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Inspiring Economic Optimism to the Upcoming National Leader

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

Developments in Government Finances and Fiscal 2014:Q2

Developments of various macroeconomic indicators show marked deviation from assumptions which were used in formulating State Budget (APBN) 2014. This is indeed is the main reason that compelled the government to submit the Revised State Budget Plan (RAPBNP) 2014, as an attempt to ensure the implementation of APBN 2014. Without making necessary adjustments, there was big chance that government expenditure could have easily have gone beyond the maximum budgetary deficit limit of 3% of GDP, which is stipulated under the law. Moreover, it is highly likely that economic growth and lifting of oil and gas for the fiscal year will be far lower predictions, while government expenditure is projected to increase sharply as a direct consequence of rising energy subsidies and still unabated depreciation of rupiah. That said, it is worth noting that macroeconomic assumptions for the annual budget merely serve as guidance in formulating state budget, rather than fixed targets which the government must achieve.
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International 2014: Q2

Based on month-to-month trajectory, Indonesia’s trade balance moved from a surplus of USD 0.67 billion in March 2014 into a deficit of USD 1.96 billion in April 2014. The decline was due to a combination of factors that included contraction of exports by USD 0.9 billion and an increase in imports of USD 1.73 billion compared with the level in the previous month.  The total value of exports declined because of a contraction in both oil and gas as well as non-oil and gas exports.  Meanwhile, total value of imports increased, driven largely by imports of non-oil and gas commodities.  In general, Indonesia’strade balance posted a deficit of USD 0.89 billion during January-April 2014 period. That said, the deficit posted during January-April 2014 period, is smaller than USD 1.94 billion recorded during the same period in 2013. read more