BBM, logistik, dan Politikus bebal
yang terpenting adalah membuat sistem yang bisa menjadi "buffer" dari eksternal shock ini, , Komentar bahwa rakyat miskin yang akan terkena efek negatif dari Minyak menurut saya hanya justifikasi moral dan alasan "heboh" yang politis, karena sebenarnya efek negatif inflasi akan lebih terasa oleh kaum urban dan menengah ke bawah yang steril dari BLT karena mereka adalah masyarakat non miskin, tapi vulnerable, angka perkiraan orang miskin adalah sekitar 7-8 persen total penduduk Indonesia (upah dibawah $1 per hari), sedangkan untuk level vulnerable sekitar setengah dari penduduk (49%).BLT sangat penting artinya bagi rakyat miskin untuk bertahan dari eksternal shock ini, sayangnya tingkat kesalahan penempatan yang tinggi (smeru estimates : 45% salah sasaran), dan tingkat korupsi yang tinggi sangat mengganggu proses ini, studi dari Olken(2005) menunjukan rent seeking behavior besarannya berbanding lurus dengan banyaknya tangan birokrasi, semakin menuju ke sasaran, semakin besar pula rent seeking tersebut, studi dari Gauthier(2007) juga menunjukan bantuan kesehatan sebagian besar tidak sampai ke sasaran, di uganda misalnya, 86% dana kesehatan di korupsi dalam bentuk rent seekers pada harga obat (nilai obat lebih besar dari nilai asli atau obat yang diberikan gratis diperjualbelikan), dan berkurangnya dana yang mengalir ke fasilitas kesehatan. Hal ini menunjukan betapa sulit pendistribusian BLT tersebut tanpa sistem yang jelas. Sebagai institusi, kantor pos yang tersebar di seluruh indonesia, akan lebih baik dalam menyalurkan dana BLT, begitu pula dengan kantor PPK (penyalur dana kecamatan development project), akan jauh lebih baik lagi jika orang miskin memiliki rekening di kantor pos dan mengatur sendiri uang nya tersebut. Cek kosong berupa kupon terbukti tidak efektif karena kupon tersebut sendiri adalah quasi-money yang dapat diperdagangkan.
Masalah yang sama terjadi pada Bantuan Operasional Sekolah (BOS), bantuan inkind relatif tidak efektif dibanding dengan bantuan uang, kemungkinan pertama, barang yang datang tidak sesuai nilainya dengan nilai pembelian. Kedua, bantuan berupa barang (terutama kertas dan buku) beresiko tinggi diperdagangkan (seperti kupon dan kasus obat) oleh oknum sekolah. Seperti umumnya masalah principal-agent, masalah korupsi yang tinggi ini harus diperbaiki dengan sistem insentif dan supervisi yang tepat carrot and stick dalam artian payung hukum yang tegas sangat krusial dalam hal ini.
Jika memang PT gas negara, BULOG dan pertamina tidak mampu mempermudah akses terhadap gas, dan bahan pokok maka sudah selayaknya pertamina dan PGN dan BULOG dilikuidasi dan kita membuka lebar lebar terhadap perusahaan distribusi asing.

8:43 AM | Labels: BBM, economic development | 6 Comments
Cincha goes to harvard
I must admit she got the spirit. But lack of attitude. As far as I know, we Indonesian rarely talk like you did chincha, bragging around for studying in harvard, princeton and Yale. we do have those dreams in mind, but we understand one word,"uncertainty", so we always watch our mouth and tongue. I really not in the mood for commenting her, but I'll post this anyway. the kid is not to blame,there's something wrong with the society raising her.
12:50 AM | Labels: rubbish | 4 Comments
The "Ujian nasional "
the final exam itself is a bad incentives stimulant, stick and carrots would not be able to work efficiently as long as the agent and the principal has diverse and contradicting objective. The fact that strict exam might undermine the prestige of schools, as most of the students probably failed, the agent-principal problem, is a way that a principal ask an agent to do something for the expense of his utility, and compensate it in the future, the problem won't be solved by giving bad names to schools and giving extra credit to the successful ones, this in fact distracts the incentives, as people will force to cheat, when the first mover will profited from it.
the problem is, one, the principal can not always been able to supervise the schools, and therefore, they need some other carrots for other success indicators. In addition, we need to lay off bad assumption and stupid paradigma, as the failure in the sacred national exam is the end of the world. In france, similar exam take place, it is called le bacalaureat (bac in short) some says, it's so brutal and demanding, especially in aljabar, and mathematics. People who managed to overcome it, in flying collours, will be awarded by cheap cost of study up to PhD level, the grades are not very important.
