Tuesday, December 28, 2010
Sunday, December 26, 2010
So those are important issues, mostly on the economic side. Before I move into the politics, let me say a few more things. First, when we talk about poverty, it is important to look at the bigger picture. That is, we should not just address the income poverty - the poverty related to income and usually measured with the poverty line, be it the national line (anchored mostly to calorie intake, translated to consumption to about 1.55 dollar per day) or standard line (1.25 or 2 dollar per day). There are other dimensions to poverty that are non-income in their nature: access to sanitation and clean water, access to basic education and health, infant mortality rate, maternal health, etc. Reports have shown that in general, these "non-income" poverty dimensions are worse than income poverty. In addition the urban-rural wedges in these dimensions are also bigger than that in income poverty.
In addition to the importance of non-income poverty, we have long acknowledged the fact that the near-poor - those living between 1.55 and 2 dollar a day - are abundant. They are fragile to the change in poverty line. This, along with other reasons, calls for better social protection system. In conclusion, tackling the poverty issue in Indonesia can not afford not to frame it in its big picture. Indonesia's poor may be generalized into: rural, farm agriculture, informal, and to a lesser extent, Eastern. So any policy for poverty eradication should be directed towards these factors: easing the migration from rural to urban (or equivalently developing rural areas to become urbanized areas), migration from farm to non-farm agriculture, informal to formal, and focusing infrastructure development (and hence connectivity issue) in the Eastern part of Indonesia.
One more thing. We should not forget about the environment. The world is seeing a climate change. It will impact almost all dimensions. But most importantly, food security and energy security. As this will proportionally be more difficult to deal with in poor and developing countries, it is in our interest to do something about it. As one of the biggest carbon emitter, we have declare our commitment to cut our emission rate. But it is not just to make a show off. Cutting emission would be good for our own sake. It is part of the whole program to explicitly recognize the role of environment and natural resources in development (or, to borrow economists' jargon: to internalize the externalities). All this should be seen in a sustainable development paradigm (which, by the way, not just environment, but also social and economic facets). That is, to leave at least the same options for the next generation to choose from as we do now.
In this regards, it is important to underline here again that we have to change the way we consume energy. Our dependence non non-renewable energy is worrying. And that is because we have all the incentive wrong. We subsidize the unproductive use of non-renewable energy in a grand scale that hinders our ability to build infrastructure and to fight poverty. And of course, it also speeds up environmental degradation and resource depletion. As long as we keep this subsidy regime as it is now, there will be no incentive for business to invest in renewable energy nor for consumers to be more energy-conscious.
Now, the politics. While we're still at the subsidy issue, I would like to share with you that cutting the unproductive subsidy is also a politically sensitive issue. The DPR members have shown their reservation. I understand that they have valid reasons to be reluctant to this proposal, but we really should find a better way to allocate the limited budget into its productive uses. Speaking of budget, we will keep the discipline intact. This includes prosecuting tax criminals who have stolen the taxpayers money to enrich themselves.
Finally I'd like to address the issue on democracy and pluralism. Democracy has its weakness, no doubt. But our civilization has yet to see a better alternative to it. We will keep it while respecting our true, unique blessing: diversity - Bhinneka. It is saddening to see our fellow countrymen restrained from undergoing their religious rituals in peace. We will not tolerate such intrusion and attack from groups of thugs who hijack a certain religion to suppress the others.
Dear my fellow countrymen,
Those are the things we would focus on next year. At the same time we will continue our active role in international fora. We will assume leadership of ASEAN next year and APEC in 2013. We also continue our active engagement in the G20. As a part of modern global civilization, we will stand firmly in our support to fight global poverty, to undertake adaptation and mitigation of climate change, and to improve the world peace and harmony.
God bless you all, happy new year.
We soon will say goodbye to 2010 and hello to 2011. As the president, I'd like to make a little reflection on the foregoing year while also share my expectation of the year to come. We entered 2010 with a big expectation. In fact we survived the global financial crisis rather impressively, along with China and India. But that is no excuse to be working less. This year we have seen other - almost all, I should say - countries recovering very well. On the other hand, we also continued growing - but somewhat slower. It's not that we had not expected such growth rate. Given our current situation, it is still hard to achieve the potential rates as we did before the Asian financial crisis.
Which leads us to the question: what is really the constraint? I am aware that we still have numerous problems and issues on the table. But we should prioritize. If I were to pick up, say, the two most binding constraints to growth, that would be high logistic costs and very rigid labor market. The former deals a lot with infrastructure provision - both soft and hard infrastructure: so not only the roads, ports, and bridges but also the system and human resources thereof. As for the labor market, we have yet to settle a mutually benefiting labor law to employers and employees. As a result, businesses are reluctant to hire more workers on permanent basis while workers have few choices other than accepting unfavorable contract terms or else move to informal sector whose job security is minimal.
We have done many things regarding these two problems. But certainly not sufficient. Infrastructure development will continue to become the main theme. It involves among all, completing the trans-roads and the 10K megawatt electricity, improving the ports and their national single window system as well as refining the public-private partnership schemes. The latter is crucial as we know the government capacity to finance the needed infrastructure development is only 30 percent.
As for the labor market issue. I know this has always been very sensitive. We tried to make a revision in 2006 but it failed. Apparently we need to work harder together to resolve this issue. Otherwise, the labor movement between sectors (including formal-informal) and across regions (including urban-rural) will remain hindered. We also need to reduce barriers at the border. This includes negotiation with other countries on job safety for our migrant workers. In addition, we should be ready to anticipate foreign demand for our workers. Otherwise, we can not reap the opportunities out there: China's labor wage has increased and some companies therein have started to look for other countries to relocate. Japan is having a serious aging problem: their old yet rich population need young, productive workers that the country lacks. We have them.
