ILUNI FEB UI Launches Book about Breakthroughs to Overcome Economic Slowdown
Delli Asterina~ FEB UI Public Relations Officer
Jakarta, 04/07/2020 The Alumni Association of the Faculty of Economics and Business, Universitas Indonesia (Iluni FEB UI), launched a book entitled Terobosan Menghadapi Perlambatan Ekonomi (Breakthroughs to Overcome Economic Slowdown) in a virtual event. The book is expected to serve as an economic policy reference.
The book was written by 12 FEB UI graduates, including Minister of Finance Sri Mulyani Indrawati, World Bank Managing Director Mari Elka Pangestu, UI Rector Prof. Ari Kuncoro, economist Faisal Basri and LPS Chief Executive Lana Soelistianingsih. The book covers several topics related to fiscal, monetary, poverty, inequality, investment and trade issues.
Sri Mulyani said in her remark that technocrats who graduated from the Faculty of Economics, UI, (which later became the Faculty of Economics and Business, UI – Ed) play a major role in Indonesia’s economic development, as revealed in the book.
In the book, the State Treasurer wrote about the challenges as a leader or policymaker in a rapidly changing environment. This calls for adjustments and new options. As policy manager, the scope of her responsibility is wide. She also has to deal with a very demanding society. She must be able to articulate a policy by considering and seeing it from the political, media, or activist point of view.
“As policymakers, we listen, but to determine the kind of policy to formulate, there are many things to deal with and consider. When we were at university, we felt we could explain, analyze and discuss various topics. But, as policymakers and as Minister of Finance, and especially in a Covid situation like today, we often don’t have the luxury of formulating policies in a peaceful atmosphere,” she explained.
In the book, Sri Mulyani discusses Indonesia’s macro and economic condition. She also discusses the different views on the economic condition before and during the Covid-19 pandemic.
“Frankly speaking, I wrote amid this condition and was assisted by a technical team from the Ministry of Finance,” she said.
Coordinating Minister for Economic Affairs (2001-2004) Prof. Dorodjatun Kuntjoro-Jakti said efforts to maintain economic stability need to be accompanied by transformation and reform. However, the transformation and reform should not be based solely on existing literature. “Policymakers should dig deeper to identify domestic problems. We can’t just rely on ‘guidebooks’, “said Prof. Dorodjatun.
Dorodjatun went on to say that economic transformation must continue even though Indonesia is in a pandemic situation. Transformation should be region-based to solve the problem of imbalance between Java and regions outside Java. Transformation must also consider non-economic factors in development.
Indonesia’s Gini coefficient or ratio has continued to shrink, from 0.402 in 2015 to 0.382 in 2019. The Gini coefficient is an indicator of wealth inequality measured by a score of 0-1. The higher the score, the greater the imbalance.
Chatib Basri, who served as Minister of Finance for the period 2013-2014, said that so far, development policies seem to have focused solely on economic factors. In fact, there are non-economic factors that the government must consider, such as politics and social issues. This situation ultimately slows down national development.
“Economic theories underline the importance of reform but do not offer guidelines for reform,” said Chatib. According to Chatib, the reform agenda and economic transformation policies require an institutional role and political support. Non-economic factors are crucial in such an uncertain situation like today. The government must be able to make the most possible policies despite the constraints.
Sri Mulyani said, “The government listens to all aspirations, but in practice, policy making cannot accommodate all interests. Moreover, the government is now faced with an urgent situation that requires a quick policy response to prevent the economy from suffering an even deeper contraction.”
A correction in economic growth has further complicated the policy dilemma. The economy is projected to grow by minus 0.4 percent to 1 percent in 2020, much lower than the initial projection of 5.3 percent. Amid these constraints, policy responses should be directed at preventing further deterioration. (hjtp)