What Indonesia Could Have Been With Yudhoyono’s Plan,
Pitan Daslani September 02, 2012
On Oct. 19, 2004, the day before President Susilo Bambang Yudhoyono was sworn in as Indonesia’s first democratically elected president, a local newspaper published my analysis of a theory presented in his doctoral thesis.
Yudhoyono’s theory was that poverty and unemployment are best overcome through agricultural and rural development, and that enhancement of these should constitute the core of Indonesia’s economic development.
He believed this would help the country become more self-reliant, and would and lessen the need for international aid.
With this socio-economic plan, which I then named as “Yudhoyonomics,” the newly-elected president could allocate more of the state budget to agriculture and rural development programs with the goal of generating employment and reducing poverty.
Had Yudhoyono’s plan been faithfully implemented, including the modernization of agriculture infrastructure and a massive focus shift to rural-based, rather than centralized, development, Indonesia would now be a shining example of an agriculture-driven economy. The plan would have created a U-turn in urbanization, causing people to go back to their home provinces instead of adding to urban overpopulation — and the problems that accompany it — in the major cities.
Theory and reality
But eight years after the Yudhoyonomics theory was presented, little has happened.
Unsustainable urbanization is still a problem. People continue to crowd into Indonesia’s major cities despite the establishment of regional autonomy laws, which give local governments more resources to look after their residents. The central bureaucracy lacks a committed focus on agriculture and rural development.
As a result, the excellent Yudhoyonomics theory remains just that, despite the fact that its creator has been in office for eight years. At this point, I doubt if anybody else will follow it up.
What is happening is a disappointing paradox.
People from rural areas are still streaming into big cities to find jobs because rural development planning is not reliable, even as the government introduces programs such as the Master Plan for the Acceleration and Expansion of Economic Development known as MP3EI, which is supposed to connect the country better and improve 22 areas of economic activities and six economic corridors in the entire country.
The fact is, millions of rural immigrants have difficulty competing in the job market due to a lack of education and expertise, so the women go abroad to work as domestic workers and the men work in the informal urban sector, which gives them no hope of bettering their lives.
The price of neglect
Currently, the agriculture sector is being abandoned and this historically agricultural country now relies heavily on imports. Before we know it, our rice fields will disappear and other nations will fill our stomachs with the knowledge they learned from us.
This is a disappointing trend, as in 1985 the UN Food and Agriculture Organization recognized Indonesia’s “rice self-sufficiency record,” the country’s ability to grow more than eight tons of rice per hectare, enough to feed the entire population.
Today, Indonesia desperately imports rice, corn, all kinds of fruit, and even salt. This is an archipelago, so it’s impossible for us to run out of sea water, the basic material for making salt.
Falling short of expectations
As I was browsing through my 2004 diary, I found notes about people’s high expectations for Yudhoyono right after his dissertation was made public. There was hope that having a president with such an advanced agriculture degree meant that Indonesia would soon become a model for advanced agricultural and rural development planning.
The opposite is happening today.
Yudhoyonomics also advocated fiscal policy corrections with mentions to broadening the tax base and increasing domestic revenues, while reinvigorating local industries by protecting them from the greedy free market.
In terms of tax collection policy, the government is moving in the right direction, it is predicted to collect some Rp 1.7 trillion ($178 million) next year.
Yudhoyono’s economic theory highlighted more responsible government debt management. The president promised, if necessary, to attend top-level decision-making meetings with foreign donors to negotiate debt settlement in a dignified manner without appearing submissive to donors.
It was against that backdrop that Yudhoyono announced then that he would shun more cooperation with the International Monetary Fund, whose economic recovery therapies pulled Indonesia deeper into crisis, according to some.
In the present day
Today, everyone is talking about the government’s achievements without realizing that in the globalized world, a country’s progress is influenced by so much more than a government’s policies. Success depends greatly on contributions from the private sector and civil society.
There is little we can say about whether Yudhoyono’s excellent dissertation actually had any real impact on the development of Indonesia’s agriculture-based economy. Much of the progress has been driven by the autonomous financial and service sectors, but the actual labor-intensive agricultural work has largely been abandoned.
A good question to ask is, does Yudhoyono still remember that he had once introduced a wonderful pro-growth and equity theory?
If he doesn’t, it might be because he’s too busy coping with fussy politicians who only take from, rather than contribute to, the nation.
If he is that lost, somebody please remind him now.
The government must now shift its focus to the regions instead of continuing to funnel state funds and resources to Jakarta. In other words, much of the bureaucracy must be spread out to the regions in line with the spirit of decentralization and regional autonomy.
What is happening now is the opposite of the decentralization policy. Some of the government’s power has been delegated to the regions, but the bureaucracy in Jakarta is still as large as ever and is even growing to accommodate the glut of vested interests.
This is why Yudhoyonomics cannot work and the excellent dissertation that Yudhoyono presented to the professors in Bandung has only remained in the library.
ma 3 sep 2012 - 8:00
