Menanam Bibit, Menyemai Kehidupan... Jambore Keadilan Iklim 3 - 2004

Jambore Keadilan Iklim kembali terseleggara untuk yang ketiga kalinya.  Kegiatan yang digagas oleh Laskar Hijau dan didukung oleh komunitas-komunitas pecinta alam se Lumajang Raya seperti Vabfas dan Gowa serta PA SMA/SMK se Lumajang serta berbagai komunitas peduli kelestarian hidup seperti Warga Wotgalih Menolak Tambang Pasir Besi dan berbagai Organisasi Masyarakat Madani lainnya.  Jambore kali ini bertempar di Pantai Wotgalih, di lokasi bekas tambang Pasir Besi milik PT Aneka Tambang (Antam) dilaksanakan pada hari Sabtu dan Minggu, tanggal 26--27 April 2014.  Peserta yang hadir bukan saja dari Komunitas Pecinta Alam seperi Laskar Hijau, Vabfas, Gowa, Dippa Candra Wijaya, dan berbagai komunitas PA lainnya.  Peserta juga bertambah dengan datangnya rombongan dari Al Falah Islamic Course (FIC) Sidoarjo, Karang Taruna Desa Siwalan Panji Kabupaten Sidoarjo, serta Universitas Ma Chung Malang.  Serta tentu saja beberapa simpatisan dari berbagai kota yang salah satunya dari datang dari Kota Solo.  Pelaksanaan jambore kali ini mendapat dukungan dari Badan Nakotika Nasional (BNN) kabupaten Lumajang, yang pada kesempatan kali ini melakukan sosialisasi mengenai bahaya penyalagunaan narkoba.

Berbagi Pengalaman dan Diskusi
Kegiatan yang secara resmi dibuka arahan dari Pak Lurah Wotgalih dan dari Koramil dilanjutkan dengan sosialisasi BNN, menjadi hangat bukan karena pesan-pesan dari para petinggi dan petugas, tetapi karena berbagi pengalaman dari salah seorang anggota Dewan Penasehat Profauna, juga berbagi pengalaman dari salah seorang Yayasan Kota Kita Solo, dan antusiasme dari Pak Lurah Silawan Panji, Buduran, Sidoarjo.
Sesi berbagi diskusi diawali oleh Daniels dari Profauna yang menyoal arti kata Pecinta Alam yang sebenarnya.  Diakatannya, selama ini kawan-kawan Pecinta Alam hanya terjebak pada hobi berpetualang di alam ketimbang aktivitas kepecinta alaman yang sesungguhnya.  Kebanggan mengibarkan bendera di puncak gunung seperti menjadi puncak kebanggaan kawan-kawan penghobi kegiatan alam.  Seharusnya pecinta alam juga melakukan konservasi, bukan saja menikmati indahnya alam tetapi juga harus menjaga dan merawat alam dengan melakukan konservasi, baik hutan, lautan, dan segenap isinya.  Bahkan, seharusnya pecinta alam juga turut aktif melakukan kegiatan kebencanaan, karena keahlian dan kekuatan bertahan di kondisi yang terbatas ada pada kawan-kawan Pecinta Alam.  Layaknya seperti seseorang yang jatuh cinta pada kekasih hatinya, tidak akan hanya menikmati, melihat, membelai, atau bahkan mengecupnya saja tanpa memberikan perhatian.  Tidak akan ada pasangan yang mau hanya dijadikan obyek tanpa diperhatikan, entah diajak jalan, makan, nonton, atau ekspedisi bareng.  Juga kalau sakit atau kurang enak badan, masakan didiamkan saja tanpa diperhatikan, dirawat, dan berusaha setengah mati untuk kesembuhannya.  Demikian pula pecinta alam, seseorang yang cinta alam, tidak mungkin hanya menjadi penikmat indahnya alam atau kebanggan diri untuk menundukkan kerasnya alam.  Pecinta Alam sejati akan turut serta merawat keindahan dan kelestarian alam, bahkan saat terjadi bencana akan turut aktif berpartisipasi laksana merawat sang kekasih yang sakit.  Selain itu, disampaikan juga bahwa Profuna bukan hanya sekedar pecinta binatang tetapi merupakan organisasi yang peduli terhadap kelestarian satwa dan hutan sebagai habitatnya.  Dengan tajuk "lebih indah di alam", Profauna peduli terhadap kelestarian satwa dan habitat serta eskosistemnya, termasuk manusia yang ada di sekitar hutan dan bahkan seluruh penduduk bumi.  Profauna akan selalu menentang dan melawan perburuan dan perdagangan bahkan pemeliharaan satwa liar dan perusakan hutan baik pengambilan kayu maupun perubahan fungsi hutan untuk pertambangan dan perkebunan kelapa sawit.  Bahkan Profauna juga menentang pemeliharaan satwa dilindungi ataupun satwa peliharaan tetapi tidak memenuhi syarat kesejahteraan satwa, apalagi eksploitasi satwa untuk tontonan seperti sirkus satwa dan bahkan topeng monyet.
Sesi selanjutnya disampaikan oleh Ian dari YKKS tentang bagaimana penataan Kota Solo yang menuju kota hijau.  Solo melakukan penghijauan masif di berbagai pelosok sekaligus menata ulang kota menjadi ramah lingkungan dan hidup selaras dengan alam.  Dengan visi menjadikan Solo Kota ditengah Hutan, Pemkot Solo dan masyarakat Solo berjuang untuk menjadikan Kota Solo menjadi kota yang hijau, lestari, dan selaras dengan alam.  Pembangunan kota yang sejalan dengan konservasi alam.  Setelah itu, Pak Lurah Siwalan Panji, Sidoarjo menceritakan tenatang desanya yang terkepung oleh pabrik dan banyanya sekolah.  Bukan hanya masalah macet dan kecelakaan, tetapi juga perubahan fungsi lahan besar-besaran, serta tentu ada pengaruh sedikit terhadap perubahan perilaku warga setempat.  Pak Lurah bekerja bersama dengan Karang Taruna dan didukung oleh Al Falah Islamic Course (FIC) berusaha menghijaukan kembali desanya dengan gerakan kerja bakti dan penghijauan, serta melakukan teronosan lain seperti mendukung FIC yang akan menjadikan Siwalan Panji sebagai Kampung Sinau serta menggagas Festival Kampung.  Terobosan yang dilakukan bukan saja melakukan konservasi lingkungan tetapi juga konservasi budaya.
Diskusi berlanjut sampai dini hari, terutama kehausan kawan2 Gowa Gucialit untuk menjaga lestarinya perkebunan teh dan juga 3 air terjun yang ada di dalamnya.  Bukan semata untuk perkebunan, tetapi untuk kehidupan rakyat Gucialit untuk menjadikan desanya menjadi desa mandiri, hidup selaras dengan alam dan mendapat manfaat ekonomi karena alam memberikan hasilnya untuk manusia-manusia yang menjaga lestarinya bumi.  Disepakati, Gucialit bukan menjadi desa wisata tetapi desa mandiri yang tidak perlu merubah apapun baik secara fisik maupun perilaku warga, tetapi menjaga kelestarian kearifan lokalnya, bahkkan membangkitkan kembali budaya dan kearifan lokal yang sudah nyarsi hilang untuk menjadi kekuatan dan nilai luhur rakyat.  Bila alam lestari, kearifan lokal lestari, budaya dan adat istiadat terpelihara, bukan rakyat menjadi obyek dan etalase wisata, tetapi orang datang untuk belajar dan warga Gucialit akan menjadi guru-guru kehidupan bagi banyak orang lain.  Wisata alam akan berubah menjadi wisata budaya dan wisata belajar, bukan saja menjual kecantikan alam tetapi menyajikan nilai dan mengajarkan keluruhan pada banyak orang.  Bukan tujuan ekonomi yang diutamakan tetapi menjaga lestarinya bumi dan nilai yang terutama, dan bumi yang akan memelihara, bukan sekedar cukup bahkan berlebih.

