Who Will Eclipse America?

"Segala yang ada di muka Bumi pada waktunya akan jatuh"

~Arip Nurahman~

By: Prof. Simon Johnson, Ph.D. a former chief economist of the IMF, a professor at MIT. 

WASHINGTON, DC – According to Voltaire, the Roman Empire fell “because all things fall.” It is hard to argue with this as a general statement about decline: nothing lasts forever. But it is also not very useful. In thinking, for example, about American predominance in the world today, it would be nice to know when it will decline, and whether the United States can do anything to postpone the inevitable.

Contemporary commenters despaired of the Roman Empire for several hundred years before it finally collapsed. Could America find its way to a similar extension?

In terms of providing an essential structure for discussion of this problem, Arvind Subramanian’s new book, Eclipse: Living in the Shadow of China’s Economic Dominance, is a major contribution. (Full disclosure: Subramanian and I are colleagues at the Peterson Institute for International Economics, and we have worked together on other issues.)

In particular, Subramanian develops an index of economic dominance that should become a focus of conversation anywhere that people want to think about changes in world economic leadership. There is no need to know any economics in order to be fascinated by this book: it is about power, pure and simple.

The basic facts are incontrovertible. The United Kingdom was the world’s dominant economic power from the rise of industrialization in the early nineteenth century. But it lost its predominance and was gradually eclipsed by the US, which, at least since 1945, has been the undisputed leader among market-based economies.

The US surpassed the UK in terms of industrial production as early as the end of the nineteenth century, but that was not enough to tip the balance. Economic predominance shifted only when the UK ran large current-account deficits during World Wars I and II – the country had to borrow heavily in order to finance its war effort, and imports were significantly higher than exports. Much of the world’s gold reserves ended up in the hands of the US.

This helped undermine the role of the British pound internationally and catapulted the US dollar to the fore – particularly after the Bretton Woods conference in 1944, at which it was agreed that countries would hold their reserves in dollars as well as gold.

More recently, however, it has been the Americans’ turn consistently to run large current-account deficits, buying more from the rest of the world than they earn by selling goods and services abroad. On this dimension, the US seems destined to repeat the mistake of the British.

At the same time, emerging-market countries’ per capita income has risen – as has their international role. In particular, China has followed a strategy in the past decade or so that entails running large current-account surpluses and building up foreign-exchange reserves, which are now reported to be in excess of $3 trillion. Indeed, Subramanian’s most provocative argument is that China has already surpassed the US in terms of economic dominance – but we have not yet woken up to this new reality.

The story is fascinating and well told; but there is still a great deal worth arguing. For example, did the British decline because the US could not be stopped, or because of problems within the British Empire and at home?

A few years ago, some regarded Japan as having overtaken the US. Europe also was supposedly vying for global economic dominance. Now any such claims would seem preposterous. In both cases, the credit system got out of control, with too much lending to the private sector in 1980’s Japan and excessive government borrowing during the 2000’s in the eurozone.

Similarly, it remains unclear that the Chinese development path will remain smooth. Fixed investment in China is close to 50% of GDP – which must be a world record. Credit to state firms and to households continues to grow rapidly. Isn’t this a version of exactly what derailed Japanese growth?

On the key issue of being able to issue a “reserve currency” that investors and governments want to hold, Subramanian is correct that China has many of the prerequisites in place. But it still lacks some key elements, including fully-fledged property rights. If you worry about getting your money out of a country when times turn tough, China is not an attractive place to hold your reserves.

External challenges do sometimes bring down states. But, more frequently, the big problems are internal – the regime cannot deliver growth, its legitimacy fades, and people start to head for the exits (or at least get their money out).

If the US is eclipsed any time soon, this will more likely be due to its loss of social cohesion and its dysfunctional politics. China might well step in to fill that vacuum, but that is quite different from being able to elbow America aside.

Simon Johnson, a former chief economist of the IMF, is co-founder of a leading economics blog, http://BaselineScenario.com, a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-author, with James Kwak, of 13 Bankers.

Copyright: Project Syndicate, 2011.

www.project-syndicate.org

Apa Itu Ekonomi Hijau?