Those who were not able to get Bac level, will still get jobs, it's not the end of the world. They normally work as rough workers, field technician, etc. Which promise quite attractive remunerations (in relative terms). To eliminate the incentive to cheat, I think we need to change our paradigma, leaving university is not a shame, it's an opportunity, those who are able to pass the final exam should be able to get the high school diplome, however, still they could not get higher education without passing it first. those who doesn't pursue their education has better things to do, working, those who pursue another level of education are those who in the end will become low level managers, junior consultant, etc. This is what I really meant about carrots, the incentives now divided in two hierarchy, higher level of income of education in the future, or lower income but more time to develop experience. The ujian nasional should not circumcise the opportunity of students, instead, giving them choices, with clear consequences
9:09 AM | | 1 Comments
Bernoulli's error in Politics
the drama in national awakening party precisely shown both cases, both parties under disputes seems to care too much in their ability to control others, afraid of losing in the face of their own fanatic supporters, but care very less in losing in the national election next year. They prefer to focus on short term risk than long term gain, as the disputes made non-traditional supporters look another way in the coming election. The increasing uncertainty in probability of winning also seems to validate the nobel laureate hypothesis, as people assign much higher probability of truth in their opinion than is warranted , not only in the short run they are risk averse, they also believe that they are the potential absolute winner. Which in many cases proven to be another way around
11:28 PM | Labels: human behavior, politics | 65 Comments
Bernanke, we'll be watching you...
for those who share the same class with me, guys, remember when he was bragging about the CBS system? (in this video this is also the abreviation of Columbia business school)
for those who doesn't know anything about the beauty of Pak Anwar, should understand better by seeing this post
by the way please enjoy the video, tribute to dhira for the link, absolutely hilarious
3:24 AM | Labels: economic development, macroeconomic, video | 2 Comments
Social capital Inequality
how does it work exactly?
the ad-hoc approach of social capital in empirical analysis is trust indicator, and kinship relationships, but rarely significant (as my supervisor constantly reminded me..siggh..), it turns out that these indicators might affect people in both ways positive and negative, this allegedly conditional to the income level.
Poor people tend to be excluded socially and a subject of derogatory discrimination, therefore routinized relations and daily encounters between people generate social norms which shape patterns of inclusion as well exclusion of social activities. In other word, close relationship between people could constrain or enable the social structure of the poor.
Kinship variables, showing close relationship in siblings, or families, often seen as a remedy for risk alleviation for the poor, the poor will always be able to count on their relatives aid in case of unexpected external shock. The problem is, their families them self are poor, relying on them is not sufficient nor sustainable. Neighbor and friends closeness are considered in Putnam's work as a means of maintaining friends, and networks. The problem is the network it self was originally based on unequal status. The relations among people might be maintained just as close as clientage arrangement, as people acquire their resources by borrowing (credit), cheap labor (food exchange) which implies negotiations in their agreed terms, very often that the negotiation is not favorable for the poor. The paper stated "poor people relationships to those nearest to them in blood, marriage, and residence were therefore characterized by continuous supplication and unequal exchange".
In terms of collective action, social capital turns out to be less favorable to the poor, as the poor categorized with severe poor health and lack of food, which eventually lead to lack of productivity, therefore less opportunity to participate in a collective action and thus less money gained for such activity. This is interesting, as this imply to different caste of poor, there are poor people, able to move on, accumulating resources overtime, and less fortunate poor, continuously sank to the bottom of the income distribution.
People should see poor as a singular, not plural word, then we would be able to see clearer, one is transitory, and one is chronic poor. Something failed to consider in ad-hoc static poverty measurement
11:17 PM | Labels: economic development, poverty, social capital | 0 Comments
The economics of PKB
Very recently, the media was bombarded by the clash within the Nation awakening party, the political party is divided into two different sides. I would like to see how the economics rational explaining it. It should be clear that I am not a supporter of both parties, it is interesting for me however, all that had happened are turn out to be logically rational.