Menanam Bibit, Menyemai Lestarinya Hidup
Acara puncak dari Jambore Keadilan Iklim adalah menanam bibit pohon, karena menanam bibit sama dengan menanam harapan untuk kehidupan yang lebih baik.  Sekitar 200an orang peserta Jambore memulai menanam bibit pada pukul 09.00, pada saat matahari lumayan tinggi yang panas terasa cukup menyengat.  Sekitasr 200 bibit ditanam di seputaran pantai Wotgalih untuk menjadikan kawasan bekas tambang menjadi hijau.  Bukan saja secara simbolis tanda perlawanan dan penolakan terhadap tambang, tetapi kembali menghijaukan kawasan tersebut sebagai kawasan air payau, kawasan tempat ikan berkembang biak juga kepiting hidup, bahkan sesekali menjadi tempat mendarat penyu bertelur.  Pantai Wotgalih akan dikembalikan menjadi habitat air payau yang dulu pernah ada dan dirindukan kembali oleh rakyat Wotgalih.  Konservasi alam yang sebenarnya bukan semata tujuan ekonomi, tetapi konservasi bagi kehidupan lestari desa, yang tanpa harus dieksploitasi dan dipaksa dengan dirusak dan diperkosa untuk menghasilkan gemerincing recehan rupiah, sedangkan gebokan uang menjadi milik investor atau bahkan negara sekalipun.
Setelah menanam acarapun selesai, dan setelah beberapa evaluasi kecil, disepakati pada tahun depan, tahun 2015 mendatang, Jambore keadilan iklim kelima akan dilaksanakan di Candipuro, diharapkan dapat dilaksanakan di Hutan Bambu, dengan panitia lokal dari kawan-kawaan DIPPA Candra Wijaya.
Dengan bersalam satu dengan yang lain, para peserta berpisah satu dengan yang lain dengan harapan untuk kembali berjumpa di tahun depan dan bekerja bersama, berkarya bersama untuk bumi yang lebih baik.  Kawan bertambah, jaringan meluas, semoga semakin banyak orang sadar pentingnya lestari bumi untuk kehidupan yang lebih baik. Selamat berjuang dan bekerja kawan-kawan semua.

Salam Hirua Hidup Hijau
Malang, 28 April 2014
  

POST GRAUDATE COURSE ON SOCIAL AND ECOLOGICAL MARKET ECONOMY – KONRAD ADENAUR STIFTUNG & UNIVERSITAS PARAMADINA

Latar Belakang

Dr. Jan Woischik (Head of Office, KAS Indonesia and Timor Leste)

Konrad Adenaur Stiftung (KAS – www.kas.de/wf/en/), a German political foundation with offices in more than 80 countries worldwide, the principle of Social Market Economy is one of its core beliefs both domestically as well as regarding our international cooperation.  We are convinced that the teachings of the Social Market Economy lay the groundwork for a relationship between economy and society that allow for personal freedom and economic success while guaranteeing protection from radical economy influences.  The overwhelming success story of Germany’s economic, social and political development over the last 60 years only proves us right.  Globally, too, the Social Market Economy may be a guiding principle for how to combine economic growth and success with social balance.  With growth rate rising in more and more countries worldwide, the question of how to distribute wealth in a just way may only get more pressing.