"Mun geus nyaho ulah poho, tangtu moal kabobodo. Mun geus ngarti ulah lali, pinasti moal pahili. Lamun rasa geus rumasa, kade ulah asa-asa, hirup moal katambias. Mun geus iman ulah mangmang, moal kagembang ku nu herang"

~Bangunharja Proverbium~

Green economics is the economics of the real world—the world of work, human needs, the Earth’s materials, and how they mesh together most harmoniously. It is primarily about “use-value”, not “exchange-value” or money. It is about quality, not quantity for the sake of it. It is about regeneration---of individuals, communities and ecosystems---not about accumulation, of either money or material.

The industrial or capitalist definition of wealth has always been about the accumulation of money and matter. Any use-values generated (i.e. social needs met) have been secondary—a side-effect, by-product, spin-off or trickle-down—to the primary goal of monetary accumulation.

For two centuries, the quest to accumulate money or capital drove a powerful industrialization process that actually did spin off many human benefits, however unfairly distributed. But blind material and monetary growth has reached a threshold where it is generating more destruction than real wealth. A postindustrial world requires an economics of quality, where both money and matter are returned to a status of means to an end. Green economics means a direct focus on meeting human and environmental need.

Tinkering with money, interest rates, or even state regulation is insufficient in creating sensible economies. One can scarcely imagine a more inefficient, irrational and wasteful way to organize any sector of the economy than what we actually have right now. Both the form and the content of sustainable agriculture, of green manufacturing, of soft energy, etc. are diametrically opposed to their current industrial counterparts, which are intrinsically wasteful.

There is no justifiable rationale to be producing vast quantities of toxic materials; or generating more deskilled than skilled labour; or displacing labour rather than resources from production; or extending giant wasteful loops of production & consumption through globalization. These are economic inefficiencies, economic irrationalities that can only be righted by starting from scratch—to look at the most elegant and efficient ways of doing everything. As green economist Paul Hawken writes, our social and environmental crises are not problems of management, but of design. We need a system overhaul.

Green economics is not just about the environment. Certainly we must move to harmonize with natural systems, to make our economies flow benignly like sailboats in the wind of ecosystem processes. But doing this requires great human creativity, tremendous knowledge, and the widespread participation of everyone. Human beings and human workers can no longer serve as cogs in the machine of accumulation, be it capitalistic or socialistic. Ecological development requires an unleashing of human development and an extension of democracy. Social and ecological transformation go hand-in-hand.

Green economics and green politics both emphasize the creation of positive alternatives in all areas of life and every sector of the economy. Green economics does not prioritize support for either the "public" or the "private" sector. It argues that BOTH sectors must be transformed so that markets express social and ecological values, and the state becomes merged with grassroots networks of community innovation. For this to happen, new economic processes must be designed, and new rules of the game written, so that incentives for ecological conduct are built into everyday economic life. The state can then function less as a policeman, and more as a coordinator. This is a very different kind of "self-regulation" than current profit- and power- driven market forces. The basis for self-regulation in a green economy would be community, and intelligent design which provides incentives for the right things.

Here are ten interrelated principles that cover key dimensions of a green economy:

1. The Primacy of Use-value, Intrinsic Value & Quality: This is the fundamental principle of the green economy as a service economy, focused on end-use, or human and environment needs. Matter is a means to the end of satisfying real need, and can be radically conserved. Money similarly must be returned to a status as a means to facilitate regenerative exchanges, rather than an end in itself. When this is done in even a significant portion of the economy, it can undercut the totalitarian power of money in the entire economy.

2. Following Natural Flows: The economy moves like a proverbial sailboat in the wind of natural processes by flowing not only with solar, renewable and "negawatt" energy, but also with natural hydrological cycles, with regional vegetation and food webs, and with local materials. As society becomes more ecological, political and economic boundaries tend to coincide with ecosystem boundaries. That is, it becomes bioregional.

3. Waste Equals Food: In nature there is no waste, as every process output is an input for some other process. This principle implies not only a high degree of organizational complementarity, but also that outputs and by-products are nutritious and non-toxic enough to be food for something.

4. Elegance and Multifunctionality: Complex food webs are implied by the previous principle--integrated relationships which are antithetical to industrial society's segmentation and fragmentation. What Roberts & Brandum (1995) call "economics with peripheral vision", this elegance features "problem-solving strategies that develop multiple wins and positive side-effects from any one set of actions".

5. Appropriate Scale / Linked Scale: This does not simply mean "small is beautiful", but that every regenerative activity has its most appropriate scale of operation. Even the smallest activities have larger impacts, however, and truly ecological activity "integrates design across multiple scales", reflecting influence of larger on smaller and smaller on larger (Van der Ryn and Cowan, 1996).

