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Economics and Business
14-11-2016
By: Wira Arif Budiman
Implementation of Economic Liberalism in Indonesia: Compatible or Incompatible?
Basically, liberalism does not aim to make a country's economy into crisis. There are some things in liberalism that have a positive impact for the people,such as fostering creativity, innovation and initiative in taking advantage of opportunities. Everyone is free to have his or her own production resources. Moreover, competition makes the goodsthat sold to the market has a high quality and competitive prices, so that consumers have many options to buy what they want.

Furthermore, the system of economic liberalism allows everyone to have the same opportunities in trade. Anyone has the right to conduct economic activities without any hindrance from any party, including the government. It makes the people to peddle their goods production abroadeasier to seize the global market.
 
However, the economic system of liberalism is now much different from its original purpose. Since the last few decades, liberalism has been devastating to society because the main goal of the employersareonly looking for profit as much as possible in any way without thinking about the social and environmental impacts. The employers pay the laborers cheaply and by contract system. As a result, the laborersare difficult to get prosperity and they can be dismissed without allowances anytime. Moreover, there are several companies that hold the original certificate for anyone who wants to apply for a job. If they resign or are dismissed before the contract is expires, they must pay a fine with huge money. Is this not tantamount to a new slavery in the modern era?
 
On the other hand, liberalism can also decimate local businessmen because of the competitive price. In the case of Indonesia, the price of local rice is more expensive than rice imported from Thailand. A similar caseisthe imported cows from Australia, India, and any other countries,which price is cheaperthan the local one. As a consequence, the local formers and breeders cannot achieve welfare until today. That is why many people from the villages migrate to cities area to seek for new job.
 
Beside, in the field of energy and natural resources in Indonesia, foreign investors such as oil, coal, geothermal and mining, control most of the companies. Liberalism allowsthem to freely explore the resources and sold it all at high prices, while the tax that they pay to our country is very low compared to the profits that they earn. Moreover, they can also manipulate the data by making fake reports, so the gains that they get are smaller than it is. On the other hand, the government has not made the maximum safeguards to protect local investors; insteadthe government is not effort to prevent the liberalism system seriously. Policies implemented by the government is actually contrary to the constitution which states that the earth and water and natural resources contained in it are controlled by the state and utilized for the welfare of the people. This is one reason why many people oppose liberalism.
 
Liberalism is one of the main factors, which cause the economic crisis that occurred in Indonesia. Liberalism only benefitsa few parties only (mostly the capitalists), while the people who should be the object of development are not prioritized. The concept of economic liberalism is now triggering a sense of injustice of society, because the capitalists could easily monopolize market. In addition, they can withdraw their investment suddenly if the economic situation in a country is unstable. It has been proved in the history of Indonesia when economic and monetary crisis in 1998. In the end, this makesthe gap between the "rich" and "poor" is wider. Curiously, although liberalism is one of the root problems of this country, the government seem yet be able to cope with it since it still exist politically until today.
 
Therefore, to overcomethe problem, there are several steps should be done by the government. First, the government should consistently implement the mandate of the Constitution Article 33 Paragraph 2. Second, the government should provide greater incentives to local entrepreneurs, especially those who related with the basic needs of the people. Third, the government must take back the natural resources currently held by foreigners in time (e.g. Freeport whose contract expires in 2019). Fourth, the government should increase surveillance to prevent monopolization done by the foreigners. Fifth and last, the government should be more massive to campaign for the use of domestic products to the people of Indonesia through both print and electronic media.
 
 
*) The writer is a Postgraduate Student of International Relations, the University of Indonesia (UI).
 



 

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