Hence in this course is designed to make familiar with the principles and core beliefs of Social Market Economy.  For this aim, we proudly announce that we were lucky to have Professor Marcus Marktanner from Kennesaw State University (USA). He has been a renowned expert on Social Market Economy.  He has been so kind to provide a basic reading that you can find below.  We ask you to have looked at it prior to your participation in the course.  In order to discuss the Indonesian economic model and potential ways of how it could benefit from Social Market Economy.

Anies Baswedan, Ph.D ( Rector of Universitas Paramadina)

The collaboration of Universitas Paramadina and KAS has made this workshop possible to promote SEME understanding among Indonesian scholars.  As one of many economy concepts, SEME proposes an alternative concept to policymakers around the world.  We have been familiarized with two poles of economy ideology: socialism and capitalism.  We see the fragility of capitalism market economy form the crisis in North America and the Europe. SEME emphasizes the balance role of government, private sector, and the community.  We learned from the previous workshop in 2009-2010 that SEME has similarity with Pancasila Economy.

We hope the workshop will enlighten you about SEME.  Keep in touch with your fellow participants after this workshop including through social networks such as blogs, facebook, and twitter.  We will be more than happy to facilitate future engagements among the participants. 

 Waktu, Tempat, dan  Penyelenggara

Bandung, November, 19—23 2012.  Padma Hotel Bandung. Konrad Adenauer Stiftung (KAS) Germany and Paramadina University (Indonesia) 

Rincian Kegiatan

H1 (November, 19 2012)

Registration and welcome reception

H2 (November, 20 2012)

Opening Speech (Anis Baswedan, Ph.D, Rector of Paramadina University)

I. The History of Social and Ecological Market Economy

1.      The Social and Ecological Market Economy from a Historical and Comparative Perspective (Prof. Marcus Maktanner)

2.      Group Discussion: Stranded on a lonely island of how to create a political constitution.

3.      The Social and Ecological Market Economy: A Model for Indonesian Development (Prof. Dr. Ir. Eriyatno, MSAE – Intitut Pertanian Bogor)

4.      Video: Comanding Heights: the Battle for Ideas

H3( November, 21 2012)

II. The Role of the State in the Social and Ecological Market Economy

1.      Principles of Indonesia’s Development Success Revisited (Dr. Nuri Effendi, SE, MA, Dean of Economic Faculty of Padjajaran University).

2.      Group Discussion: How to create an economic constitution.

3.      Principles of Policy in the Social Market Economy (Prof. Marcus Marktanner).

4.      Video: Inside Job

H4 (November, 22 2012)

III. It’s Just Social and Ecological Market Economy, not German Social and Ecological Market Economy

1.      Social Market Economic Through in Ibn-Khaldun’s Teachings (Prof. Marcus Marktanner)

IV. Market Freedom With and Without Equitable Social Development

1.      How Equitable Social Development Increases Market Freedom and Efficiency (Prof. Markus Marktanner).

2.      Video: Life and Debt

H5 (November 23, 22 2012)

V. Will the Global Economic Crisis Lend Social and Ecological Market Economics a Louder Voice?

1. How Indonesia Weathered the Crisis Storm Since 2008 (Prof. Dr. Djisman S. Simanjuntak, Executive Board of Prasetya Mulya Foundation and Board of  Directors of CSIS).

2. In Light of Recent Food, Fuel, and Financial Crisis, is classical Economic Liberalism still Feasible?

3. Video: An Inconvenient Thruth

Closing Speech: Totok A. Soefijanto (Deputy Rector for Academic, Research, and Student Affairs of Paramadina University)

                                  

Ringkasan Materi

Opening Speech (Anis Baswedan, Ph.D, Rector of Paramadina University)

SEME: Capitalistic approach meets with socialistic approach.

Indonesia founded by the Social Market Economy called Ekonomi Kekeluargaan dan Gotong Royong by Moh. Hatta.  Explicitly in 5^th Sila of Pancasila, the social justice, the first priority to build the Indonesia’s economy.  Prof. Mubiarto called the Indonesia’s Economic System as “Ekonomi Pancasila”.

The challenges is transform and translate “Ekonomi Pancasila” to the model, equation practice in economic.

I. The History of Social and Ecological Market Economy

1.1  The Social and Ecological Market Economy from a Historical and Comparative Perspective (Prof. Marcus Maktanner)

SEME = Free Market + Equitable Social Development

SEME is similar with Moh. Hatta’s economic concept of Indonesia.

SEME is different with USA economic development, higher growth but not equal.

1)      The two questions after the World War II

a.       Social question of industrialization, Weimar Republic, Great Depression, and Nazi Terrror.

b.      The economic model that allows Germany to reconcile.

2)      A schematic overview

		1776		1820		1867

 

 

3)      The legacy of the classical liberalism

Ø  St. Ambrose (367): The Damnable - Private properties as damnable.

Ø  St. Agustine (354—330): The Balance - Find out how much God has given you and from it take what you need, the remaind is needed by others.

Ø  John Scotus: Erigena and Anselum – Self-restraint and the sub-ordination of state.

