State budget should encourage prosperity among Indonesian people

State budget should encourage prosperity among Indonesian people

An economic observer at the Institute for Development of Economics and Finance (Indef) Enny Sri Hartati (Indra Arief Pribadi)

Jakarta (ANTARA) - An economic observer at the Institute for Development of Economics and Finance (Indef), Enny Sri Hartati, said that the State Budget could actually encourage prosperity among the people of Indonesia.

"So far, the state budget has not been able to optimally reduce the level of poverty, inequality, and unemployment in the community. We can look at the indicators of public welfare," Enny Sri Hartati said when contacted in Jakarta on Monday.

Unemployment and poverty rates have declined year on year, but at a very slow pace compared to other countries, she said.

Based on data from the Central Statistics Agency (BPS), Indonesia's poor population as of March 2019 amounted to 25.14 million people, a decline of around 810,000 residents compared to the same period in 2018, or 9.41 percent, and a decline of 9.82 percent over the previous year.

The Open Unemployment Rate, a comparison between the number of unemployed people and the total workforce in Indonesia, as of February 2019 was 5.01 percent.

However, the Open Unemployment Rate is the second highest among the ASEAN countries, with the Philippines ranking first with an unemployment rate of 5.1 percent as of June 2019. Malaysia is at 3.3 percent and Vietnam is at 2.16 percent.

"The international standard of poverty is around US$2 per day. We are Rp.400,000 per month, which means there is not even one dollar per day. But if we want to be honest with the poverty line of Rp.400,000 per month, it is only enough to meet the food expenses, "she said.

In addition, Enny said that the ratio of inequality in income had declined, but it was slow as it was still 0.38 percent, and there were still regional disparities, namely between villages and cities in terms of productive access such as land tenure and capital control.

"This is only one percent of people who have access to capital. Even one percent of Indonesians have mastered around 59 GDP, in terms of capital," she remarked.

She went on to say that the quality of development also decreased because it did not increase the production sector.

In the last five years, the production sector actually declined, for example, an investment in GDP which was originally around 34 percent is now at 32 percent due to deindustrialization.

"Trade and transportation services which are dominated by foreign players kill domestic players," she said.

Enny said the government should evaluate a decline in the quality of economic growth because the role of the state budget should be a stimulus.

"It should be a pillar and a driver so that the process of development and economic growth can improve the welfare of the community," she said. Related news: Revenues in 2020 state budget draft reach Rp2,221.5 trillion
Related news: 2020 State budget deficit to be Rp307.2 trillion


EDITED BY INE

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