6. Diversity: In a world of constant flux, health and stability seem to depend on diversity. This applies to all levels (diversity of species, of ecosystems, of regions), and to social as well as ecological organization.

7. Self-Reliance, Self-Organization, Self-Design: Complex systems necessarily rely on "nested hierarchies" of intelligence which coordinate among themselves in a kind of resonant dance. These hierarchies are built from the bottom up, and--in contrast to civilization's social hierarchies--the base levels are the most important. In an economy which moves with ecosystem processes, tremendous scope for local response, design and adaptation must be provided--although these local and regional domains must be attuned to larger processes. Self-reliance is not self-sufficiency, but facilitates a more flexible and holistic interdependence.

8. Participation & Direct Democracy: To enable flexibility and resilience, ecological economic design features a high "eyes to acres" ratio (Van der Ryn & Cowan, 1996)--that is, lots of local observation and participation. Conversely, ecological organization and new information/communications technologies can provide the means for deeper levels of participation in the decisions that count in society.

9. Human Creativity and Development: Displacing resources from production and tuning into the spontaneous productivity of nature requires tremendous creativity. It requires all-round human development that entails great qualities of nurture. These are qualities of giving and real service that have been suppressed (especially in men) by the social and psychological conditioning of the industrial order. In green change, the personal and political, the social and ecological, go hand-in-hand. Social, aesthetic and spiritual capacities become central to attaining economic efficiency, and become important goals in themselves.

10. The Strategic role of the Built-environment, the Landscape & Spatial Design: As Permaculturalist Bill Mollison has emphasized, the greatest efficiency gains can often be achieved by a simple spatial rearrangement of system components. Elegant, mixed-use integrated design which moves with nature is place-based. In addition, our buildings, in one way or another, absorb around 40 per cent of materials and energy throughput in North America. Thus, conservation and efficiency improvements in this sector impact tremendously on the entire economy.

Green economic conversion must be radical, but it must also be incremental and organic. How is this possible? Rodale cites the need for a kind of economic succession which mimics ecological landscape change. We need "pioneer enterprises" which can thrive in today's hostile economic landscape, but also prepare the ground for more ecological and egalitarian enterprises to come.

A vision of what each sector of the economy would look like in an ecological economy--based on the specifics of each place--is a starting point. This vision must be coupled with practical action in each of these sectors, gradually moving toward this vision. Enough practical activity can eventually generate the impetus for state action to level the playing field for ecological alternatives.

References:

http://www.greeneconomics.net/

Foto: Sistem Irigasi Desa Bangunharja, Cisaga, Kab. Ciamis. West Java.
oleh: Arip Nurahman

Indonesia 2012

Bagaimana Indonesia dapat meraih kesejahteraan?

1. Menyusun strategi yang mungkin untuk pertumbuhan yang tinggi dan pesat

2. Memanfaatkan kesempatan-kesempatan global dalam sektor-sektor ekonomi yang penting

3. Mengelola sumber-sumber ekonomi kunci secara efisien

4. Berinvestasi dibidang Pendidikan dan Riset

5. Menarik Investasi langsung

6. Menciptakan lapangan pekerjaan secara Massive

7. Meningkatkan Bisnis Sosial untuk mengentaskan kemiskinan

Oleh:

Arip Nurahman
(Founder RGC. Pendidik, Peneliti, Pengusaha)

The Power to End Poverty

By: Dr. Ban Ki-moon, M.P.A.

(is Secretary-General of the United Nations., Harvard University)

"Saya harap Anda dapat mempersembahkan karya yang membuat Anda diingat bukan hanya sebagai generasi yang kreatif tapi sebagai generasi kreatif yang memiliki kesadaran sosial (socially-conscious creative generation). Cobalah."
~Prof. Muhammad Yunus, Ph.D., Peraih Nobel Perdamaian~

Growing up as a child during the Korean War, I knew poverty first hand. I saw it around me every day; I lived it. One of my earliest memories is walking up a muddy track into the mountains to escape the fighting, my village burning behind me and wondering what would happen to my family and me.

The answer was the United Nations and other international agencies. With the help of many countries and friends, my country was able to get back on its feet and carry on after that terrible and devastating conflict. Thanks to decades of hard work and sacrifice by millions of Koreans, the Republic of Korea rose from desperate poverty to prosperity in less than a half-century.