Ø  Nominalist:

Ø  Adam Smith (1723—1790): Moral Philosophy – use scare resources wisely.

4)      The legacy of the Social Question

No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable (Adam Smith).  Individual vs State; Socialism vs Liberalism; Idealism vs Realism.

Karl Marx (1815—1583): Abolish all private property.  Capital vs labour.  Neglecting human capital.

Otto von Bismack (1815—1898): The first social security law.  Safeguarding individuals from market failure (Social Market Economy).  Not abonding the market but correcting the market failure.

5)      The legacy of the Christian values

Catholic Social Teaching:

·         Pope Leo (XIII) (1810—1903)

Individuality + Solidarity + Subsidiarity à Rerum Novarum (1891).

Each needs the other, capital cannot do without labor, nor labor without capital.

·         Pope Pius XI (1857—1939)

Anti-communist stance.

6)      The legacy of the Weimar Republic

·         Episode 1 (1918—1923)

Build the big industries (steel, chemical, and mining) to bring up reparation payments after world war I.  Tax collected through the creation monopoly rento and the curtailment of citizen sovereignty. State corporatism.

Industrial sector seen as part of the state.  Government build up the protection for big company from competition and gives the monopoly.

·         Episode 2 (1923)

Great depression and hyper inflation

·         Episode 3

Post hyper-inflation recovery and 1929 crash.

Dependent on external factors.  Economic Slump and the rise of Hitler.

Wilhem Ropke (1899—1966): The capitalism that anti capitalists rail against was not free market capitalism but state corporation.  Government as the business partnerships.  The first enemy of Hitler and Nazi.

Ropke is the early of Social Market Economy, called “Free Humane Economy”.

7)      The value system from a comparative perspective

	Liberalism	Socialism	Social Market Economy
Allocation (Inputàprocessàoutput)	Market	State	Market
Distribution (The processor)	Market	State	Market
Capability (use scare resources and build the social development)	Market	State	State

(Uweller-Armack): “SME is Ensure the policy. Allocation through market, distribution through market, but qual opportunity. Freedom in the market with the balance social development”.

Discussion:

Globalization:

1^st wave: State globalization

2^nd wave: Corporation

3^rd wave: Digital era (individual)

·         Social development and social change arrange by the individual.

·         Individual entering the market and make some change.

·         No problem with SEME.

SEME is the market liberalism plus correcting the market failure.  Add some normative approach to fix the market failure with the political policy.

Ibn Khaldun and the social arab country is similar with SEME.  Individual freedom and social development in the solidarity spirit.

Note:

Indonesia is liberal economy country, high economic growth and high inequality.

1.2  Group Discussion: Stranded on a lonely island of how to create a political constitution.

1.      How determine your government?

2.      How do you make sure that development is equitable?

3.      How do you take care of the poor and vulnerable?

4.      How do you avoid corruption?

5.      How do you make sure that there is no inflation?

6.      How do you protect natural resources?

1.3  The Social and Ecological Market Economy: A Model for Indonesian Development (Prof. Dr. Ir. Eriyatno, MSAE – Institut Pertanian Bogor)

The Strategy to Improve the Wealth

Learn from The Black Monday (October 19^th 2008)

·         Stock fell 23%,

·         Bank Bailout IDR6.300Trilyun,

·         Crisis cost (US Government) IDR18.000Trilyun

·         Anti-Wall Street and Greece

·         Insolvency but not illiquidity

Global crisis à Casino economy à Bubble economy because of the securities and derivative.

 

 

Economic Model:

Y  =  C + I + G - T + ( X – M )

Y: GDP or GNP

C + I: Household

G – T: Government

(X – M): International transaction

Comparative Economic System

The economic system that based on local wisdom, people orientation, and serve to build a better life for everybody.  It is not just capitalize the capital and search for earning only.

The Idea to build the good economic:

a.       Build a strong economic policy.

b.      Build the economic resilience.

c.       Build the self-resilience community.

d.      Build ad good taxes to make the proportional sharing.

e.      Financial market restructuring.

State Resilience

·         Build the home industry

The economic based on production system not the trading system.  The product made from production process that give the added value from raw materials.  The production done in household not from factory.

70% of home industries are women.  The products are hand-made and unique.  The products based on local wisdom.

·         Small Medium Enterprise based on Technology

The youngster are the prospective solution to build the Comparative Economic System.  The SME based on technology push the creativity and innovation of the youngster.

·         Entrepreneurship

Tri Sakti by Soekarno:

·         Economic independency;

·         Political independency; and

·         Good Character in Culture.

1.4  Video: Commanding Heights: the Battle for Ideas

After the World War 1, the battle of economic idea are between (1)Keyness: The Economic Consequences of Peace (Cambridge, London, England) versus (2) Hayek: Market Works but Government Don’t (Austrian School) versus (3) Lenin: State Controlled Economy (Leninism Economic).  Free market versus comanding heights of the economics.

·         1923, Hyper- inflation in Germany.  A glass of beers is 1millions Reich mark, a shoes is 23millions Reich mark.

·         October 24^th 1929, US Capital Market crash and fell down.  Hal of banks in USA closed.

·         1931, Europe, failure of capitalism.  Keyness: the collapse of capitalistic economic and the democratic government.

·         1933, Hitler elected as the first Chancellor of Germany.  Roosevelt: regulating the capitalism through Commerce Commission to regulating the industrial.  Bring the people to work.

