World Bank Estimation Doesn’t Impact to Indonesia’s Economic Progress

The president of the World Bank on Thursday (14/4) lamented the weak state of the global economy and warned that the kind of tax evasion exposed in the Panama Papers investigation is fueling poverty around the world. Jim Yong Kim said the World Bank has slashed its forecast of global growth this year to 2.5 percent from 2.9 percent.

“In the global economy there are not many bright spots around the world,” Kim said at the spring meetings of the World Bank and International Monetary Fund.

Kim also warned that the economy is at further risk from the refugee crisis, climate change and pandemics.

Addressing the leaked documents from a Panama law firm that have revealed details of offshore financial accounts, Kim said such tax havens can have a devastating effect on global poverty.

“I want to stress that when taxes are evaded, when state assets are taken and put into these havens, all these things can have a tremendously negative effect on our mission to end poverty,” Kim said.

Kim also urged developed nations to open borders and embrace migrants from conflict zones and low-income countries. “The task of envisioning, especially in high-income countries, societies that are multicultural, multilingual, more diverse, more inclusive is actually a very good economic strategy,” Kim said (http://www.thejakartapost.com/news/2016/04/14/world-bank-head-warns-of-weak-economy-bemoans-tax-evasion.html)

The attractiveness of Economic Potential in Indonesia

The attractiveness of Economic Potential in Indonesia is triggered many countries will be investated their countries in this country. For example, the Danish government has inked a Memorandum of Understanding (MoU) with the Agriculture Ministry to invest at least Rp 2 trillion (US$152.7 million) into Indonesia’s cattle, corn and sugar plantation industries. The MoU would be effective for five years and would be coordinated through the Danish embassy in Indonesia. Denmark would provide the agricultural technology to Indonesia, while Indonesia would provide two million hectares of land for the investment.

The government prepared two million hectares of farmland in Southeast Sulawesi, Kalimantan, West Nusa Tenggara, and East Nusa Tenggara. One million hectares would be allocated for live cattle, 500,000 hectares for corn plantations, and the remaining 500,000 hectares for sugarcane plantations.

Meanwhile, Indonesia plans to reaffirm its partnership with the United Kingdom to boost the creative economy industry, including music, film, fashion, art and digital development.  The five-year partnership will be stipulated in the amended memorandum of understanding (MoU), initially signed by Tourism and Creative Economy Minister Mari Pangestu in October 2012, under the Yudhoyono administration.

President Joko Widodo will be visiting England on April 19-20 to sign the amended MoU, which includes 16 sectors of creative economy industry in the country namely advertising; architecture; craft; culinary; digital development; fashion; film, animation and video; fine arts; interior design; literature and publishing; music; performing arts; photography; product design; television and radio; and visual communication design.

On the other hand, Adam Pushkin, the arts and creative industries director of the British Council in Indonesia, mentions the importance of digital development for the industry. “We see Indonesia as an incredibly young country. The majority of the 255 million people here is under 30, and that is an incredible resource of talent.” Meanwhile, Amelia Hapsari, the program director of In-Docs, a documentary community in Jakarta, said that her side had established a partnership with Britdoc, a documentary organization based in London. With the partnership between Indonesia and the UK, Amelia hoped it could pave the way for both organizations to further promote documentary films across both countries.

Another attractiveness is gotong royong, a concept involving mutual cooperation, is the main key for developing rural economies in Indonesia and would be the main focus of the current administration. President Joko Widodo stated that his administration would revive the faded mutual cooperation spirit in rural development. Each party was used to working separately in recent years, when the central government had its own programs and so did the provincial government. “The point is to have mutual cooperation between the central government, provincial government, district, state, private and also society, farmers, fishermen, SMEs [small and medium enterprises, and others,” Jokowi said during ‘Synergized-Actions for the People’s Economy’ program launched on Monday in Brebes, Central Java.

To ensure the implementation of the project, Jokowi promised to conduct regular checks. The synergy program, aimed to solve problems that have been choking the farmers, such as over land certification, access to finance, supply of quality seeds, supply of production tools and equipment and also post-harvest problems.

Jokowi underlined that many farmers in Indonesia have been trapped into using loan sharks because of the minimal access they have to financing as they have no assets to serve as debt collateral, or they are unable to show legal certificates of land ownership for getting bank loans.

Therefore, the Indonesia’s government hopes all of stakeholders can be participated to boost national economic progress through envisioning especially in high-income countries, societies that are multicultural, multilingual, more diverse, more inclusive economic strategy.

To anticipating risk from the refugee crisis, climate change and pandemics, the Indonesia’s government can be urged private organization to implementing their corporate social respondbility funds for prevent the negative effect of refugee crisis, climate change and pandemics.

Besides that, all of national stakeholders can pursue positive and an ultimate target on their activities for contributing a positive measures. Eventhough, we sure the world bank estimation doesn’t impact to our national economic, we must alert on an economic strategic surprises such as the slump in global oil prices, recession, currency war and unfinished conflict in Middle East regions.

I think Jokowi administration has plan to boost and spur our national economic progress, but this plan can’t be implemented if any political manuevre from national vested interest group or a manuevre which is decided and planned by foreign non state actor even state actor too. To predicting and to eliminating those threats, Jokowi administration needs a strong intelligence economic data from his cabinet.

*) Toni Ervianto,  Economic and Politic Observer, Residing in Jakarta.