By: Insukindro¹

In August, two dates turned out to be very important and interesting to the general public: the first, 17 August 2014.  It marked 69th anniversary of Indonesia’s proclamation of Independence, as well as  marked by the issuing of New Unitary Republic of Indonesia currency. Second, August 21 2014, marked the issuing of the decision by the constitutional court which in effect signaled approval and recognition of the newly elected President and Vice President (Joko Widodo and Jusuf Kala). The issuing of NKRI currency is not only a manifestation of the implementation of Act No.7/2011 on currency, but also marks an important change in the concept of money in Indonesia from Bank Indonesia currency to the NKRI currency (UNKRI).  Bank Indonesia currency (UBI) –which has served as a medium of exchange, medium of payment, and unit of measurement for a long time—BI legal tender, constitutes the obligation/liability of the monetary authority (BI) to society.  In other words, Bank Indonesia as merely an independent state institution, is vested with enormous authority. On the other hand,  the coming to the fore of NKRI (UNKRI) currency means that the monetary obligation has been shifted to  the state, the Unitary Republic of Indonesia (NKRI) represented by the government (Minister of Finance)and Bank Indonesia.  UNKRI is not only legal tender but also represents the existence of the state in all elements and sections of life and economic activities of society living in the Unitary Republic of Indonesia.  Indeed, the issuing of UNKRI may indicate a decrease in authority and an independence of Bank Indonesia after   the establishment of the financial services authority inflation target setting by the government (Insukindro, 2009).  However,  such a step is important and must be done to ensure that it is not only Bank Indonesia that has the knowledge about the cost and the quantity of currency that is  minted, but also the government and representatives of the general public in the national legislative assembly. In the future, it would be better if the quantity of NKRI currency that is minted and circulated is linked well to the government development plan as entailed in the national medium term development plan and the draft of national revenue and expenditure proposals. The last two issues mentioned, will definitely be reflected in the internal balance such as inflation, economic growth, employment opportunities, financial system stability, and external balance, such as balance of payments. Needless to say, realizing all the foregoing will require institution changes in the Bank Indonesia Act. read more

Muhammad Edhie PURNAWAN, PhD¹

What follows is my perspective and point of view pertaining to the title of this piece. The author will as much as possible avoid citations that abstract this writing from ideas that are espoused by the author and desist from padding that may obfuscate the original idea.  
Developing the Indonesian economy that exudes optimism, lies in concentration efforts on developing its human resources. I divide human resources into two aspects. First, hardworking ethos, which emphasizes efforts to maintain economic stability. By working hard, an individual is able to obtain sufficient income to fulfill needs and requirements, which in turn augurs well for economic stability at the aggregate level. Secondly, developing human resources by optimizing right side of the brain. This requires doing work with innovation, creativity and productivity leap. Personal development capacity, in general, has reached just 25%. This leaves 75% of personal development capacity, which is still in underutilized, hence can be tapped to enhance national productivity. This is why we have to take measures as much as we can to increase value added from human resources in order for the economy to attain growth rates that are above average.  
Why should the focus be on this aspect of human resources? This is because it is this resource which constitutes the center of gravity and lynch pin of the national economy. Endowed with hard working human resources, there is enhanced capacity to manage other factors of production such as capital, land, and technology in such a manner that increases value added. Contrariwise, under condition of weak human resources, value added from the three factors of production can be as fast.
Developing a leap in value added in human resources also means developing a competitive economy. This can be initiated by developing three types of strengths.  The first strength is honesty. The second strength is innovation/imagination, and the third strength is networks. Equipped with the three strengths, Indonesia will be able to achieve a competitive, high growth, and confident nation in facing advanced nations. The elucidation of the three strengths follows below.
First, the strength in honesty. This strength is the foundation of developing all kinds of human resources. Developing honesty strength will put the foundation of the economy on a sound footing, which will not be vulnerable to earthquake shocks, storm gusts, and other natural disasters. Thus, without honesty strength as its foundation, the structure of the economy, though seemingly splendid and invincible, will be susceptible to collapse with ease. To that end, there should never be an argument that espouses the notion that honesty can be delayed for honesty is the mother of all good deeds.
Secondly, innovation/imagination strength. Just imagine two phenomena below. The first is the event of South Korea’s phenomenon. Based on annals of history, this country has been able to achieve huge leap in value added thanks to emphasis the country has made on innovations in semiconductor technology.  The founding fathers of this country formulated a grand design for the semiconductor as the cornerstone of its industrial development. Today, we bear witness to the reality that semiconductor innovations have made achieved rapid advancement becoming the engine that supports the gargantuan telecommunications such as Samsung and LG and spectacular automotive industry such as Hyundai, Daewoo and Kia. The major secret that explains the success they have achieved lies their ability to acculturate huge leaps in technopreneur innovation strengths. The second is the Steve Jobs’ phenomenon. Equipped with USD 10 as cost of production, an iPhone is sold at USD 400 in US. What this means is that, innovation makes possible a leap in imagination that creates USD 390 in value added, and not sweating profusely. This type of intelligence can never be emulated by just collecting knowledge, rather fostered through the development of imaginative capabilities. An old adage of Einstein said that “imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.”
Upon achieving honesty and cementing that with innovation in making use of imagination capabilities, the third strength is network. Network strength is very crucial to economic development. Equipped with this strength, a nation is not only known or famous, but also becomes a good friend for many. To become a good friend, calls for good interpersonal skills. Inculcating pattern of thinking that appreciates others is the key pre condition for developing a wide network. History has over centuries proved that good relations among humankind have the ability to propel an individual and institution to higher levels of advancement. To that end, good networking is an absolute condition for making a huge leap in economic valued added. And always remember: there will never be a bird that flies for a long distance across national boundaries by only relying on its wings alone, without its friends.
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Based on my observation of the two presidential candidates in the forthcoming presidential elections (Prabowo vs Jokowi), my suggestion is that the two should focus and enthusiasm on efforts to increase human value added injected into the Indonesian economy. The way forward can begin through crafting a basic paradigm and concept, which can serve as foundation for making huge leap in value added, after which process the search for techniques and mechanisms to implementing thereof, and eventually contribute to accelerating the engine of Indonesian economy. Absence of paradigm and concept and visualization of how to achieve value added is rooted in the paucity of capable human resources in this nation. National leaders should not only become the father of central gravity, but must also have major ideas that can propel the economy forward through major leaps that creates solutions to problems that have for long hampered sustainable increase in value added by human resources. In light of that, the key to all gates of development lie in the country’s human resources and efforts that can foster a major leap in value added for Indonesian economy. read more