·         1936, General Theory (Keyness) Government spend the money to reduce employment, giving back the purchasing power to the people.  Work very well in UK and USA.

·         1941, World War II, Hayek (1944), too much government control too much power for government.  Rejected the Keynes’s idea with the book “The Road of Serdorm”. 

·         1945, the Post WWII Economic, Bretton Wood, New Hampshire declare World Bank (WB), International Monetary Fund (IMF).

Churchill	Truman	Stalin
Set up the New Order.  Different economic policy, different way.  Fragmanted Europe snf World in 3 groups
Hayek	Keynes	Marxist-Stelinism
Defeated by the labor party (Socialist).  Anglo Saxon Style and welfafre state	Capitalism and free market	Scientific socialism Planned economy and equalitarism
Erhard (1948)
Free market economist by Hayek.  Free Floating Prices.  Germany Social Market Economy.

·         1947, India free from Great Britain imperialism.  Commanding heights of economy or central planning economy (Mahalanobis Model) plus heavy industrialization (investment). 

·         1950, Chicago (Workshop System).  Chicago School of Economics (Friedman) with the Liberalism Economic (influenced by Hayek) versus Yale University (Keynessians) influencing the USA economic policy.  American Dream Economic.

·         1971, Stagflation (by Hayek).  Stagnation in economy plus high inflation plus high unemployment.  USA use wage and price control policy by Nixon, UK use mixed economics (wage and price control and anglo saxon socialism).  Rethinking the conservative system and introduce the Hayek free market system.

·         1974, Hayek won the Nobel Prize.  Free market system replacing the Keyness economic system.  UK introduced by Margareth Thatcher.  USA still runs the regulated capitalism (high inflation and high unemployment).  Jimmy Carter change the system by deregulating the air travel industry.

·         1979, Margareth Thatcher elected.  She Introduced the free market to replace the conservative economic system (Keynessians).  Jimmy Carter (USA) changed the Keynessians system to the Austrian School of Economic by replacing the Federal Reserve Chairman with the Hayek’s Disciple. Than Ronald Reagan elected and changed the USA system with the Hayek and Friedman free market system.  

·         1982, The US free from high inflation (Reaganomics).  Low tax rate, low government expenditure, and regulated to free market.  Great Britain reduced the subsidies, especially in coal mining industry. The Socialist Worker Union did not agree and make riot for a year.  Thatcher won the war like won the Falkland war.  Privatization of all public service companies.

Free market win and commanding height the economic system (Reaganomics and Thachernomics).  Hayek and Friedman win against the Keyness and Mar-Lenin now a day, what about next year?

Commanding Heights

Note:

Social Market Economy  =  Free Market + Social Development.

II. The Role of the State in the Social and Ecological Market Economy

2.1.Principles of Indonesia’s Development Success Revisited (Dr. Nuri Effendi, SE, MA, Dean of Economic Faculty of Padjajaran University).

 

There is no extreme left or right.  Almost of the countries in the world implementing the mixed economic, except north corea.

Background:

Now a day:

1. Europe unfavorable à debt trap.

2. Global economic slowdown, even China and India.

3. Indonesia is still experiencing a good and strong economic growth (6.3%).  Good prospects and challenges.

Global Economic:

2008: US, Japan, and Europe dropdown to minus.

2010: Back to positive but not high enough.

BRIC: 10 years positive growth.

2011: GDP and fixed asset investment drop down from 12% t0 7.6% (Bloomberg).

G7 become G20: the role of BRIC and ASEAN.  Developing countries catch up with the high growth.

Note: Now a day, Rupiah depreciated by design to push the export, because of deficit currency (import > export).

Indonesia Economic Growth:

Consumption dominated the economic growth in Indonesia.

Soekarno Era: Command Economic, sovereign the hyper-inflation (600%).

Soeharto Era: Free market and investment (developmental).

SBY Era: Consumption era. Informal sector push economic growth.

Note: Underground economy now a day is more than 17% of the Indonesia economy.

Macro economy = ( Income + price + employment) + (distribution + poverty + environment).      

2.2.Group Discussion: How to create an economic constitution.

Build the constitutions:

1)      Interfering the government.  What do you think?

2)      What economic problems? Does the state not tolerate? Why?

3)      How do you solve the problem?

2.3.Principles of Policy in the Social Market Economy (Prof. Marcus Marktanner).

The Economic problem that government interfere:

1)      Market power (price maker) and abnormal labor supply functions (monopoly).

2)      Against the monopolistic systems, cartels, and market barriers in perfect competition.

3)      Unequal social development (income distribution).

4)      Environmental problems (externalities).

Economic Problems in the Emerging Country:

1)      Public Sector economy: Education, health, and public service (human capital investment).

2)      Unfair competition: big company versus traditional market, MNC versus SME.

3)      Protection for public goods: rice, gas and oil, electricity, etc.

4)      High cost economic: deregulations and law enforcement, bad infrastructure, corruption and bribery.

5)      Externalities: income distribution, natural resources management, environmental problems, and social conflict (fair distribution).

6)      Support to the local genius industries and empower local economic.

Classical Economic	SEME
Allocation: market constituting principles	Income redistribution + fixed the market failure + equal development

 

SEME: State Constituting Principles

1)      SEME Witnessed: Germany hyperinflation (big companies and banking industries developed substantial market power to Nazi) and Stalinism.

2)      Subsidiarity: Pope Pius XI (1857—1939).