As Secretary-General of the UN, I am still living that story. Every day, I work to help end the extreme poverty that traps nearly a billion of the world’s people.

You may imagine, then, the powerful memories that I felt when I visited the Mwandama Millennium Village in the deeply impoverished southern African country of Malawi. As in my youth, I saw once again the challenges and hardship of rural poverty. Yet I also saw, once again, the power of community spirit to overcome it – the same sense of solidarity and determination that launched Korea’s rural modernization five decades ago.

In 2000, the world’s leaders committed to achieve major reductions in poverty, hunger, and disease by 2015. These targets, endorsed by all UN member countries, comprise the eight Millennium Development Goals. The Millennium Village Project, a partnership of academia, business, and UN agencies, aims to show how these goals can be achieved in even the poorest communities in the world.

Like South Korea’s own experience in fighting poverty, Millennium Villages in Africa, and similar projects elsewhere, are now surging ahead in food production, children’s health, and in forging a sustainable pathway out of poverty itself. At the same time, I was impressed with one crucial difference between Korea’s efforts in the 1960’s and what is possible today. Touring the Mwandama Village, I saw the potential of modern technologies – smart phones and mobile broadband, improved seed varieties, the latest in drip irrigation, modern diagnostic tests for malaria, and low-cost solar-energy grids – to advance human well-being in ways that simply were not feasible even a few years ago.

I saw a community health worker using a smart phone to manage malaria treatment within a household. The worker used a low-cost diagnostic kit to confirm the malaria diagnosis, circumventing the need for a microscope and laboratory; a smart phone to key in the test results and receive advice from an “expert system” designed by public-health specialists; and state-of-the-art combination drug therapy to cure the illness. The child was cured within the home; a few years ago, that same child would have faced a high risk of death unless he was somehow brought to a distant clinic in time.

I saw other breakthrough changes in daily life. In a community that once could not feed itself, a giant warehouse was almost bursting with tons of surplus grain. By using high-yield seeds, better soil management, and proper row planting, the community has more than tripled its crop production, and villagers who previously were hungry grain buyers are now food-secure grain sellers.

That surplus, in turn, has contributed directly to improved education, as families donate a portion of their surplus to the school’s mid-day meal program. Now the students get a nutritious bowl of porridge and fruits, giving them the energy to pursue their studies throughout the school day. As so many schools have discovered, mid-day meals lead to an end-of--year jump in performance on national exams.

This month, the Millennium Villages Project launches its second five-year stage on the way to the MDGs target date of 2015. Around Africa, and now around the world, governments are scaling up the lessons from this particular project and others like it: empower communities, help them to invest in their futures using cutting-edge technologies, and thereby end extreme poverty. The MDGs might once have seemed to be merely a set of hopes and aspirations. Now we know that they are actually a practical roadmap out of poverty.

The world leaders who met at the UN in September for the annual General Debate all agreed on a central point: the importance of fighting poverty, hunger, and disease is crucial for our collective survival. They know that extreme poverty threatens the lives of hundreds of millions of people who lack reliable access to adequate nutrition, potable water, health care, and education.

They also know that the dangers don’t stop at the edge of the village or slum; today’s hunger hotspots all too frequently become tomorrow’s violent hotspots. Regardless of whether we are rich, poor, or in between, we share an overwhelming interest in the MDGs’ success, so that every region trapped in extreme poverty can break free, grow, and prosper.

Ban Ki-moon is Secretary-General of the United Nations.

Copyright: Project Syndicate, 2011.

www.project-syndicate.org

Sembilan Capaian KTT ke-19 ASEAN

Nusa Dua, Bali: Presiden Susilo Bambang Yudhoyono telah menutup Konferensi Tingkat Tinggi (KTT) ke-19 ASEAN dan KTT Asia Timur pada Sabtu (19/11) sore, di Bali Nusa Dua Convention Center. Perhelatan besar negara-negara Asia Tenggara dan mitra dialog selama tiga hari itu, 17-19 November, usai sudah.

Ada banyak hal yang telah dihasilkan. Sekadar meringkas, berikut adalah sembilan capaian utama keketuaan Indonesia di ASEAN:

PERTAMA:

Langkah-langkah konkret guna memperkuat ketiga pilar Komunitas ASEAN

1. Keberhasilan penguatan langkah-langkah transformasi ASEAN dari sekedar asosiasi menjadi suatu komunitas kerja sama yang

lebih kohesif sejalan dengan visi Komunitas ASEAN 2015.

