0 Your letters: Economic disparity deepening

While growth of the world economy is sluggish, national political trends are paying less attention to the economy. These two conditions could potentially become negative factors in the economic problems of this country. World oil prices are looking for a new equilibrium as the global economy slows because of budget cuts in the US. Regrettably, political elites in the Indonesian government prefer to carry out political movements rather than set up a strategy to improve the economy. 

However, macroeconomic indicators do look quite encouraging. Indonesia’s economic growth is predicted to reach 6.4 percent this year. Macro indicators look good, but it seems that benefits will only be enjoyed by some parties. Currently, Indonesia’s Gini coefficient, a measure of the gap between the rich and poor, reached 0.41. That means there is an increasing gap between the few people who are getting richer and while the welfare of most people is not being improved. 

Gini coefficient of 0.41 as of March 2011 is the highest in the history of the Indonesian economy. In 2010, the Gini coefficient was only 0.38. Economic inequality will be exacerbated by the situation facing Indonesia’s exports, which are likely to weaken with the decline in a number of commodity prices. Prices of palm oil, a mainstay export, are still depressed. 

Weakening exports and a slowing world economy eventually affect the balance sheet and impact purchasing power. Adjustments are necessary to overcome this gap and achieve a new balance to gradually eliminate social tensions and promote justice in development. However, such adjustments have to be made throughout a broad range of economic mechanisms.

Teguh Pujonugroho
Madiun, East Java
source : the jakarta post