3)      Safeguards of the individuality principles (Walter Euken, 1891—1950)

è Free price, free trade, free contracts, private property right, private liability, price stability (independent control bank), predictability of economic policy.

è Ordo liberalism.

4)      Market constituting principle: Regulatory Principles

a.       Abnormal Labor Supply Function

Fear that reconstruction generates abnormal labor supply functions.

High labor supply à low wage à high working hour (to earn enough wage).

b.      Unequal Economic Development

The market does not guarantee equitable social development unless people have access to: equal opportunities and equal capabilities.  Need investment into social mobility.

Note: Inequality implies social costs (crime, diseases, decay of public infrastructure).  Public investment in social mobility surely will pay a social dividend.  Need political will and government intervention.

c.       Market Power

Cartels, associations, and chambers.

d.      Externalities

The origin of the social and ecological economic form in 1970’s when the oil crisis.  The state supposed to interfere:

a)      Limit stabilization policy

Reference to the great depression is misleading.  Monetary policy oriented at price stability will only generate real business cycle, which are best taken care of by the market and automatic stabilization.

b)      Avoid sector interventions

Experience under Nazi regime.  Motivations is normally political, not economic.

c)      Conduct Market Conform Policy

Allocation efficiency must proceed distributional concerns.  Targeting assistance programs like cash transfer, school and medical vouches are more efficient than price ceilings and fuel subsidies.

d)     Primacy of Order Over Discretionary

A little bit of inflation lower real wages and the companies would hire more workers.  Sticky for the short run, prove it with Philips Curve.

2.4.Video: Inside Job

Island is the high living standards.  In 2000, geothermal industries grow up and also the privatize bank.  2008 the banks are collapse, the unemployment grow up.

2008: Crisis, sovereign 10.000.000 peoples on their job and saving.  15/11/2008, Lehman Brother and AIG bankrupt, trigger the financial crisis.  30.000.000 people unemployment and 50.000.000 people drop down to the under poverty line.

In 1981, Reagen elected as US President.  He supported by economist and financial advisor, called the Reagenomics.  In 1990, the financial sector grows up.  In 1998, the City Group formed and become the largest financial institution in the world.  In this year, investment bank make a bubble for internet companies.  Money laundry and derivative investment grows up, no regulation for a long time.  In 2000 to 2003, sup prime mortgage grow up 4 times.

2001 t0 2007, financial bubble and become the Global Ponzi Model.  Risky (junk) investment supported by the credit rating agency (S&P, Moody). 

2008, the crisis comes because the bubble blowed.  700 billions bail out, 9.000.000 people lost their house.  Merger and acquisition wave happen, less number of bank and going to monopolistic or oligopolistic.

Note:

Joseph Stiglitz (The Nobel Winner) is the SEME Economist

Financial crisis is the market failure:

1.      No regulation for derivative securities.

2.      Policy making cooptated by the financial market actor (the same actor in the few regime).

3.      High risk, high return à speculative motivation with a gambling method.

4.      Monopolistic behavior: AIG, Lehman Brothers, Morgan Sachs (investment bank and financial institution) supported by the ranking institution (S&P, Moody’s).

5.      Derivative: Selling promise of the future.  High uncertainty, low collateral, and promise high return.  Speculative motive like gambling.

6.      Bubble economic indicator: stock and money market growth higher than real sector market.

Samuelson says: economic driven by the Bible, so first branch of economic knowledge is the ethical economic or economic ethics. 

Adam Smith: Wealth of Nation (1^st book) than Moral Sentiment (2^nd book).

III. It’s Just Social and Ecological Market Economy, not German Social and Ecological Market Economy

3.1  Social Market Economic Through in Ibn-Khaldun’s Teachings (Prof. Marcus Marktanner)

The Wealth of Nation by Adam Smith is the Anglo Saxon SEME. 

The Al Muqadimmah (1375—1378) the major ideas on economics and politics.  SEME build the system in a historical context.  The Al Muqadimmah is Islamic context of SEME.

The Methon Denstreit:

1)      Theories are developed as a response to historical lesson (Schuller).

2)      Economics is based on universal principles irrespective of historical contextualization (Menger – Austrian School)

3)       Cologne School (sociological, humanistic, religious) versus School of Freiburg (principles and theory).

Khaldun and SEME:

·         Derive principles of good policy,

·         Historical context,

·         Close to academic and politics.

·         Equitable social development.

Social Development

Socialism: State creates consumptions justice through redistribution		Liberalism: Great multiplication of the production of all different arts
SEME: Market Freedom + State Protected Equal Opportunity
Khaldun’s Value System: Balance set up among mankind, civilization, cultivation, and private property rights. Freedom in the market and equitable social development.

Organization of the State

Socialism: Centrality		Liberalism: Minimalist state (night watchman sate)
SEME: Individuality + Solidarity = Subsidiarity Insulation from special interest groups
Ibn Khaldun: Dynasty have finite borizour and eventually come to end because the ruler will be undermined by special interest groups.

Role of the Market

Socialism: No Market		Liberalism: Markets are spontaneaus
SEME: (1)   Price stability; (2) predictability of economic policy; (3) private property rights; (4) private liability; (5) free prices; (6) free trade; (7) free contracts.
Ibn Khaldun: Ordering Market: (1)   Private property rights: civilization and wellbeing as business property depend on productivity and people’s effort in all directions in their own interest and profit. (2)   Free prices, free contracts, free trade. (3)   Prices stability: quality of the legal tender

How to interfere in the market:

Regulatory	Supplementary
1.      Abnormal labor supply, 2.      Unequal economic development, 3.      Externalities, 4.      Market power.	1.      Avoid sector intervention, 2.      Limit stabilization policy, 3.      Primacy of rules over discretion, 4.      Market conformity.
Ibn Khaldun: 1.      The office of the market supervisor. 2.      Investigates abuses and applies the appropriate punishments and corrective measures.

