ECONOMIC DEVELOPMENT OF INDONESIA TO THE GOVERNMENT UNTIL NOW SOEKARNO

ECONOMIC DEVELOPMENT OF INDONESIA TO THE GOVERNMENT UNTIL NOW SOEKARNO

 Indonesia's Economy In The SoekarnoIn the era of guided democracy , President Soekarno run Guided Economy system . In this economic system , the president is directly involved and regulate the economy . All economic activities concentrated in the central government . As a result , economic activity in the area to be disrupted and declining . In the era of guided economy Idonesia repeatedly changed its economic design with every passing incumbent cabinet .
As with other developing countries newly telepas from colonial rule , economic policies in Indonesia in the early 1950s was largely shaped by the interplay of social problems and economic objective which exposes the state and the basic economic ideas of the the main economic policy-makers . Faced with heavy duty reconcile the urgent need to rehabilitate the devastated economy is widely during the Japanese population and the revolution , with a strong public demand for change to the national economy of the colonial economy . When the Indonesian government adheres menumpuh guided economic policy inward ' ( Inward - loking police ) . This policy is characterized by wisdom " Self-Reliance" ( standing on its own feet ) , and the wisdom that is very limiting , and then refuses completely foreign investment .During this period many foreign trade controlled by the Indonesian government , either as a short-term considerations of the balance of payments ( by limiting imports to reduce the current account deficit ) as well as non - economic considerations , is consideration of economic nationalism firmly resume ' pattern of economic prewar colonial ' ( preware colonial pattern) are very self pda export sector of primary commodities . Because of this there is a great aspiration among Indonesian national leaders to encourage industrialization as the way the best way to expand the economic base Indonesia at that time depends on the agricultural sector .Although the government does not bersabahat the western capitalist countries , but government policy that carries the slogan Berdikari it continues to rely on foreign aid , including aid western countries . Government policy can not be said as a policy oriented to the pure ( pure inward - loking policies) . Foreign aid was used to finance the import substitution projects planned by the Indonesian government . Indonesia became anti western countries but turned to other socialist countries in Eastern Europe and the RCC to obtain foreign aid , to buy war equipment .
The Indonesian policy-makers take steps to at least accommodate demand - demand urgent economic nationalism . In accordance with the agreement Indonesia - Netherlands agreed at the Round Table Conference in Deen Hag , 1949, the interests of the Dutch economy continues to receive assurance from Indonesia , following the recognition of the independence of Indonesia . faced with a situation like this , Indonesia makes the formulation of wisdom in order to take the steps necessary to take the important parts of the economy under national ownership and control . The task facing the new government in 1950 was to stabilize and develop the economy dominated by foreigners and has largely by the private sector . In 1952 it is estimated that 50 % of all imported consumer products is still dominated by four large Dutch companies , and 60 percent of exports by eight companies ( Van Zaden 2012:296 ) . In addition , private banks largely in the hands of seven foreign banks , three of which are owned by the Dutch .
Natsir Cabinet led Masjumi Party is dedicated to changing this situation . This cabinet dapuk power grab when something called boom Korean ( Korean Boom ) is the strongest blows . The Korean War led to the emergence of increased export demand which makes a new source of revenue for the Indonesian government . surplus obtained is entirely a result of high export earnings , directly through export customs and indirectly through the effect of increased revenues from income tax and import duties . Thus , the surplus was the result of a foreign shock does not come from fiscal policy has been formulated . In such a situation the cabinet has reacted with liberalized imports as a way to keep domestic prices remain low , increasing the kosumsi standards , and encourage the development of companies sons of the earth . At times the surplus Indonesia is able to obtain a surplus reached 1.7 trillion . This surplus does not last long. Indonesia back in 1952 budget deficit reached 3 trillion .
To develop indigenous Indonesian entrepreneurship and economic activity vital put under the control of the national government in 1950 introduced a program aimed at giving the castle an import license for certain commodities commodity only to Indonesian citizens . These programs lead to large -scale corruption and political practices seriously messed kaena each party tries to obtain the results and only slightly efektik encourage entrepreneurial growth . Many Indonesian businessmen who sell licenses to importers and Belada Chinese , and Indonesian businessmen pretending only appear on the face of business . The same group commonly called the company's " Ali Baba " .The volume of export commodities premiere Indonesia experienced considerable growth in the early 1950s , exceeding even the volume level that has been achieved in the late 1930s , Indonesia hardly participate daam expansion of world trade that has occurred during the 1950s and 1960s 's. Even during the period 1953-1966 the volume of Indonesian exports only grew by an average of one percent in one year . The decline of the role of foreign trade during the early 1950s were mainly due to production equipment industries Indonesia's exports have suffered a lot of damage . This is a result of the efforts the president Sukarno, who did not want in aid by Western countries .The new countries such as Indonesia faced major problems in the maintenance of the infrastructure , it takes more new investment , while ambitious in terms of education , health care , and other welfare reform programs . The only item in anggran that allows to prune is in military spending . Like the other newly independent states after a struggle for independence , increased military spending in extraordinary , but the atmosphere became calm again certainly possible to reduce pembiyayaan militer.hal operation was conducted during the year 1951-1955 , and then after that there peningkatak back . Remedy policies raise back the military budget does not make palemen and ruling political party became very popular among the military , and the tension between them and the established political groups are often triggered by Sukarno .
In the implementation of the Guided Economy change only happens in big cities so many engakibatkan urbanization occurs . The cities became very congested areas while pingggiran be deserted . The system is made ​​by the government to regulate foreign trade was made in the early 1950s and high import tariffs . With the new policies , making major exports activity derived from a case suburb Sumatra , Borneo , and other islands beyond who have income such as oil , rubber , copra , tin , tobacco , all of which became stuck on . It is caused by this situation is rampant black market trading to . Moreover, singapore distance with very close making it easier traders smuggle their products out of Indonesia and returned to the illegal importation of consumer goods . With mejual their products overseas traders get 20 times the price of goods sold than in Jakarta .Although from a political standpoint Indonesia Sukarno managed to keep stay united , " Guided Democracy " and the principles that guided the accompanying Economic bring Indonesia in one of the most dramatic economic crisis in history .
          
