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Since the end of 1997, economy crisis that knocks over Indonesia has not ended yet. Presently, it becomes more crucial, attacks basic aspects of Indonesian economy deeply. Higher jobless rate and wider poverty reflect this situation. Furthermore, the crisis that is faced by Indonesia has emerged in the worst like hunger, malnutrition that sweeps out many areas in Indonesia during the last 5 years. Financial crisis through
Globalization in Indonesia means that a lot of Capital entered in every aspect especially about Indonesia’s natural resources which was the comparative advantages.
Globalization impacts in Indonesia must be worried in treating environments. Precious rain forests are under threat. These tropical rain forests are the second largest in the world with 500 mammal species. However, these precious resources are being rapidly destroyed by deforestation because the re-forestation fee has been spent for the airplane industry and the extension of cement industry and many forests are being burnt, causing air pollution to the surrounding areas
Based on Indonesia’s experience globalization make strong effects in human resources. People in Indonesia suffer grave economic conditions. Globalization makes the market economy under the control of no authority, where only those with purchasing power determine value. Corruption, manipulation, nepotism, and collusion which being there makes the economy and the country weak. Economic crises have led the common people to suffer.
In the other sides, investment comes in every side from foreign investment and domestic investment because of globalization era. Tariff and non tariff barrier which can be made in International Forum like WTO had been decreased. It means that Indonesian economy more open and will make competition in Indonesia’s society.

The trend of investment in Indonesia has been increased based on the data from Central Bureau Statistics;
Table 1. Development of Investment Realization (Permanent Business Licenses Amount)

This Investment phenomenon makes us happy because increase investment must be high economic growth and better welfare. But the reality in Indonesia is not as we see. Poverty eradication is not doing much, unemployment rate always high.

Source : BPS, 2008
Even tough this global financial crisis, which make Indonesia more suffer. What is the problem??? Globalization makes investment in Indonesia still inherited with colonial investment pattern with main natures of natural resources and raw material oriented, applying low salary system, export oriented and creating broad externality. This kind of investment has been long lasted in Indonesia since the colonial era until nowadays. In 1999 approx. US$ 3 billion was transferred to other countries as repatriation of the MNC’s . This transfer hits new investments. In the past it was evenly US$ 5-6 billion sent out the foreign banks. In 2000 almost US$ 2 billion was transferred from Indonesia’s stock market to other countries more than total of new investments. In crisis this transfer was US$9 billion/year. This will be the same analogy in Indonesia.
Overly openness in Indonesia caused by globalization which not supported with strong law of investment makes the investment just walking in the same place. In addition more foreign investment just for financial market which can make bubble economy so that people in Indonesia can not reach the rill investment which can be more employment, more income and good in services. Global crisis in Indonesia make rupiah become unstable like the table below;
This unstabilization of rupiah is caused of America’s crisis of sub prime mortgage and Obama’s election as the-44 president of US. America. This crisis makes strong impacts in Indonesia because America was one of the prime trade partners in Indonesia. The crisis in America means decreasing of import demand and makes the export demand in Indonesia decreased. Moreover, America have 60 % trade stock in global trade which can make domino effect of all countries such as Japan, Europe, China, etc. They are the main trade partner of Indonesia too. Indonesia export demand and the domestic demand decrease all at one because this financial crisis. Nevertheless, Indonesia societies become suffer too.
The solution of this condition is how to attract investor’s interest, primarily foreign investors to increase investment, export, and national income. One of the efforts is provide rules in law forms that can take sides and promise big advantages for investment activities, both direct investment and trade activities (export/import).
In the government as policy maker, amendment investment law urgency is not must due to the large number of investors who transfer their capital from Indonesia to abroad. The efforts are simultaneously carried out to increase trade by free trade instruments, in coherence with neo-liberal doctrines ensued by big capital owners, mainly multinational companies that recently become the world economy leaders.
It means that all the policy in law investment must be suitable for Indonesia society. Not just concern about how to make strong investment but also increasing prosperity in our nation in Indonesia.

1 comments

Berly mengatakan... @ 22 Februari 2009 22.57

should also analyze cost of starting and doing business as entry barrier.

I mentioned them at this article:
http://www.thejakartapost.com/news/2009/02/10/where-have-all-businessmen-gone.html

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