The World Bank recently released a report titled “Aspiring Indonesia: Expanding the Middle Class”. The report focuses on how the middle class has been growing significantly in Indonesia for the last few decades. It says one in every five Indonesians now belongs to the middle class comprising at least 52 million people earning between Rp 1.2 million and Rp 6 million per person per month (US$7.75-38 per person per day). The income level looks low, however the “aspiring middle class” identified as those earning a little over Rp 500,000 to Rp 1.2 million monthly and even poorer groups are of course more prone to economic shocks.
As the “fastest growing segment of the population”, the middle class is the country’s supporting pillar and the future of our nation.
If Indonesia is to realize its ambitions of spurring growth and someday becoming a high-income country, according to the report, it will need more support and participation in the development from the middle class.
A larger middle-class population and market in Indonesia has significant economic, political, environmental and social implications. The emerging middle class in Indonesia can boost consumer spending and economic growth and broaden prosperity. A strong middle class can also be an effective pressure group, a powerful voice for better governance. The government has always been influenced by Indonesia’s elite and has given a lot of attention to the poor. Now it must systematically and strategically engage with the middle class. Engaging the middle class might well be the best way to increase the effectiveness of development policies.
The effectiveness of public policy is influenced by an accurate and comprehensive public communication strategy. An important part of that strategy will be to improve transparency and accountability in budgeting processes. Discussions on state and local budgeting have come to be perceived as a very technical process and sometimes proceed behind committee doors or through closed budget hearings among ministries and line departments. This creates resistance among the public—including the middle class—to pay attention to the development issues.
There is also a problem with insufficient human resource capacity within ministries to handle public communication. Moreover, some high-level officials tend to use technical jargon that is hard to understand by the middle class and the general public. Not to mention that sometimes they also publicly express disagreement with government policies.
In this digital era, fake news, hoaxes and politicization of public policy are some other challenges. The capacity of officials to respond to wrong and misleading information needs to be improved. The middle class—which enjoys increasing access to education and information—is becoming increasingly critical.
What might the repercussions be if the problems mentioned above are not solved? First, the highest level of productivity of middle-class workers might not be achieved, because they don’t have much trust in the government. Second, the middle class could possibly become more apathetic. Third, the economic growth potential might not be realized because middle-class workers’ productivity is lower than it could be. Also, public trust, participatory budgeting and the tax ratio could remain low. In 2017, based on the Open Budget Index, Indonesia scored 64 for budget transparency, 22 for public participation and 83 for budget oversight. The country seems to have a serious problem with public participation, but there is still room for improvement of budget transparency and budget oversight.
A strong commitment and statement of willingness from the leaders will be important to create an effective engagement strategy that focuses on the middle class. The following are some policies it could pursue.
First, it is important to develop a listening culture, especially in government institutions. To make a budget fit people's needs, the public must participate actively in its formulation and implementation. A listening culture can be created by involving the middle class in the budgeting process. The group’s participation in the budgeting process can also facilitate participatory democracy at the grassroots and foster social harmony. With broad autonomy in Indonesia today, local governments play a significant role in efforts to improve public participation in the budgeting process.
Second, the government needs to use more narratives when explaining its policy to the public. Data is always important, but the government can’t just talk about numbers and graphs with technical language. It is crucial for the government to use data to create engaging, informative and compelling policy narratives. Leveraging the power of policy narratives will also help the government encounter misleading information and deliver messages that resonate with the public.
The third approach is to build two-way communication through social media. Some local leaders, such as West Java Governor Ridwan Kamil, and Central Java Governor Ganjar Pranowo have been using social media effectively to report on the progress of local government activities and to get feedback from citizens. However, we need more leaders to follow this practice.
Another strategy for the government is to strengthen the role of NGOs, which keep an eye on the government and legislature. The government can work together with the NGOs to encourage the middle class to share its aspirations and actively participate in the country’s development.
Finally, President Joko “Jokowi” Widodo needs to set up a team of capable economic spokespeople to describe all the government's economic and investment policies coherently, clearly and comprehensively. They should also have the capability to mingle and communicate with the middle class, as that group is now one of the key players in the nation’s economy.
MA in international development policy from Sanford School of Public Policy, Duke University
Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.