The Jakarta Post
The Indonesian government should adopt a macroeconomic policy directed at strengthening people's purchasing power, head of Regional Economic Integration at the Asian Development Bank Iwan Jaya Azis said.
'The effort to stabilize the economic sector should be related to the priority to strengthen middle to low-income people's purchasing power. It will also stem development disparity and alleviate poverty, in line with Jokowi's development principle of Nawa Cita,' said Iwan in his presentation during a seminar on Tuesday.
He noted the 'deadly' combination that brought Indonesia's economy to where it is today: the failure of the manufacturing sector that led Indonesia to depend on imports and unanticipated foreign capital inflows that increase the private sector's foreign debt.
Aside from the current economic crisis, the combination has also caused the decline of productivity in economic sectors due to greater input than output, according to Iwan.
He added that the excess of capital inflows brought negativity to the productivity of labor, capital and natural resources.
'All economic policies should be directed to increasing productivity, but not only for the sake of economic growth and exports per se. The government should also maintain people's purchasing power supported by the improvement of infrastructure,' Iwan said.
He advised all policymakers to consider the impact of economic growth-stimulating policies toward Jokowi's Nawa Cita. Avoiding all policies that will negatively affect people's purchasing power is of great importance for policymakers today.
'Eliminating or lowering taxes for small and medium enterprises could be one of the ways to maintain people's purchasing power,' said Iwan. (dan)
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