2. Memastikan kemajuan yang seimbang di antara ketiga pilar dibawah seluruh cetak biru Komunitas ASEAN secara konsisten dan

saling isi-mengisi.

3. KTT ke-19 ASEAN telah menyepakati sejumlah instrumen penting bagi penguatan pilar-pilar Komunitas ASEAN:

- Pembentukan ASEAN Institute for Peace and Reconciliation;

- Diisepakatinya ASEAN Framework for Equitable Economic Development: Guiding Principles for Inclusive and Sustainable Growth

dan ASEAN Framework for Regional Comprehensive Economic Partnership;

- Keberlanjutan komitmen untuk menjadikan ASEAN sebagai forum kerja sama yang people-oriented, people-centred, and

people-driven.

KEDUA:

Penguatan Pertumbuhan Ekonomi di Kawasan

Indonesia terus mendorong langkah-langkah bersama bagi penguatan pertumbuhan ekonomi kawasan, meliputi:

1. Memastikan agar ASEAN Architecture for Economic Integration and Cooperation betul-betul berfungsi dalam menjaga tingkat

pertumbuhan ekonomi negara-negara ASEAN.

2. Terus mendorong implementasi The Master Plan on ASEAN Connectivity guna mendukung kerja sama perdagangan intra-

ASEAN.

KETIGA:

Mengambil peran utama dalam menata arsitektur kerja sama kawasan yang lebih efisien dan efektif.

1. EAS (East Asia Summit) sebagai forum utama untuk pembahasan isu-isu strategis di kawasan.

2. Pengakuan leaders atas sentralitas ASEAN dalam menata arsitektur kawasan Asia Timur.

KEEMPAT:

Menjaga stabilitas dan keamanan kawasan Asia Tenggara.

1. Kawasan kita masih dihadapkan pada sejumlah tantangan.

2. Selama Keketuaan Indonesia, ASEAN telah mampu mengelola konflik melalui mekanisme dialog:

- isu Thailand-Kamboja;

- isu Laut Cina Selatan;

- menciptakan lingkungan yang kondusif bagi dimulai kembalinya Six Party Talks;

- kemajuan signifikan dalam SEANWFZ;

- isu maritim dalam ASEAN Maritime Forum (AMF).

3. Memperkuat kemampuan ASEAN mengatasi konflik (conflict resolution) dan meningkatkan capacity building.

KELIMA:

Penguatan peran ASEAN secara global.

1. Peran ASEAN yang lebih besar dalam penanganan masalah-masalah global.

2. Pengesahan Bali Declaration on ASEAN Community in a Global Community of Nations (“Bali Concord III”).

3. Dicapainya Kemitraan Komprehensif antara ASEAN dan PBB.

KEENAM:

Upaya bersama untuk memperkuat ekonomi Asia Timur (Kawasan EAS)

1. KTT Asia Timur sepakati The Declaration of the 6th East Asia Summit on ASEAN Connectivity.

2. Untuk menjadikan ASEAN Connectivity sebagai bagian penting dari kerjasama EAS, maka pada KTT Asia Timur di Bali ini telah

disepakati The Declaration of the 6th East Asia Summit on ASEAN Connectivity.

KETUJUH:

Upaya bersama untuk membangun landasan dan tindakan nyata menangani food, water, and energy security serta climate change.

1. Kerja sama ASEAN:

- Implementasi skema ASEAN – Plus Three Emergency Rice Reserves (APTEER);

- Percepatan realisasi ASEAN Power Grid dan Rencana Aksi ASEAN untuk Kerja Sama Energi (APAEC) 2010-2015.

2. Komitmen ASEAN untuk terus engage dalam pembahasan masalah perubahan iklim di berbagai forum.

KEDELAPAN :

Upaya bersama untuk mengatasi non-traditional security challenges: natural disasters, terrorism, transnational crimes.

1. Peluncuran dan pemafaatan ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre).

2. Implementasi ASEAN Convention on Counter-Terrorism dan ASEAN Plan of Action to Combat Transnational Crime.

3. Dicapainya komitmen untuk membuat suatu mekanisme untuk menangani masalah perompakan di laut.

KESEMBILAN:

Upaya bersama untuk memelihara perdamaian, keamanan dan stabilitas dan ketertiban Kawasan Asia Timur.

1. KTT Asia Timur 2011 mengesahkan The Declaration of the East Asia Summit on the Principles for Mutually Beneficial Relations.