Conclusions:

1.      SEME strongly reflected the Ibn Khaldun’s economic rather than laissez faire or socialism.

2.      People action need to be “in accord with the public interest”.

3.      Similarities are high event separated by more than five countries.

4.      Contextualized in a real world context, economic and governance problems.  Have not changed much overtime.

5.      Fundamental problems refer to justice and equal economic empowerment.

6.      Ibn Khaldun is the first thinker of SEME.

SEME: Historical contextualization	Marx and Hegel: Capital versus Labor
Empirical (inductive) approach: free market + equitable economic and social development	Concludes the universal truth (deductive approach)
Pragmatically and practically model	Idealism model

IV. Market Freedom With and Without Equitable Social Development

4.1  How Equitable Social Development Increases Market Freedom and Efficiency (Prof. Markus Marktanner)

Cobb-Douglas model (Consumption and Leisure) versus Buchanan Model (Consumption tide with production - Liberalism) versus Maximum Leisure (Socialism: joint production with equal consumption).

Socialism	SEME	Liberalism
1.      People choose more leisure under socialism. 2.      People produce less under socialism.	1.      All resources dedicated to someone must be constrained. 2.      Everyone can access the public good equally.  Aggregate welfare maximized. 3.      Equal access to nontradable market capability facilitators that also assures equal social development.

Inequality: (1) primary resources allocation and (2) economic inactivity

1)      The worst form of inequality is to try to make unequal things equal (Aristotle).

2)      Nor does the very older nature permit equality (Aquinas).

3)      Man is born free and everywhere he is in chains (Rousseau).

4)      No society can surely be floushing and happy, of the greater part of the numbers are poor and miserable (Smith).

5)      The worker of the world has nothing lose, but their chains, workers of the world unite (Marx).

6)      Without that sense of security which property gives, the land would still be uncultivated.

7)      In the demand for home commodities should be diminished, because of the fall of rent on the part of the landlords, it will increased in a far greater degree by the increased opulence of the classes (Ricardo).

Dependency Theory (Kuznet’s Uthesis)

If the rural move to urban à wages will falling down à profit will growth up à inequality will growth up à economic activities will falling down à Security will falling down à the opportunity of civil war will growing up.

Equality versus Efficiency (in the political economics)

Efficiency	Neoliberalism
High	Washington consensus	SEME
Low	Totalitarianism (Failed state)	Socialism
	Low	High	Equality

4.2  Video: Life and Debt

The typical problems of economic reforms, Jamaica case study.

1962, Jamaica independence from Great Britain with the high financial problem.

1973, Jamaica funding the development by debt from private banking system.

1976, Jamaica going to IMF and funded on July 1977 with many conditions.  Jamaica must reduce the government spending, grow up the import, and privatization.  The US Multinational Corporation (MNC) cooptated the economy.  Jamaica lose their agriculture production, local price is more expensive than imported price, and high inflation.  Interest rate is very high for farmer’s loan, no protection (because IMF not allowed) to agriculture because of free market.  Rationalization of import regime, new order of trade, no protection for all sector and free or liberal competition.  The “Banana War” is come.  Jamaica exported the banana to Great Britain and European Union, US protest to the WTO.  US opinion: “against to free market” but US government protect their market from Jamaica’s banana.

1980, Kingston turning to the free zone for industrialization.  Raw materials came from US and manufactured in Jamaica than send back the finish good to US.  Low wages, low taxes, low cost of good manufactured, and low cost of goods sold to make the high profit. High externalities of the free zone are environment and public health.  Invasions of McD, imported the chicken meet directly form US. Local chicken farm, local chocolate ranch, local food and beverage industry bankrupt.  Tourism industry grow up, high inequality, high crimes. High debt and market liberalization make the poverty higher.

Debt trap

Social riot                                           Financial distress                                             IMF Debt

 

Tied to the debt covenant                                                       Free Market (Liberalization)

 

No Government Intervention                                    Unequal; market power; monopoly by MNC;

Environmental externalities                           

 

If the unequal, market power, monopolistic economy, and environmental externalities happen the government should interventions the economic and market.  The government makes it balance and do social development or human capital.  Free market should support or intervention by the political policy.

V. Will the Global Economic Crisis Lend Social and Ecological Market Economics a Louder Voice?

5.1 How Indonesia Weathered the Crisis Storm Since 2008 (Prof. Dr. Djisman S. Simanjuntak, Executive Board of Prasetya Mulya Foundation and Board of  Directors of CSIS)

Recent Development:

1)      Capita income $3700, growth of GDP 6%.

2)      Strong Foreign Direct Investment (FDI) inflows and outflows.

3)      Domestic private domestics.

4)      Lowered inflation rate (5%).

5)      Deterioration of inequality.

6)      Primary commodities continue to dominate goods export with the obvious vulnerability to erratic cycles.

7)      Insufficient investment in infrastructure due to huge subsidies on current consumptions and transfer.

8)      Return to balance of payments basic feature that is typical of low middle income economy characterized by current account deficit.