Those are the two most important factors of our development at the moment. They are rather short term with regards to policy. Meaning, the approach to tackle them should be implemented as soon as possible in order to switch to the higher gear. That is to say, we also have long term problems that need structural - and continuing - solution or approach. In my view, it is and will always be human resource. While I am proud to see young Indonesians ace international competition, in general we still need to improve the quality of our people. That requires sustainable improvement in health and education.
One might ask, where is the poverty issue? Well it is in all of the above. Improving infrastructure will open more economic options to the poor in the remote areas. Making the labor market more flexible allows more hiring and many of those in informal sector can move to the formal one. Improving health and education is by default directed towards the poor as top priority.
Friday, December 24, 2010
If you care enough to look at it carefully, there has been a glint of intellectual dishonesty out of this kind of punditry. The obvious one is the habit of setting up a strawman. The less obvious one is to promote something deemed as "new" or "groundbreaking", whereas, in fact, the ideas have been around for years, if not decades, in particular discpline or profession.
Surely, branding something as "groundbreaking" always attracts ones who are not trained on the subject --thus the blame are not theirs. But those funny pundits are, supposedly, aware that the claim might not be as spectacular as it may sound.
Yet, for them, the incentive to commit in such dishonesty is indeed rather high. There are always gullible cheerleaders (and media) out there, eager to celebrate anything labeled as trendy, new, or revolutionary, under the pressure to appear, in our popular lingo, "eksis". Fame, for these faux pundits, is therefore imminent.
Now, in the free-market of ideas, where are the competing forces for such funny punditry? Those well-equipped with training or analytical rigor that can not be easily persuaded with snake-oil jargons and populism.
Here is the Catch-22: most of them are already very busy and occupied with their jobs in the universities, in private sector, and in public sector. They spent great deal of their time pursuing professional objectives -- perhaps, admittedly, for their own different definition of fame or power. In short: they lack of incentive to counter popular fame-inspired pundits in popular (social) media. For many of them the pay-off for engaging in many times repetitive debates doesn't add up with the time they need to allocate for properly analysing the issue.
Moreover, they are also not trained and used to engage in an exchange in which the opposite side are those with "palu gada" attitude (Read: "apa lu mau, gue ada"; or in plain English, the "anything-goes").
Do I believe in wisdom of the crowd then? Yes. Sooner or later, the crowd will know what/who is lemon and what's not. Think of Roy Suryo, if you want.
In the meantime, I believe many people with knowledge, in their limited spare time, look at such funny punditry with amusement (and, perhaps, as source of entertaining gossip over coffee or lunch).
Thursday, December 23, 2010
Now, you are a sportman. You always struggle to win. You did win and got an appreciation (be it trophy, money, etc.), so you deserved to play in a higher level. Do you expect more or less appreciation should you win? Yes, more. But where does the money to buy trophy come from? Assume, just assume, partly comes from the ticket sale. What is the implication? Yes, ticket price for final should be higher than that for semifinal.
Finally, you hear that the ticket price for the next game is lowered. Do you expect longer or shorter line at the ticket booth? Yes, longer. If you could afford the semi, would you be paying a premium for whoever promises you to stand in line on your behalf? I would. What is the implication? Black market. If black market is not possible, what would be the stadium look like? Crowded like hell, and possibly with some fights over seat here and there. You would need extra security forces. Which means extra cost.
All the three hypothetical scenarios above are, well, hypothetical. You could of course find them and the likes in any intro level economics.
The president, who ordered the football association to cut the price for final match is, by the way, an economist. He should've flunked his intro class.
Tuesday, December 14, 2010
Here's my suggestion. Don't touch Yogyakarta. Don't change anything. Change everything else, instead. That is, grant special status to each and every other province in the republic. Then, let the people decide if they want a king or a governor or whatever.
To borrow from Gus Dur, "gitu aja kok repot".
Tuesday, December 07, 2010
But, some politicians go too far. The chief of Democrat Party says wartegs have to be "nurtured and supervised". What the heck? Nurtured and supervised by whom? By the government? Parliament? You? Do you even think you're smarter than them the warteg sellers, so you should teach them how to make money? Do you realize that by issuing some regulation to "nurture and supervise" the wartegs you basically provide a room for yet another rent-seeking activity? Is tax not good enough?
Friday, December 03, 2010
I'm not sure. At first I thought this guy was something. But then even Assange seems to underestimate the power of price. His leaked infos are now decreasing in "price". Why? Because it's just way too many. Seriously, who wants to invest time digging on 250,000 cables? When he leaked a few classified info, people were taken by surprise. And people wanted more. The price increased.
Then, he flooded the market. Of course I don't have numbers. But I think the position is now an excess supply. Which means the price has gone down.
Too much information is close to worthless information. In such a situation one might not care anymore which one is classified and which mere gossip.
But he just made another homerun. With iPad, that is. I mean, hey, there's nothing wrong with him having and playing with an iPad. But a president, holding an uncased (or was it transparrent silicone?) iPad with the famous logo on camera, up close and personal? The only thing better than that is if he had a Coca Cola can on his other hand.
Clueless. Now suddenly my iPad's value has gone down a bit.
And contrary to what people say, I think his showing off his iPad live is not a free promotion for iPad or Apple. It is a good promotion for Samsung Galaxy.
Figure that out.