A conflict by every means is costly, therefore they (both parties) are operating in a high cost, and below its optimum full production level. In economic term, we call it below the production possibilities frontier. This is represented by the graph on the left. any where inside the cone are feasible to enough to attained. In our case the two axis represent the two parties (M for vertical and GD for horizontal), the cone (PPF) is the number of potential voters, as internal split will cost them some voters, hence both are operating inside the cone, instead of operating in the blue line of PPF where the number of voters is much greater.ISLAH on the way?
if that's the case, then why is so hard for them to do islah? it's not very surprising, because the islah is in fact not a sustainable point. This means that there are problem in dynamic inconsistencies in doing islah, preferences of both parties will change overtime. You see, say M is willing to accept islah, they might move from every point inside the cone to one point at the blue line, M groups are signaling, they are ready for peace treaty, calling disarmaments in their side. the problem with this, is that in the other side GD will now have a stronger incentive to wipe out all the M group, and therefore they will opt for a corner solution, choosing the 100 percent voters on the rightest point of the blue line. This happens for vice versa, with the benefit of the second mover. This explains why both parties decided to wait. As long as both parties don't have credible expected peace commitment there will no be islah. Both parties seem to send signals of continues fighting.
why are they fighting anyway?
I am not a politician, I honestly don't know. In economics literature conflicts might happen depends on the feasibility of such conflicts, internal splits or whatever we call it.
feasibility depends in two term, benefit and cost, according to Collier (2005,2006) , conflicts will happen wherever it is feasible to do.The benefit is high, since the general election is coming, more pie will be available in the near future, and if they are lucky, less mouth to feed. The cost is not enormous, some says in PKB, GD is irreplaceable, so preference toward GD is almost inelastic to external shocks. the last but not least is the probability to lose and to win, if we say the non-activating of M is a coup d'etat process then it's a rational thing to do, because historically, the other group tend to win anyway.
what about in the future?
the problem of conflicts is, it works in economies of scale framework, it gets better when it escalates even more. the losers will ask for friends and allies for help, and so do the winners, both parties accumulating their power in the expense of others which tend to be persistent Collier(2002) call this a conflict trap. I don't really understand politically, but fragmenting a political party in many small pieces is not very healthy for them, just look at PPP, or others. one thing for sure, if GD wins once more time, the more likely this things happen in the future, in an increasing scale of splits. this might happen in the future either because the probability of winning is getting higher, or whereas the cost turned to be insignificant. However no matter how significant that might be, it seems that the counter reaction is getting tougher everyday.
well, just see what will happen shall we?, time will tell.
9:27 AM | Labels: microeconomics | 6 Comments
a very brief look of scandinavian economics
Having the opportunity to study abroad, doesn't literally mean study in the campus alone. Everywhere I go,I always seen something interesting to watch, to learn, from other people, everyone. last weekend, I went to sweden, I spent a day in Stockholm,but spent most of my time in Uppsala,45 minutes by train from Stockholm. A perfect city, i would say, not too noisy like paris, less risk to be lonely than staying in Norway's country side. a small city, with surprisingly large mosque, the traffic was normal,no more embouteillages, but unfortunately no metro, nor tramway running around the city as well, but the transport was good, kinda expensive though. the train was better than Paris RER, and the buses were also much better and so was the transport from Nykoping airport to stockholm. much much better than Paris Beauvais transport.
the apartments for students is good, and well furnished. The neighborhood was nice,the people were great,nice and friendly, typical for small neighborhood kind of society, the city is surrounded by mountains,lakes, and trees, and of course snowy picturesque view... I just loved it, I need it to refresh my mind, which I wasn't able to do in the blurred and crowded city so called Paris.
the food was great, for me, as long as I could find a nice, relatively cheap, tasty and cozy, Chinese and Indian restaurant nearby, that should be good enough.
