Economic Transformation Through a Populist Paradigm

why popular economy needs to be used as a paradigm and a new strategy for Indonesia's economic development: a. Indonesian Characteristics Concepts and strategies for economic development that are successfully applied in one country will not necessarily be successful if implemented in another country. 

Harrod-Domar's growth theory, Rostow's growth theory, David Romer's growth theory, Solow's growth theory, were built from a society of economic actors different from the economic structure of Indonesian society. Every theory is always built with certain assumptions, which not all countries have assumed conditions. 

That is why, to build a strong, stable and just Indonesian economy, it cannot use existing generic theories. Indonesia must formulate its own concept of economic development that matches the political demands of the people, the demands of our constitution, and matches the objective conditions and subjective situations. b. Constitutional Demands The economic order that should be developed is not a monopolistic or monopsonistic or oligopolistic economic system. 

The economic system that is demanded by our constitution is an economic system that gives opportunities to all people or citizens to have assets in the national economy. National economic system is an economic system that clearly distinguishes which goods and services must be produced by the government and which goods and services must be produced by the private sector or the non-government sector. 

Regarding the form of economic institutions, although in the explanation of article 33 is interpreted as a form of cooperative, but of course it must adjust to the development of society and the environment. c. Empirical Facts From the monetary crisis that continued to the economic crisis and the fall of the rupiah against the dollar, it turned out that it did not paralyze the national economy. 

That due to the economic crisis, prices of basic necessities soared, inflation could hardly be controlled, exports declined (especially exports of manufactured products), imports of capital goods decreased, production of manufactured goods decreased, unemployment increased, it was true. But all of that turned out not to have a serious impact on the economy of the people whose source of income was not from selling labor. '

Businesses that are cultivated or owned by many people whose products do not use imported materials, hardly experience any significant shocks. Another fact, when zero percent investment, even capital depreciation occurred, it turns out that the Indonesian economy was able to grow 3.4 percent in 1999. This all proves that the Indonesian economy will be strong if economic actors are carried out by as many citizens as possible. d. Failure of Economic Development.

The economic development that we have carried out for more than 32 years, seen from one aspect indeed shows quite good results. Even though in that period, we faced two economic crises (namely the Pertamina debt crisis and the crisis due to falling oil prices), but the average national economic growth was still above 7 percent per year. The volume and value of oil and non-oil and gas exports also increased sharply. 

But in other aspects, we also have to admit, that the number of poor people is increasing, the income gap between population groups and between regions is widening, the number and ratio of debt to GDP has also increased sharply, and the transfer of ownership of economic assets from the people to a small group of citizens also increased. 

Although we have implemented various poverty alleviation programs, we have planned 8 equal distribution programs, but in reality they have not been able to solve these problems. 

Therefore, what we need right now is not actually a poverty alleviation program, but to reformulate a development strategy that is suitable for Indonesia. If the economic development strategy that we use is true, then in fact all development programs are at the same time a poverty reduction program.