of laissez-faire laissez passer states . Though still weak and indigenous entrepreneurs can not compete with non-indigenous entrepreneurs , especially the Chinese businessmen . it resulted in a worsening of the economic system of the indigenous Indonesian businessmen due to the less competitive than non-indigenous entrepreneurs . Though at that time was the newly independent Indonesia .

      Efforts are being made to address the economic problems . Among other things :

a) Scissors Syariffudin , which cuts the value of money ( sanering ) March 20, 1950 .

b ) Program Fortress ( Natsir cabinet ) , which is an effort to foster and encourage indigenous wiraswasrawan national importers in order to compete with foreign companies

c ) Nationalization De Javasche Bank to Bank Indonesia on December 15, 1951 through Act no.24 of 1951 to function as the central bank and the bank circulation .

d ) Economic System Ali - Baba ( Ali cabinet Sastroamijoyo I) is raising penusaha cooperation between china and indigenous entrepreneurs .

e ) Cancellation of unilateral upper - acyl KMB results , including the dissolution of the Netherlands-Indonesian Union .

C. Guided Democracy (1959-1967)

            At this time the system running the guided democracy Indonesian and Indonesian economic structure lead to etatisme system that controls the economic system in which the role of government is completely dominant . In the economic system of the government which is solely responsible to the state of the economy . The Government also took several decisions but these decisions have not been able to improve the state of the Indonesian economy . The decisions taken by the government , among others :

1 . Devaluation announced on August 25, 1959 lowers the value of money as follows : Currency bill of Rp 500 to Rp 50 , Rp 1,000 bills to Rp 100 , and all bank deposits in excess of 25,000 frozen .

2 . Formation Declaration Economics ( Economic Declaration ) to reach the stage of socialist economy by means of guided Indonesia .

3 . Devaluation is done on December 13, 1965 to make the money worth Rp 1,000 to Rp 1 .

The decisions taken by the government also can not fix the economic situation in Indonesia . Such devaluation conducted on December 13, 1965 , decision by the government to suppress the inflation rate actually leads to an increased rate of inflation . Failures in monetary action is exacerbated because the government does not save money - spending. The selection of guided democracy system this could mean that Indonsia oriented to the East ( socialist ) both in politic , economy , and other fields .

D. During the New Order 

The new order is the designation of Presidential reign of Suharto . At the beginning of the new order , stabilitsi economic and political stabilization is a top priority . Business -oriented government programs to control inflation , the country's financial rescue nd securing the basic needs of the people . Inflation control is absolutely necessary , because in 1966 the inflation rate of approximately 650 % per year . Government in the new order seeks to reduce inflation and stabilize prices .

            In the new order , the government chose a mixed economic system within the framework of the economic system of Pancasila democracy . Mixed economic system is one of the paktek of Keynes's theory of government intervention in the economy is limited . This mixed system of government and the private sector cooperate and interact to solve problems . Governments participating in economic transactions . Government policies ranging oriented Keynesian theories . Economic policies geared towards development in all fields , reflected in the 8 lane equalization : basic needs , education and health , the division of revenue . Employment opportunities , kesemptan tried , the participation of women and young people , the spread of development , and justice .

            Along with the development of the Indonesian economy also occurred corruption , collusion and nepotism . In addition , development in Indonesia only prioritizes economic growth without a commensurate political and social life is fair . In addition , Indonesia also experienced a crisis which is a result of the global economy . Prices rise , the value of the rupiah weakened greatly and the onset of turmoil in all fields .

E. Order Reform

Presidential administration B.J. Habibie, who started the reform period has not given a good enough change in the economic field . Kebjakan - policy priority for political stability control . During the leadership of president Abdurrahman Wahidbelum no significant action to menyelamatkam state of deterioration , while many of the issues that must be faced by the new order that is the problem of corruption , economic recovery , the performance of SOEs , inflation control , and maintain the exchange rate . Due presidential scandal which dropped its credibility in the eyes of society eventually replaced by the president's position .

Future Leadership Megawati

The problems are urgent to be broken is the economic recovery and the rule of law . Policies adopted to address the economic problems , among others :

1 . Asking delay debt payments of U.S. $ 5.8 billion in Paris Club pertemun 3rd and allocate foreign debt amounting to Rp 116.3 trillion .