Mengenai keinginan TimorLeste untuk menjadi anggota ASEAN, para pemimpin ASEAN telah bersepakat untuk membentuk ASEAN Coordinating Council Working Group (ACCWG) untuk membahas persoalan ini secara menyeluruh. Indonesia telah secara jelas menyampaikan dukungan penuhnya bagi keanggotaan Timor Leste tersebut.

Green Economy Sustainable Development and Poverty Eradication

By: Prof. BOEDIONO, B.Sc., M.Ec., Ph.D.

(Vice President of R.I., Great Teacher at UGM, Former Governor of BI., Ph.D. Wharton School, University of Pennsylvania.)

Julukan: The man to get the job done. The silent man.


Keynote Address

the Vice President of the Republic of Indonesia

On the Occasion of the Opening of

TUNZA International Youth and Children Conference 2011

Bandung, 27 September 2011



Bismillahirrahmanirrahim

Assalamu alaikum Wr Wb



Excellency Mr. Achim Steiner, the Executive Director of UNEP,

Excellency Ministers,

Excellency Ambassadors,

Honorable Governor of West Java,

Honorable Mayor of Bandung,

Distinguished youth and children delegates,

Ladies and gentlemen,

First of all allow me to welcome you to Bandung for the auspicious occasion of Tunza International Children and Youth Conference 2011. It is an honour for me to address such a distinguished audience.



Bandung is a historical city, in which in 1955, leaders from Asian and African countries met in a Conference that upheld the principle of self determination. The importance of this conference is that it inspires the freedom from colonialism.



Today, we are here also for the issue of utmost importance, namely, the environment. It is therefore my fervent hope that the conference will pave the way towards freedom from environmental degradation. Through this conference, we hope to strengthen partnership towards sustainable development.



Excellencies

Ladies and gentlemen,



In a world as beset with environmental challenges as today, the need to improve awareness is undoubtedly paramount. Hence it is a pleasant sight that today I witness the children and youth delegations from all over the world, enthusiastically show not only their awareness but also their commitment to treat the mother earth with care.



Fully conscious the need to conserve the environment for the future generations, it is important to maintain the environmental sustainability. Given the many challenges such as food and energy security, land degradation and climate change, coupled with growing population, the call for fundamental changes in our behaviour and lifestyles become even more pressing.



This is in line with the theme of Tunza Children and Youth Conference 2011, ‘Reshaping Our Future through a Green Economy and Sustainable Lifestyles.



Green economy, in the context of sustainable development and poverty eradication, is the avenue for the aforementioned fundamental changes. Green economy has become the key towards alternative development pathways, in which economic growth is not delivered perforce at the expense of environmental degradation - development pathways that balance the the economic, social and environmental aspects.



In this regard, Indonesia has shown its unswerving tread to follow the sustainable development path that is pro-growth, pro-poor, pro-job and pro-environment. This commitment, as always reiterated by our President, is evident in Indonesia’s leadership in becoming part of the solution to the global problem such as climate change.



Excellencies,

Ladies and gentlemen,



I would also like to note that whereas governments shall be the prime mover of sustainable development strategies, other stakeholders can certainly play significant part in supporting the efforts.



In this regard I put strong emphasize that reshaping our future will require collective vision, creativity, and support from a broad cross-section of society, including the general public.



Therefore, I believe that all present in this august occasion can play a part of the agent of change towards sustainable lifestyles of the world community. This sustainable lifestyles will lay a firm ground on which sustainable development can be achieved.



The United Nations Secretary General, Excellency Mr. Ban Ki Moon has once said that the youth is not only the leaders of tomorrow, but also the partners of today. I would therefore call to my partners, each one of you the youth from all countries, to stand up for a sustainable lifestyle in promoting green economy in the context of sustainable development and poverty eradication.



Only this way we are able to reshape our future for a better tomorrow.



Finally, ladies and gentlemen, I wish you all productive deliberations and fruitful outcome to reflect on, that should lead to the way forward for a sustainable planet as our legacy for the next generations.



Thank you.

Wassalamu’alaikum Warahmatullahi Wabarakatuh.



Bandung, 27 September 2011

Vice President of the Republic of Indonesia

PROF. DR. BOEDIONO, B.SC., M.EC.



Pilihan yang Anda putuskan untuk diri Anda sendiri akan menentukan nasib umat manusia.

