Two Policies Cost Nation Rp6,000 Trillion: Jusuf Kalla

Thursday, 13 July 2017 , 16:00:00 WIB - Economy

Vice President Jusuf Kalla (in the middle) is seen talking to People´s Representatives Council (MPR) Chairman Rully Chairul Azwar (second right) and MPR Watch Chairman Rully Chairul Azwar (second left), Jakarta, Wednesday (12/7). (ANTARA)

JAKARTA, GRES.NEWS – Indonesia has been an independent State for 70 years. Indonesian Vice President Jusuf Kalla blames imprecise policies behind the country’s adversity.

In fact, two policies have cost the nation Rp6000 trillion, according to him.

"It all goes down to what we wanted to achieve and what went wrong in building our economy? It is not Pancasila’s fault. It was the government that was trapped to follow a trend and their policies that was not in line with the targets we wanted to achieve. In the past 10-15 years, we have been trailing Malaysia and Thailand. Why haven't we been progressing? There are two main reasons we are not progressing as fast as other nations," said Jusuf Kalla, Jakarta, Wednesday (12/7).

Jusuf explained that, during the 1997-1998 crisis, Indonesia suffered significant losses. The country adopted the liberalism ideology and issued regulations that allowed banks to mushroom. There were up to 250 banks. As a result, they began competing tightly and began offering high interests, which led to bad loans.

Then, the government made a mistake by issuing guarantee blankets and launching the Bank Indonesia Liquidity Support (BLBI) program that saw the government spend up to Rp600 trillion. Including the interests, the value would reach Rp3,000 trillion, Jusuf Kall said.

The second mistake was the fuel subsidy program in 2013-2014. Global crude was hovering at its record high of US$100 per barrel and the government had to spend Rp400 trillion to subsidize fuel for the public, which was equivalent to 25 percent of the State Budget back then. In the previous decade, Indonesia spent up to Rp3,000 trillion to provide fuel subsidy.

The two incorrect policies cost the nation Rp6,000 trillion, which is equivalent to around 25 years of infrastructure development. "Just imagine, with just half that amount to build our infrastructure, we could have surpassed Thailand and Malaysia," he said.

Jusuf further explained that the two policies benefited the rich and led to Indonesia’s high gini ratio.

MAKING AMENDS – Coordinating Minister for the Economy Darmin Nasution said Indonesia’s economy has been improving in the past few years, not forgetting to mention that the improvements have been small.

"If we line up our economic growth in the past 9-10 years, our economy dropped in 2014 and has rebounded a little since then. Inflation has clearly improved compared to the past 4-5 years. Our poverty rate has consistently improved in the past decade, said Darmin, Jakarta, Wednesday (12/7).

The economy has been growing, among others due to the narrowing economic imbalance in the country. Darmin said Indonesia has shifted to the natural resources sector, such as mining and a little to the plantation industry.

"The condition has been improving in the past two years. Our gini ratio was 0.41 in 2013. Last year it was 0.394. Our unemployment rate has also been improving," he said. (dtc/mfb)