2 . Kebjakan privatization . Privatization is selling state enterprises in the period of crisis in order to protect the State from intervening perushaaan political forces and reduce the burden on the State . Proceeds successfully raised Indonesia's economic growth to 4.1 % . However , this kenijakan sparked a lot of controversy , because the SOEs are privatized sold to foreign companies .

At this time also the establishment of the KPK ( Corruption Eradication Commission ) . In practice the Commission has not provided evidence that the concrete in the fight against corruption . Though corruption is very disturbing course of national development and many investors are hesitant to invest in Indonesia because of this problem .

 Future Leadership Yudhoyono to Date

            During the leadership of SBY , he has made ​​a controversial policy that with rising fuel prices , this is due to rising world oil prices . The fuel price hike is done to increase the State's revenue . Kebiajakan to raise fuel prices do to save the Indonesian national opinion . The policy is to be included with the release of the government's policy to provide a BLT ( direct cash assistance ) to the poor and low-income communities . However , BLT is not run smoothly because it does not get into the hands of the entitled and cause social problems .

Little by little the president also began to eradicate corruption , because corruption is detrimental to the State and also take people's rights . It is very a positive response from the public . In the president's handling of the corruption issue does not stake feather anyone who does whatever his rank corruption and who engaged in corruption will be prosecuted under applicable laws .

Indonesia's economy is arguably adopts a liberal / capitalist . It can be seen as the government frees people to move , including in economic activity . However , at the end of the pemodallah which holds an important power in the economic activity , so that the rich get richer while the poor become poorer . This economic system has not been able to make people feel prosperous .

Given the problems in Indonesia's economy is expected to be more sensitive to the government to solve this problem so that people can live in prosperity semuany . In addition , the increasingly widespread problem of corruption that occurred that could destroy the country can be addressed. As well as those taking state money , the money should be only be used to provide assistance to people who are unable , because of the distribution of welfare of the people as it could happen .

B. Indonesian Economic Paradigm

Indonesian economic development in accordance with Pancasila , glowing on the moral values ​​that exist in the Pancasila . In particular , the economic system must be based on the divinity of morality ( sila I Pancasila ) and humanity ( II sila Pancasila ) . The basic economic system and humanistic morality will produce a humane economic system . Economic system paradigm on Pancasila will produce an advanced economy due respect human nature , both as individual beings , social , personal beings and creatures of God .

The economic system should be developed into a system and economic pengembanga aimed at the welfare of society . Economic development is based on Pancasila economic system berasaskan family . Economic development is expected to avoid other forms of free competition , monopoly and other forms that means there is someone else suffer . The development of the economic system can not be separated from human moral values ​​.

C. Economic Development According to Rostow

According to Rostow 's economic development or the process of transformation of a traditional society into a modern society is a multidimensional process . Development does not mean just change the economic structure of a country but also addressed by the role of the agricultural sector and the industrial sector .

The process of economic development by W.W. Rostow divided into 5 namely :

1 . Society Traditional

The economic system is dominated by traditional agricultural societies . Productivity . human labor is lower than the next growth stage . These communities are characterized hierarchical structure so that vertical social mobility and low . Traditional societies have not mastered the science in depth 'knowledge of their harena saai still believe that beyond the power of human or supernatural beings . Traditional societies tend to be static because it is difficult to accept new things , other than that resulting production tend to their own consumption . Usually parents and children have the same job and equal , there is no progress .

The characteristics of traditional society :

1 . Limited production functions , primitive mode of production and low levels of productivity msyarakat

2 . Hierarchical social structure , ie the position of the people are no different from their ancestors .

3 . Politics and government activities in these areas are in tanga landlords .

2 . Pre - Conditions Shelf Lives

This stage is defined as a transition period where people prepare themselves to achieve growth on their own strength . According to Rostow , at this stage and subsequent economic growth will happen automatically . During this phase of the investment is higher and it started a dynamic development . A prerequisite for the pre - takeoff conditions is yangf industrial revolution took place in the last century .

            According to Rostow's economic development is a process that causes the change of the characteristics of a society pentign , misalknya changes in state political system , social structure , value system in society and economic structure . A society that has reached such a growth process in nature , where economic growth is often the case , be considered already at the stage of pre- takeoff conditions .

Progress in agriculture , mining , and infrastructure must occur together with an increase in the investment process . Economic development is only possible by an increase in productivity in the agricultural sector and development in the mining sector . Progress in the agricultural sector has an important role in the transition before reaching the take-off stage . Role pertaian sector between lian , agricultural advances ensure the provision of food for the population in both rural and urban . This ensures that residents do not starve and save foreign exchange expenditures in order not to import rice . The increase in productivity in the agricultural sector will expand the market of consumer goods industries , as well as increase revenue so that workers can have savings .