Indonesia: Thinking Big Do Local

"Bismillah tuturus laku, muru gapura rahayu, Bangunharja jatining bagja, titi nu luyu saestu, tetep galeuh lelembutan, nyinglar syetan ngusir iblis, di palar setraning rasa, dipamrih surtining ati, melaan ucap jeung lampah, mangsana ngarumat jeung babakti ka nagri tur lemah cai, dina papantunan hirup manut lampahing ibadah sumerah ka Nu Kawasa."

~Karuhun~

Indonesia’s newly published economic master plan sets out ambitious targets to become one of the world’s biggest economies over the next 15 years. The plan unveiled by President Susilo Bambang Yudhoyono (SBY) also put the spotlight on the need for heavy investments in infrastructure coupled with improvement in the investment climate.

On May 27, President Yudhoyono unveiled the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI), which will carry the country through to 2025. It aims to make Indonesia, the 17th largest economy in the world last year, one of the world’s 10 biggest economies by 2025, taking GDP to $4.5trn and increasing the per capita income from $3000 now to $15,000.

To achieve this, the master plan seeks to raise average annual growth to 8-9% between 2015 and 2025, from around 6% now. The MP3EI also sets the target of bringing inflation down from 6% now to 3% by the middle of the next decade.

The plan outlines Rp4000trn ($468.5bn) in investments to be made over the next 14 years, including in infrastructure work. Some Rp544trn ($63.72bn) of government cash has been earmarked for investment to 2025, to be supplemented by Rp836trn ($97.93bn) from state firms.

At the MP3EI launch, Yudhoyono identified 17 projects worth Rp190trn ($22.26bn) in the plan that are expected to start this year, some of which had already been announced. They include hydroelectric and solar power plants; oil palm developments; a steel mill in East Java; new roads including toll motorways; mining projects; expansion of broadband internet; and nickel, cobalt and aluminium factories.

Another major project that the government has pledged to launch this year is the long-awaited Sunda Strait Bridge that would link Java and Sumatra, Indonesia’s most populous islands (and the first and fourth most populous in the world, respectively). The bridge is expected to cost Rp150trn ($17.57bn) and has been subject to planning delays.

While infrastructure and industrial investments have taken most of the headlines, the MP3EI also highlights the importance of moving Indonesia’s economy up the value chain and increasing the level of innovation. Through improving education and boosting school and university attendance, as well as expanding the industrial base, Indonesia aims to develop a more high-tech economy, exporting more tertiary goods and becoming less reliant on commodities, the prices for which have fluctuated greatly over the past five years.

Yudhoyono has acknowledged that Indonesia must first overcome some serious challenges if its vision is to be realised. He identified “five diseases that can make us fail”, including slow bureaucratic processes, conflicting interests in regional government (Indonesia has undergone a process of devolution in recent years), obstructive regulations, broken promises to investors and “unhealthy” political factors.

Despite these challenges, Indonesia has developed into something of an investors’ darling of late, particularly since the economic crisis, which the country weathered remarkably well. The country offers a large and thriving domestic market, access to much of Asia and abundant natural resources.

Business leaders have also drawn attention to the need for a renewed focus on economic reform to enhance the investment climate if growth targets are to be achieved, asserting that the private sector must take the lead in the longer term.

“Foreign direct investment has shown positive increases, demonstrating the level of interest from companies looking to capitalise on the growth of the region,” Mike Gundy, the president-director of BlueScope Steel Indonesia, the local wing of an Australian metals company, told OBG. “However, fiscal incentives and tax holidays are a necessary step if the country is to remain competitive in the region.”

As Yudhoyono noted, red tape is another common complaint cited by investors, and clearing the regulatory thicket around businesses and the limitations on foreign ownership in some sectors would be beneficial.

Indonesia is demonstrably one of the world’s rising economic powers, and has now set the target of shifting up a gear to become one of its very biggest in less than a generation. While public investments will play a crucial part in meeting this goal, a liberated and thriving private sector is the hallmark of an advanced economy.

Source: Oxford Business Group

"Hariwang nyawang Parahiyangan mangsa nu datang, dumareuda medar waruga Sunda nu tereh sirna, ngan ukur ceuk paribasa."

Foto: Di Sungai Cijolang, Bendungan Rendam Bantar Heulang.
Desa Bangunharja Perbatasan dengan Jawa Tengah.
Oleh: Mufa Gunawan dan Ivan Livana.