in Uppsala, we will able to find not only the oldest university in scandinavian country, but also large taxes,it was the largest in OECD countries, up to 2007, but becoming the second after denmark this year I think. However they had a very low inflation rate, only around 1 percent rate annualy. corruption is low, property right is protected, people should be able to do new businesses in only 15 days, approximately two weeks, I think this rather impossible in French style of bureaucracy. similarly to france, however they had problem with unemployment as well, since the policies in hiring people seems to be burdensome.
they had some unemployment fringe benefit for the unemployed, but wait,they had additional shortcomings ; "you wasn't able to work, so we gave you money to survive for couple of weeks", so here it is, first, at the very least, the unemployed is obliged to apply for work, at least 16 application every month, second, no matter how clever you are, if we find you a job first,and you wasn't able to find yours, you should take the job, so it would be normal for an graduate anthropologist to work in a supermarket. Those are the shortcomings, the allocation of talents were not efficient, but the Scandinavian way, normally worked it out, why? information is the answer, people might some time work in poor condition, but as time goes by, they may find a suitable job.
what makes this work very well in scandinavian countries, is that they have less population problem than latin america nor west europe, they had such a great culture that corruption is bad, property right is respected, financial market have lots of varieties, business is good, people are smart, informations are free.
they won't be able to export corn and seeds, but they export human technology, like hand phones, IT's and Volvo's..just being here, I am able to find a little piece of puzzle why people really think scandinavian model is great, what my friend always make a great fuss about.
it'a a small piece of puzzle, but I'll find the rest of puzzle sooner or later..
just to prove that what might be look nice in other countries, won't always be as juicy as if we implement it in our country,at least it wasn't as easy as it look.
one thing I hate in scandinavia, is the prices of fresh food. what's wrong with all the people here, I went to the supermarket to get some fresh chilies, and it costs me 13 crowns for three pieces of chilies, in Paris the same amount of money gives me a whole pack of fresh red chilies, around 30 pieces. siiighhh..
6:48 PM | Labels: economic development, travel | 3 Comments
Aceh dan Mimpi Saya
Saya ngeliat hikmah dari Aceh,dalam artian itu peluang besar,
suatu daerah terbuka yang bisa kita bangun lagi dari awal, jauh dari kebobrokan jakarta dan sekitarnya (I do hope so).Aceh dari pandangan saya yang sempit, adalah region yang paling besar perannya buat indonesia di masa datang. Populasi tidak terlalu didominasi populasi tidak produktif,artinya orang muda yang produktif lebih banyak dari orang tua, infrastruktur dan tata kota juga bisa dimulai dari awal.
mengapa berbeda? begini maksud saya; Industrialisasi di Indonesia seperti cerminan di Tanggerang dan basis "industri" lainnya selama beberapa dekade adalah industrialisasi yang semu, industrialisasi dihuni para pedagang, dan dealer (macam bapak JK) yang mengekstraksi harta bumi dengan barang modal kualitas tinggi, untuk kemudian menjualnya, ekspor non-migas kita memang sekarang berkembang, tapi isinya hanya sekitar plywood,barang barang turunan hasil bumi, apparel olahraga, dan barang barang jenis assembling lainnya. Masalahnya bagi saya ekspor tradisional ini sangat rentan dengan tekanan eksternal seperti harga minyak dan pergerakan kurs,ini karena barang barang modal nya sendiri sebagai input, kita impor dari luar negeri. Tahun 60-70an industri kita di indonesia selevel dengan korea selatan, sampai sekarang kita tak jauh jauh bahkan mulai dikejar oleh vietnam, artinya sudah ketinggalan 30an tahun dari korea selatan. Sekarang seharusnya sudah bukan era-nya jualan beras atau permen buat Indonesia, perlu ada lompatan besar di bidang industri untuk bisa mengejar negara lain.