      In The economy of the Old Order
      On August 17, 1945 after Indonesia proclaimed its independence . Setlah it , especially in the first years after independence , Indonesia's economic situation is very bad ; national economy may be said to experience stagflation . Balance of the balance of payments deficit and the government 's financial deficit is very large ; production activities in the agricultural sector and the manufacturing industry closed down ; inflation rate is very high , reaching more than 500 % by the end of the old order . All of this is caused by various factors , including the important Japanese occupation , World War II , the Revolutionary War , and Macroeconomic Management is very ugly .

      It can be said that Indoneisa have experienced a very democratic political system , ie in the period 1949-1956 . However , history shows that the Indonesian political system of democracy is apparently causing the destruction of the political and the national economy . Due to too many political parties and all want power , often political conflict between the parties . The prolonged political conflict that does not give the slightest opportunity to establish a solid cabinet that can last up to the next general election . At the time of democratic politics , it is recorded in history that the average age of each cabinet is only about 2 years. During the 1950s Indonesia's economic structure still relic of colonization .

      Formal / modern , such as mining , distribution , transport, banking , and agriculture komersi , which has a contribution greater than the informal sector lebis / traditional to national output or gross domestic product ( GDP ) is dominated by foreign firms are relatively more capital -intensive than economic activities are dominated by indigenous entrepreneurs located in the city and big cities , such as Jakarta and Surabaya .

      Economic situation in Indonesia , especially after the nationalization of all foreign companies in the country , including the Dutch-owned agency, to worse economic conditions than the Dutch colonial period , coupled with an increase in the rate of inflation that is very high in the 1950s . During the Dutch Indonesian governance have economic growth rate is quite good with a very low inflation rate and stable , mainly due to the level of wages and other components of the cost of production is also low , efeisensi high levels in the agricultural sector , and the value of currency stable .

