To grow fast a national economy needs a positive export-import ratio, substantial investments and considerable domestic consumption. While Dutch GPD grew a microscopic 0.2% both in Q1 and in Q 2 due to poor investments and declining domestic consumption, Indonesia keeps on showing promising, optimistic, positive figures in spite of a negative export-import ratio. Indonesian households benefited from a 6 to 7 % sustainable economic growth and got considerably richer last year, BI reported. The country actually is “the world’s second fastest expanding economy“, ABC’s Indonesian correspondent told his audiences.Though in the interview Sumitri, a man living in the slums, says he didn’t notice. A significant revelation.
In the national bank’s perspective only 22% of all Indonesians are poor now and 60 % is middle class already. By the bankers’ standards you are poor if you earn less than $ 2000 a year. You belong to the Indonesian middle class if your yearly income is between approximately $ 2000 and $ 6000. As soon as you get over $ 500 on your account each month they consider you to be rich.
The Hartati Murdayas, the Prabowos, the Bakries and the bankers of the country will agree I guess. They are among those who de facto do and did benefit. They are not just rich. They belong to a privileged class, they are in the league of a national elite of the super rich. The top notch of local banks for instance pay their darlings $ 1,25 million a year on average. The banks themselves may be less efficient than in any other ASEAN country, it’s more than what’s on the payroll of any of their colleagues over there. It’s also slightly over the in perspective pretty modest $ 6000 per year their middle class compatriots earn.
So being rich by the Bank’s definition and being RICH in the bankers’ ( and their peers’) personal practice, is a huge difference obviously. At least a factor 200 difference.
Not everyone agrees with BI’s rosy view though. Dr Hendri Saparini, economist for Econit, for instance frowns. In her view the Pareto-principle still rules: 20% of the population controls 80% of the country’s wealth. It’s even getting worse. Domestic demand by the wealthy happy few is driving the economic upswing, the gap with the poor is widening and poverty is not diminishing. I might add that the neo-liberal claim that wealth-accumulation at the top ultimately helps the poor by the trickling down effect, has been proven to be an ideological fallacy.
The upbeat Indonesian economy is remarkable and positive. It’s much more and much better than bouncing back after the ’98 crisis. But in the long run the developments of ongoing accumulation of wealth by very few only, may well be destabilising society. Yet it’s something which is inherent to capitalism. To change that correction by the state, by government is necessary. However redistribution of national income – for instance by steeper progressive taxation and mandatory social insurances for all citizens directed at better education for all, better public healthcare for all and social security for all – is not at the heart of political parties based on nationalism and religion. Yet these two are the overwhelmingly dominating political political philosophies in RI. Secular or not, populist or not, both are essentially conservative, not very much inclined to curtail extravagances and social injustices of capitalism.
Indonesia could do with something new. A strong progressive political movement. A powerhouse of visionary, innovative and practical intellectuals and politicians who are specifically concerned about socio-economic justice and realities. An alternative to economic, social and moral conservatism.
Alas, alas. Not even with he help of my binoculars I can see such a movement right now. So to benefit from Indonesia’s boom and prosper yourself, you better make sure you are very wealthy to start with.