dari sisi supply**, saya yakin kita gak pernah kekurangan, berapa ribu anak mahasiswa lulusan ITB,ITS,UNDIP,UI dll yang punya kapabilitas di bidang industri. Di bidang IT misalnya,ada seorang teman dari Burgogne bercerita kemampuan IT orang perancis sebenarnya masih standar, masih di bawah para pekerja IT indonesia. Contoh lain misalnya barang modal untuk perkakas dan pembangunan, semua barang modal untuk bangun infrastruktur di Aceh kebanyakan diimpor dari negara negara donor (kayaknya sih) Perancis, Jepang, Malaysia, dll. Saya kok gak pernah ketemu ya perusahaan besar indonesia yang mengembangkan alat alat berat setelah Texmaco. Coba bayangkan satu propinsi dibangun! berapa banyak alat berat yang dibutuhkan? dan itu smua potensi ekonomi ini bocor ke negara donor, sebagian kecil saja dinikmati oleh calo calo dari jakarta. Contoh lain barang perkakas dapur, saya pernah search di google perusahaan Indonesia yang membuat kompor listrik, keluarnya electrolux di suatu toko di glodok, padahal apa susahnya bikin kompor? (sotoy yah)
menurut saya yang suka sotoy ini masalahnya di sisi demandnya, supply** seharusnya bisa diotak atik lah, demand nya yang kurang, karena inheren sama banyak hal.
Ambil contoh kompor, mana ada investasi buat pengembangan kompor listrik dan turunannya kalau smua keluarga di indonesia masih pakai minyak tanah dan gas? di era industrialisasi sekarang ini selayaknya minyak dan gas digunakan untuk industri ,sepadan dengan harganya yang akan terus naik sampai kiamat, maka mesti industri yang menggunakan,wong cuma mereka yang bisa flexibel merubah harga barang sesuai cost produksi, sedangkan manusia sekuat apapun asosiasi buruhnya gak akan bisa naekin gaji tiap harga minyak dunia naik ,ya kan?. Makanya pengeluaran mereka juga mestinya tidak terlalu fluktuatif. Listrik dalam hal ini bisa juga menjadi fluktuatif tapi rasa rasanya tidak se-fluktuatif minyak karena hanya produk turunan dari minyak tambahan lagi listrik itu economies of scale industry, makin banyak yang pakai, makin rendah costnya beda dengan minyak yang harganya tetap karena kita impor.(tapi gak tau juga deh ga mau sok tau). Kembali ke kompor, kalo keluarga indonesia bersedia merubah gaya nya dari kompor minyak tanah dan gas ke listrik, demand kompor akan tinggi, sangat tinggi, gak usah lah kita ekspor dulu, menuhin permintaan dalam negeri pasti sudah belepotan.
Dari sini berkembang lah ilmu pengetahuan, teknologi, cluster cluster baru industry yang berakar kuat dan berkesinambungan di tanah negeri, bukan industry yang berkembang karena "orderan" assembling dari orang singapur atau malaysia. cluster cluster ini menjelma menjadi network, network anak anak pintar negeri yang menghasilkan ide ide segar, barang barang baru, yang sepertinya sekarang sangat jarang kalau tidak dikatakan tidak ada sama sekali.
Supply dari tenaga tenaga ahli muda ini sudah dimulai dengan proyek habibie, dengan IPTN dan lainnya, blue print riset dan teknologi kabinet sekarang juga sudah mengarah kesana,tambahan lagi bakal ada ribuan beasiswa untuk menjadi pintar dari dikti, Suatu saat ketika para cendikia ini selesai studi mereka akan mendapatkan tempat yang nyaman di pusat pusat penelitian teknologi yang bernilai jual, Saya berkhayal Aceh di masa datang kaya dengan infrastruktur dan tenaga ahli di bidang nya,menjadi semacam silicon valley di amerika serikat.
kenapa aceh? karena tempatnya yang sangat strategis, di ujung negara, dekat selat malaka,jika dibangun pelabuhan internasional (memungkinkan gak sih?)yang bebas dari pungli dan sarana jalan yang baik, kita bisa buat zona ekspor yang dekat dengan sumber industri dengan sangat mudah dengan akses yang baik ke selat malaka, baik melalui pelabuhan di aceh, maupun di medan, saya yakin bakal jauh lebih memiliki nilai jual daripada di cakung Jakarta utara.