      In addition to the political situation in the country that does not support , poor Indonesian economy during the reign of the old order is also caused by a lack of production factors , such as those with levels of entrepreneurial and management capabilities are high , labor education / high skill , funds ( particularly to build the infrastructure that is needed by the industry ) , technology , and the ability of the government to formulate a plan and a good development strategy . According to Higgins observations , since the first cabinet formed after independence , the Indonesian government gave first priority to the stabilization and economic growth , industrial development , unfikasi , and reconstruction . However , due to the limitations of the above factors and compounded by national political turmoil at the time , eventually building or even Indonesia's economic reconstruction after the war was never implemented properly .


Indonesia's Economy In The New OrderInflation in 1966 reached 650 % , and the budget deficit is greater than the entire amount of revenue. The balance of payments with foreign large deficit , the exchange rate is not stable " ( Gilarso , 1986:221 ) a brief description of how the destruction of the economy at that time to be built up again by the new order , or also can be said as a turning point .The beginning of the new order receives the brunt of the poor economy of the old order . Year 1966-1968 was a year of economic rehabilitation . New Order Government trying hard to bring down inflation and stabilize prices . With controlled inflation , political stability is achieved ayng effect on foreign aid began to be guaranteed by the IGGI . So since 1969 , Indonesia could start up a draft development called Five-Year Development Plan ( Repelita ) . Here's a brief explanation of some Repelita :
Repelita I (1967-1974)Came into force on April 1, 1969. Objectives are economic growth of 5% per year with the preferred target is enough food , enough clothing , especially infrastructure improvements to support agriculture . Surely it would be followed by the expansion of employment and improvement of people's welfare .
REPALITA II (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 .
REPALITA III (1979-1984)Tetaap priority on economic development focused on the agricultural sector towards self-sufficiency , as well as increased industrial process raw materials into finished material .
REPALITA IV (1984-1989)Is an increase of Repelita III . Increased efforts to improve people's welfare , encouraging a more equitable distribution of income and equitable , expand employment opportunities . Priorotasnya effort to continue stabilizing food self-sufficiency and improve the industry that can generate its own industrial machines . If the conclusions drawn by the economic development Repelita is referring to the agricultural sector towards self-sufficiency which followed the gradual growth of the industry .


In The Reformation Era economyIn times of economic crisis , marked by the fall of the New Order administration was followed by the era of reforms initiated by the government of President Habibie . At this time it is not only constitutional change , but also economic policy . So what has been a steady run for 32 years , was forced to undergo changes in order to adjust to the situation .
1 . Period B.J. Leadership HabibieAt the beginning of the reform , the general public and among entrepreneurs and investors , including foreign investors , put great expectations on the ability and sincerity of the government to revive the national economy and resolve all existing problems in the domestic legacy of the New Order regime , such as corruption , collusion and nepotism ( CCN ) ; rule of law ; human rights ( Human Rights ) ; Trisakti and Semanggi I and II ; the role of armed forces in politics ; disintegration problems ; and others .Habibie's government period was marked by the start of cooperation with the International Monetary Fund to help in the economic recovery process . In addition , Habibie also loosen control on the media and freedom of expression .In the economic field , he managed to cut the value of the rupiah against the dollar is still ranged between Rp 10,000 - Rp 15,000 . But at the end of his reign , especially after the Assembly denied responsibility , meteoric rise in the rupiah at Rp 6500 per U.S. dollar value will never be reached again in the next era . In addition , he also started applying the independence of Bank Indonesia 's economy to be more focused care . To resolve the financial crisis and economic recovery of Indonesia, BJ Habibie perform the following steps :

