The Cycle

As of February 2005, according to the Ministry of Economy, the unemployment rate has reached 10.26 percent, or 10,850,254 people out of the total of 105,802,372 people in labor force.

The data further shows the unemployment growth:
(a) 1,100,000 more jobless people in 2001-2002 period
(b) 687,000 more jobless people in 2002-2003 period
(c) 431,000 more jobless people in 2003-2004 period
(d) 600,000 more jobless people from Aug. 2004 to Feb. 2005

What do these figures tell us?

The massive unemployment in the country would only grow bigger with the current economy following the fuel price hikes on March and October.
- The skyrocketing inflation rate
- Weaker position of rupiah against the greenback.
- The central bank up its rate up to 12.5 percent to curb further depreciation of the rupiah

Looking at this declining trend of the country’s economy – at least until the third quarter of next year based on assumption made by the central back that the economy will rebound by the end of 2006 with inflation rate hovers at between 7 – 8 percent – what shall we do?

I believe we can contain the fast growth of unemployment by providing more job opportunities. Even in the developed United States, the newly elected Federal Bank Governor Ben Bernanke set a long term policy to strengthen the economy by creating more jobs and promoting the welfare of workers.

Look at this simple chart of the cycle of the economy:

FLOW:

1. The opening of job opportunities

2. More people in labor force

3. More tax generated

4. The increase of people’s purchasing power (keep in mind that 70 percent of what makes the country’s wheel of economy keep on turning is public consumption sector)

5. The growth of industries

Then return to flow No. 1

It is not impossible that the country’s economy can go stronger faster than expected if all economy ministries or institutions do their jobs well with full integrity.
1. The creation of job opportunities
-> Employers should not exploiting workers
2. More people in the labor force
-> The workers commit to work their best and set a common achievement of growing businesses.
3. More state income from tax
-> The tax officers should not abuse their authorities
-> The employers and workers pay taxes in time, not manipulating the numbers
4. Public consumption
-> The public are expected to spend their money smart and not become a mere consumptive animal
5. The growth of businesses, industries
-> The state executives and legislators as well as law enforcement officials promote the economy by promoting a certain, safe atmosphere for investment.

This way, our country can grow expansively in long term and can be immune to any external turbulence which all this time always affect Indonesian’s internal condition.

Go, Indonesia!

Thursday, Nov. 17, 2005, 4:08 p.m.