Domestic Dimension:

1)      Adjust the post crisis conditions.  Government, corporate, and financial institutions.

2)      Large scale windfall from natural resources that triggered increases in nominal health, including real estate assets that allow as new round of leveraging.

3)      Demographic profile that leads to a relatively high marginal propensity to consume.

4)      Decentralization that helps strengthens consumer and business confidence.

5)      Residual harvest from 1998 crisis.

6)      Consumption and investment Information and Communication Technology (ICT).  Telecommunication is the higher growth sector.

East Asia Pull Factor:

1)      The rise of China as center of economic growth.

2)      Participation in the East Asia productions networks.

3)      Zeitgeist of economic integration to East Asia.

RICH Aspirations:

1)      Resilience

Built in ability to with stand crisis of domestic of external origin.

2)      Inclusion

Better access to development activities and more equitable distribution of development outcome.

3)      Competitiveness

Cost advantage in standardized good and services in differential advantages.

4)      Harmony

Co-evaluation of diverse gene-mimetic elements of the development process of  both competitive and cooperatives natures.

Development Traps (Sisyphean Growth):

1)      Growth is not deterministic.  Needs and “escape velocity” before it gets to a self-sustaining process.

2)      To avoid traps “new propulsion” is needed any time development arrives at a new threshold.  Higher level of human capital.

3)      Sisyphean cycle is not unusual economic development.

4)      Gathering “escape velocity”: (1) Acceleration or modernization; (2) development planning; (3) industrial targeting; (4) growth friendly growth.

Technology Frontier and Human Capital Accumulation:

1)      Higher perfection, higher cephalization, nearer to low of least energy.

2)      The wind blogging frontier.

3)      Technology acquisition programs, national, regional, and global.

4)      Billion dollar question or secret of progress.

Why Indonesia invested too little in human capital relative to its neighbors?

Ideology and Pragmatism in Retrospect:

1)      Continuous debate but consensus remainly doubly.

2)      Some constitutions but develop different architecture.

System Reform: Ur-Constants:

1)      Eco physical constant.

2)      Equatorial paradox.

3)      Selfish competitive genre.

4)      Progress, hedonic treadmill, easterly paradox.

5)      Statistically inexorability.

  

German:

Good education and adored able access.  The German system is the most socialistic system in the market system country.  Free market plus equitable development.

Indonesia:

The system is not from the firm system or sustainable system but discretionair system and counter social policy.  Example: Cash transfer is discretionair system but oil and gas subsidies is counter social system.

Priority Agenda:

1)      Greater trust in market.  Price formation mechanism and regulatory measures to make it less and less imperfect.

2)      Focus of government to create and manage national common (social and political stability, human capital, and SME’s focused).

Linkage the SME’s and Big Company, brand as a flag but the component came from the SME’s.  Eradication of discretionary rent, creating regulations which normally punish SME’s disproportionaly.  Human Capital: health, literacy and creativity, and entrepreneurship. 

The secret of Japan, Korea, and Taiwan, also China now a day. High wages and high social income make the multiplier effect.  High production and high consumption.

3)      Adequate social capital formation and social protection, including social security.  Avoid over pricing.

Note:

Part of every rupiah from natural resources should allocate to the human capital (health, education, and entrepreneurship).  Indonesia’s export 40% came from natural resources, human capital must be high.

Repelita and MP3EI

MP3EI is the plan expansion and accelerating economic development.  The original version of CSIS: Build the zone or central in the small region like Jabodetabek, Semarang Raya, Surabaya Raya, and connecting to the world.  But the Indonesia government make the “corridor” the width area all around Indonesia.  Not focus and to width. 

Repelita is not operational plan and only normative programs.

5.2 In Light of Recent Food, Fuel, and Financial Crisis, is classical Economic Liberalism still Feasible?

German versus USA Economic Liberalism

1948: Price Liberalization.  Fixed the inflation, price and wage controls, unemployment and black market.

19…: Fall of the Bretton Wood.  Fixed exchange rates with USD as the key currency.

1973: The fall of macroeconomic management after second oil price shock.  High oil price, low USD, high Germany interest rate.  Need strategy to save energy.

SEME in European Union:

Lisbon Treaty: The union shells establish.  High competitive social market economy.

Euro Crisis: premature currency union.  Common currency promotes competitive convergence through adjustment in labor productivity.

Food Crisis in SEME Perspective:

The case of scarcity: climate change, population growth, economic development.

The case for insanity: subsidies, trade regulations, commodity gambling.

1)      World population versus food production.

2)      Agricultural subsidies versus world food prices.

3)      Ethanol versus world food prices.

4)      Oil, gas, and fertilizer prices versus world food prices.

5)      Dollar-Euro exchange rates versus world food prices.

6)      Globalization going too far.

7)      Wheat stock ratio versus world food prices.  Commodity speculations in the commodity market or futures market.  The speculations have control to the food stock all around the world.

8)      Gross market value of commodity derivatives versus world food prices.    

5.3 Video: An Inconvenient Truth

Glass house effect cause the global warming.

Catastrophic: hurricane, dawning and landslide, drying, and gletser meltdown.

Kyoto initiative: USA and Australia did not ratified yet.

Closing Speech: Totok A. Soefijanto (Deputy Rector for Academic, Research, and Student Affairs of Paramadina University)

Indonesia economic founding father cannot implement the concept.  Hatta with the Cooperative and Soeharto with Pancasila Economic. We must make the concept operationalized.