JAKARTA (TheInsiderStories) – Entering the final phase of voting, the two candidates Joko Widodo-Maruf Amin and Prabowo Subianto-Sandiaga Salahuddin Uno will fight on the final debate stage, Saturday, April 13, four days to vote. Economic issues and social welfare, finance and investment, trade and industry will be the theme of the debate, the catalyst for the 2109 presidential election because it will determine the winner.
The economic programs of the two candidates actually offer a haven of populist economic policy. The problem is that the incumbent will find it more difficult to sell the agenda because the public will compare with the current government performance. Therefore the opposition has a greater chance to attract voters.
For the economic sector, incumbents set the goal of improving the quality of peoples, productive, independent, and competitive economic structures and more equitable development. While the opposition launched a mission to encourage the economy from sources of new growth, maintain the prices of basic necessities and people’s purchasing power, and reduce poverty and socio-economic inequality.
In general, although there are differences in the formulation and focus of attention, the themes raised remain similar, such as maintaining economic growth and equity. In other respects, all candidate pairs promise populist policies such as asset distribution, reform of the social protection guarantee system, increasing minimum wages, and people’s purchasing power.
But the public certainly judges the ability of the candidate to implement the program. For example, Widodo’s economic action program in 2014 promised Indonesia was self-sufficient in food during the three years of its administration. Widodo even promised to stop food imports if he was elected. But until now the promises haven’t yet materialized. Therefore, the incumbent position is relatively more difficult in peddling its populist agenda because the public will compare it with its current performance.
As a challenger, the opposition can promise changes in economic conditions that are considered incapable of improving incumbents. At least the programs offered by the opposition are detailed to go straight to the heart of economic problems. Such as increasing people’s purchasing power by increasing the income limit not to be taxed and reducing income tax for private people. The opposition also promised land and building taxes for the first residential house to ease the burden of life for the peoples.
Opposition’s challenge is how to present communication message content that is different from before. Because the populist economic policy narrative and economic nationalism is a repetition of the 2014 Subianto discourse. Fortunately, he has representatives like Uno who are able to present the communication message. His idea to improve the household economy and also nationalize the “Ok Oce” program, for example, is a creative answer that has been waiting for the peoples.
Incumbent’s Suffering, Opposition Opportunity
The main problem with incumbents is how to account for the 2014 promises to increase economic growth by 7 percent. During his reign, only stuck at the level of 5 percent. Based on statistical data, since 2014 the national economy has only been able to grow at the level of 5.02 percent, far from the target of 5.5 percent. Then 2015 the economy actually dropped to 4.79 percent even though the target was 5.7 percent. In 2016 the target was 5.1 percent, but the realization was 5.02 percent. A similar failure occurred in 2017 which was only 5.07 percent of the target of 5.2 percent. The year 2018 is also the same, the target of 5.2 is only 5.17 percent.
The rapid development of infrastructure that is proud of the government, in fact, doesn’t significantly increase the rate of economic growth. Debt increases, even though the ratio of GDP is still safe, it does not cause a multiplier effect on the economy. The fiscal reform policy with the tax amnesty also has no effect in raising the tax ratio to GDP.
Therefore an effective new strategy is needed to raise the level of economic growth, even radical changes to the Indonesian economy to grow higher. It is necessary to strengthen the components of the domestic economy so that Indonesia can become the next big thing. This is a gap that the opposition can use on the debate stage.
Another thing is the matter of value added. Future growth must focus on the value added that can be given to goods and services. Indonesia can no longer rely solely on cheap natural resources sold on the market. Fluctuating commodity prices and the existence of trade wars between the United States (US), China are very vulnerable to affecting Indonesia which is economically included in the weak open economy.
Infrastructure that is built quite massively should not only stop “profit change”. It is necessary to think further about how the added value of the infrastructure will benefit the peoples. New industrial centers, for example, need to be opened more around the infrastructure location.
In addition, interest rate policies in the US greatly influence investment flows and exchange rates. Indonesia cannot just rely on raising interest rates continue to offset the strong state policies in the economic field, which will have a detrimental impact on economic resilience. Indonesia must immediately fix the current account that is currently negative by not only relying on imports.
It is true that inflation has been well maintained in the range of three percent lately. But if only increase the supply of goods by importing, it is less elegant in the short term for Indonesia’s current account deficit or for farmers, as well as in the long term towards the resilience of the Indonesian economy.
Next about growth and stability. Some world firms predict Indonesia, including a country with a strong economy in the future. But this can only happen with high economic growth. GDP growth in the range of five percent is certainly not enough to realize the dreams of these firms.
The challenge is the extent to which the government chooses between growth and stability. Lately, Widodo’s policy seems to focus more on stability. The growth of government debt seems to have not been radically impacted by economic growth. Inflation is maintained at three percent, foreign exchange reserves are maintained quite well, and interest rates raised quite high lately, indeed enough to maintain economic stability.
The trade-off is that economic growth is not high to improve the quality of life of the peoples. This is due to the opening of low-quality jobs where some Indonesian people work in the informal sector which is not safe for their lives.
Therefore, the focus should be on growth, which requires massive investment, especially in the industrial sector which is more productive in growing the economy. This is needed to absorb labor, where Indonesia gets a demographic bonus. Industry 4.0 is a challenge with automation. Digitalization which shortens the distribution chain is also very closely related to the workforce in it.
Seeing a number of problems in the economic sector, the opposition change to win the contestation is greater than the incumbent. The opposition’s challenge is to express clearly the government’s failure to manage the nation’s economy and provide creative and rational policy alternatives to solve it.
Swing and undecided voters who in the Voxpol Center Research and Consulting survey two days ago were 7.9 percent believed to be choosing the opposition. This group will determine the winner. With a 5.5 percent difference, in the survey, incumbents 48.8 percent vs. opposition 43.3 percent, if this group chose the opposition, Subianto-Uno won the presidential election with superiority of 51.2 percent.
Written by Lexy Nantu, Email: firstname.lastname@example.org