"The government, while drawing up the draft state budget, only tries to project a high figure without paying attention to the gap between the high- and the low-income people," said Enny Sri Hartati, the director of Indef.Jakarta (ANTARA News) - A high economic growth of 6.8 percent, set as a target in the 2013 draft state budget, will not necessarily make the common people in Indonesia more prosperous, according to an economic analyst.
"The government, while drawing up the draft state budget, only tries to project a high figure without paying attention to the gap between the high- and the low-income people," said Enny Sri Hartati, the director of the Institute for Development of Economics and Finance (Indef), here on Friday.
"The gap has widened because only the capital-intensive and non-tradable sectors have seen growth. Only the owners of capital reap the benefits of such growth," she added.
"Capital owners only account for 20 percent of the population," Enny pointed out.
She noted that the number of people in the middle-income group was not too large, while the lowest income bracket accounted for about 40 percent of the nation`s population.
"The highest level, which constitutes only a fifth of our total population, enjoys 48 percent of the national gross domestic product, while the middle-income and low-income groups enjoy a small share of the pie," Enny stated.
"In essence, high economic growth and high investment are of no use if they do not make the common people more prosperous. Moreover, the benefits of Indonesia`s high economic growth are mostly enjoyed by foreigners," she said.
"The growth in formal sector does not represent the economic development of the entire nation," Enny pointed out, adding that a majority of the people in the country were employed in the informal sector and were unlikely to gain from Indonesia`s high economic growth.
"That is the problem. Therefore, Indef is thinking of how to redefine Indonesia`s economic development," she explained.(*)
Editor: Heru Purwanto
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