    Restructuring and banking recapitulation through the establishment of IBRA ( IBRA ) and a unit of the State Assets Management
    Liquidate some troubled banks
    Raising the value of the rupiah against the dollar to below Rp . 10,000.00
    Form the monitoring agency and the foreign debt problem resolution
    Implement economic reforms required by the IMF
    Passed Law . 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Competition
    Passed Law . 8 of 1999 on Consumer Protection
Presidential administration B.J. Habibie, who started the reform period has not maneuvering sharp enough in the economic field . Preferred policies to control political stability .
2 . Period K.H. Leadership Abdurrahman Wahid ( Gus Dur )In economic terms , compared to previous years , in 1999 the Indonesian economy began to show an improvement . GDP growth rate ranging positive, although not far from 0 % in 2000 and the process of recovery of the Indonesian economy is much better with a growth rate of nearly 5 % . In addition to GDP growth , inflation and interest rate ( SBI ) is also low which reflects that the monetary conditions in the country has stabilized .However , the peace of the community after the election of the fourth Indonesian President did not last long . The President began to show attitude and issued a controversial utterances that confuse business people . President tends to be dictatorial and corrupt practices in the environment has intensified , rather than diminishing , which is one goal of the reform movement . This means that although the name of government reform , but still no different premises New Order regime . The presidential attitude also caused a feud with the House of Representatives ( DPR ) which climaxed dikelurakannya official warning to the President through Memorandum I and II . With the issuance of Memorandum II , the President threatened deposed if the proposed acceleration Istomewa Assembly session be conducted in August 2001 .
During the reign of the reform , practically none of the problems in the country that can be resolved properly . Various shades of social unrest and disintegration sara continue, such as rebellion in Aceh , Maluku conflict , and ethnic conflicts in Central Kalimantan . Not to mention the workers' demonstrations intensified reflecting their increasingly disgruntled response to economic conditions in the country , as well as greater political elite infighting .
In addition, the Indonesian government relations under the leadership of Abdurrahman Wahid and the IMF is also not good , mainly due to problems amendment of Law no. 23 of 1999 concerning Bank Indonesia ; implementation of regional autonomy , particularly regarding freedom of the area to borrow money from abroad ; and revision of the 2001 budget that continues pending implementation. Not lead to the completion of the revised IMF disbursement delay aid to the Indonesian government , while the national economy is currently heavily dependent on the assistance of the IMF . In addition , Indonesia threatened declared bankrupt by the Paris Club ( donor countries ) because it seems clear that the Indonesian economy worsening conditions and the government 's financial deficit continues to swell , might not be able to pay back its debt largely maturing in 2002 coming . In fact , the World Bank had also threatened to halt new loans if the IMF agreement with the Indonesian government stalled .
Political and social instability are not getting receded during the Wahid government raised the level of country risk in Indonesia. Coupled with the deteriorating relationship between the Indonesian government and the IMF . This makes business people , including foreign investors , be reluctant to do business or invest in Indonesia . As a result , the condition of the national economy during the reign of reform tend to be worse than the current transitional government . In fact , the international rating agency Moody 's Investors Service confirmed the aggravation of the Indonesian country risk . Although some macroeconomic indicators have improved , but due to concerns of political and social conditions , the other rating agencies ( such as Standard & Poor's ) lowered the long -term prospects of Indonesia from stable to negative .
If this condition continues, it's possible the 2002 Indonesian economy will grow much smaller than previous years , even negative returns . The government did not demonstrate a genuine desire (political will ) to resolve the economic crisis to its conclusion with the principle once and for all . Governments tend to simplify the current economic crisis with regard the problem is confined to the amendment of the agenda issues of Bank Indonesia , fiscal decentralization , debt restructuring , and divestiture BCA and Bank Niaga . The emergence of various government policies and inkonsistens controversial , including the imposition of import duties on luxury cars G - 15 summit activities that only 5 % ( nominal 75 % ) and tax exemption on foreign loans and grants , indicating the absence of a sense of crisis to the real conditions current state of the economy .
The phenomenon of increasing complexity of economic problems shown by some economic indicators . Movement Composite Stock Price Index ( CSPI ) between March 30, 2000 until March 8, 2001 shows a negative growth trend . In other words , during the period of JCI slumped by more than 300 points, which is caused by more than the amount of sales activity in the purchase of stock trading activities in the country . This reflects the growing disbelief businesses and communities to the Indonesian economy , at least for the short term period .
III . CONCLUSIONThe Indonesian economy since the days of the old order of government until the reforms are still experiencing some turbulence . The Indonesian economy is still ups and downs . It can be seen from the poverty that still exists , the high level of unemployment because the number of jobs available is not proportional to the total labor force , the rise of the corrupt because the law in this country is equivocal ( Indonesia is the 5th largest in the world 's most corrupt country ) , is still a gap economy among the poor and the rich , the rupiah is still around Rp 9,000 to Rp 10,000 , and still has debts to foreign countries .