3 . Staying Shelf

This stage is characterized by dynamic economic growth . The main Characteristics of economic growth is sustainable growth of the non- needed encouragement from the outside . At this stage it has eliminated the obstacles that hinder economic growth , as well as savings and investment are effectively increased by 5 % to 10 % of national income . Industries began to grow very rapidly as huge profits invested in new industries .

At this early stage of the drastic changes in society such as political revolution , the creation of rapid advances in innovation , or the opening of a new market . As a result of these changes on a regular basis will create innovation and increased investment . Higher investment will accelerate the rate of growth of national income and exceed the growth rate peonduduk , sehinggal p0endapatan rate per capita increases.

3 traits Rostow argued that the state has reached the stage of take-off to find out whether the country has reached the take-off period or not :

1 . Applicability of the increase in productive investment of 5 % or less to 10 % of Net National Product or NNP .

2 . Applicability development of one or several industrial sectors with a high rate of progression .

3 . Presence or immediate creation of a basic ramgka political , social , and institutional development of the sector could create a modern and economic externalities can lead to economic growth continues to occur .

4 . Towards maturity

Stage towards maturity comes after the country off from the time off . At this stage began to emerge of new technologies in the industrial sector . This shows that the more advanced the state of the economy and economic development goes well . This stage usually occurs approximately 60 years after leaving the takeoff period .

5 . Consumption Era High

This stage is the last stage of the Five merupaka stage according to Rostow's model of economic development . At this stage most people are prosperous life . Public attention focused on consumption and welfare is not a problem of production . In addition , investments to increase production is no longer a primary goal .

D. Repelita

First Five-Year Plan (1969-1974)

Repelita I aim to meet basic needs and infrastructure with an emphasis on agriculture . The government has developed programs to realize the first Five-Year Plan , namely :

1 . Providing quality seeds to farmers and conduct experiments to produce pest-resistant seeds .

2 . Improving the infrastructure used by the agricultural sector .

3 . Doing transmigration that land in Kalimantan , Sulawesi , Maluku and Papua can be processed in order to be land that generates for the economy .

This Repelita emphasis on agriculture because most of the population live in rural Indonesia eyed a search in agriculture , besides Indonesia also includes the state Agriculture . This means that the largest source of income is derived from agriculture . With an emphasis on the agricultural sector also promote rural income society .

Second Five-Year Plan (1974-1979)

The target is economic growth of 7.5 % per year . The main priority is the agricultural sector which is the basis to meet domestic food needs and is the basis for the growth of industries that process raw materials into raw materials .

Third Five-Year Plan (1979-1984)

The economic growth experienced during the second five year plan is very high but it is lower than that of 7.5 % ditargertkan t . However , it is the perceived lack of balance between the economic development of towns and villages as well as to . During the five year plan is expected to be uneven economic development . In merealisasiakan that purpose made ​​eight lanes equalization policy which in essence is :

1 . Equitable people's basic needs , especially food , clothing and shelter .

2 . Equal access to education , health care .

3 . Equitable division of revenue .

4 . Equitable expansion of employment opportunities

5 . Equity business

6 . Equal opportunity berpartisispasi

7 . Equitable development of inter-regional

8 . Equal opportunity to obtain justice .

Economic growth this year is inhibited by the world recession has not ended . At the end of the year in the third Five-Year Plan Indonesia 's balance of payments worsened it because the oil price decreases. At the end of the third five year plan to strengthen the value of the dollar , the value of U.S. real interest rates rose , exacerbating forest burden developing countries .

IV Five-Year Plan (1984-1989)

In the fourth five year plan is more for enhancement efforts for the welfare of labor , expanding employment , mertioratakan pendapatan.Prioritas on Five-Year Plan aims to strengthen food self-sufficiency and improve the industry that can generate its own industrial machines . In 1984 Indonesia will not import rice , so that the previous foreign exchange used to import rice can be used for development .

V Five-Year Plan (1989-1994)

Five-Year Plan aims to improve the standard of living kesejahterakan , wit and intelligence and well-being of all people more equitably and fairly. In addition , laying a solid foundation for the next stage pemangunan . The Five-Year Plan priorities are focused on the economy on agriculture and industry