23November2017

Home Editorial INDONESIAN GOVERNMET’S EFFORTS IN SOLVING THE ECONOMIC GAP

INDONESIAN GOVERNMET’S EFFORTS IN SOLVING THE ECONOMIC GAP

Indonesian President Joko Widodo (Jokowi) officially opened the Indonesian Muslims Economic Congress (KEU) held by the Indonesian Ulema Council (MUI) through the Commission on Economic Empowerment in Jakarta on Saturday (22/4). The Muslim Economic Congress is expected to discuss and deliver ways to address the economic disparities.

The Indonesian Central Bureau of Statistics (BPS) reported Indonesia's economic growth reached 5.02 percent in 2016. This figure is higher than that of 2015 which stood at 4.88 percent. Even among G20 countries or groups of 19 countries with the world's largest economy plus the European Union, Indonesia ranks the third after India and China. Even so, President Joko Widodo is not very satisfied with that achievement. Because according to him, the economic growth in 2016 did not fully affect the level of public gap.

The economic gap is an imbalance in income distribution between high income and low income groups. Poverty and economic disparities have become a major problem especially in developing countries. The issues of economic inequality include economic equality, equality of expenditure and equality of opportunity. There are several numerical indices to measure the economic gap. Among the existing gap measurement methods, the Gini coefficient is the most popular index.

In Indonesia, the imbalance ratio or Gini ratio in 2016 was still at 0.397. It is decreasing when compared to Gini ratio in 2015, as in March 2015 that reached 0.408 or in September 0.402. The figure must still be lowered, so the government will still focus on overcoming the imbalance in Indonesia through a just economy program, namely the redistribution of assets, agrarian reform and partnership program.

In redistribution of assets and agrarian reform, the government will give land to small communities to be processed. This program has been started and is expected to be utilized optimally by the community. Meanwhile, in the partnership program, the government will try to make large companies become partners of small companies. In fact, President Joko Widodo has requested that this cooperation is more profitable for Small and Medium Micro Enterprises.

Issue on economic inequality will have an impact on social inequality. The government’s efforts to overcome economic disparities through partnership programs and agrarian reform are expected to be realized and can benefit the people, especially the low income people. (AHM)

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