The Jakarta Post, 18 December 2007

An Indian economist has said that Indonesia should work on its developmental process rather than simply aiming for a higher growth rate or implementing an elaborate mechanism to distribute wealth among the poor.

"It has to be viewed from a different perspective altogether, in which growth and distribution are integrated into the very same process, while breaking sytematically the social barriers of discrimination and prejudices," Amit Bhaduri, an economics professor from Jawaharlal Nehru University in New Delhi, said on Monday at a seminar in Jakarta.

The seminar, titled " Growth, Inequality and Employement in the Age of Liberalization: Why the Indian Experience is Relevant for Indonesia", was organized by consultancy firm Strategic Asia.

Bhaduri spoke about "development with dignity, saying "this is not an utopia". He said economic power needed to be decentralized in order to help the country's poor. "The central government can't provide jobs to the poorest or employ them productively. Decentralization is a political fight for a process," Bhaduri said.

The unemployment rate in Indonesia has incrased from around 2.7 percent in 1986 to over 10 percent in 2007. The Indonesian government has promised to bring it down to 5 percent by 2009. But this target is a long way from being met. "Statistics have shown that employment is becoming elastic to economic growth. This means economic growth alone will not solve the unemployment problem."

The easiest way to solve the issue, Bhaduri said, is to focus on the poor. "if you try to bring capital, jobs will get out. The more you bring in larger capital, the more jobs you can offer. So you have to create a better investment climate here." 

He said the priority should be given to domestic trade and that local people and their needs should be directly involved in the domestic market and production. "Choose whatever you want to produce. Produce and consume at home first. Indonesia can produce local rice and fish," he said.