Kedepan mungkin kita akan bisa mengekspor produk2 industri kualitas tinggi,bukan mengekspor beras dan jagung, sudah saatnya anak anak petani menjadi programer2 IT tangguh, anak anak buruh menjadi arsitek arsitek besar menjadi tulang punggung industri industri besar di Indonesia. dan biarkan para ilmuwan pertanian memikirkan bibit unggul buat makan, bukan buat di ekspor.
kuncinya menurut saya adalah kemauan untuk berubah seluruh rakyat, paradigma lama mesti didobrak, sudah terlalu lama bangsa ini lelap dalam tidurnya,membakar BBM bertahun tahun, membuang buang uang APBN untuk subsidi padahal infrastruktur pendidikan,kesehatan, dan industri tidak membaik, di papua sana masih ada orang pake kapak batu untuk mencari sagu,malah kita bangga dan sekarang menjadi obyek industri parawisata (siighh...)
tugas pemerintah di Aceh bukan hanya merelokasi penduduk atau mempetak-petakan kota, tapi membuatnya menjadi kekuatan baru di Indonesia
ps : ** untuk mengurangi salah pengertian, ini sisi supply buat pengembangan industri di aceh,-mimpi saya-, tidak merepresentasikan masalah supply di indonesia secara keseluruhan, artinya conditional terhadap masalah logistik dan pungli
9:38 AM | Labels: economic development | 4 Comments
Pembelaan Buat Negeri
Di liputan enam hari ini ada sekumpulan mahasiswa berdemo mengutuk kelambanan pemerintah menangani kenaikan harga.Tradisi reaktif seperti ini sepertinya telah menjadi trend sejak lama di kalangan mahasiswa, dan masyarakat kita.
(1)pertanyaan pertama buat mereka, harga yang mana? inflasi kah maksudnya? jika memang bgitu jawabannya menjadi sulit, suatu dilema karena instrumen pemerintah terbatas, suku bunga tak mungkin dinaikan lagi,bisa bisa jadi krisis yang menghantam, mengingat pasar uang dunia sedang memanas,pengetatan kredit dimana mana karena lembaga keuangan dunia merugi dikarenakan krisis mortgage di Amerika serikat. Pemerintah dan Bank Indonesia menjadi terbatas ruang geraknya, karena sektor riil dan sustainability hutang di masa datang taruhannya.
(2)Masyarakat yang mana yang dimaksud? smua orang bicara kemiskinan, rakyat sengsara, semuanya hanya idiom yang mereka dengar di media. Mahasiswa bagai kerbau dicocok hidungnya, mengekor tanpa mengerti masalah. ketika seorang pakar berbicara dengan titel PhD nya, mahasiswa politis ini merasa terpanggil untuk membela ide ide tuannya, tanpa ada proses menerima dan mempertimbangkan.
(3)Kenaikan harga barang barang itu karena apa? Kenaikan harga harga sebagian besar dihasilkan dari harga pasar yang tinggi, karena kepanikan para pengelola modal dunia.
Banyak orang tidak mengerti,di abad ini harga beras, pangan dan minyak tidak hanya ditentukan oleh biaya produksi, ada faktor spekulasi dari pemegang modal,pemegang hak jual dari komoditas2 dunia. Kepanikan kenaikan harga minyak dunia, dan berkembangnya bio-fuel sebagai "emas hitam baru" membuat banyak pemilik modal beramai ramai membeli hak future option membeli komoditas pangan,untuk mengantisipasi harga yang lebih tinggi di masa datang, yang ironisnya berujung pada meningkatnya harga2 komoditas. Proses self fulfilling mechanism ini murni exogenous dari peran pemerintah, penjelasan kenaikan harga pangan lebih lanjut dibahas disini, yang menegaskan faktor eksternal adalah faktor penting penentu harga harga pangan yang meroket. Jalan pintas yang paling mungkin dipilih adalah subsidi, yang resikonya antara lain kemampuan fiskal pemerintah menurun drastis dan more inflation from demand pull inflation. Sebaik apapun skema subsidi langsung, leakage pasti saja ada. Intinya inflasi adalah suatu fenomena tidak aneh, bahkan kemampuan negara kita mempertahankan inflasi tidak bergejolak hebat adalah prestasi yang baik.
Data resmi menunjukan kemiskinan menunjukan trend yang membaik dari tahun ke tahun seiring dengan momentum pertumbuhan ekonomi yang membaik,tapi well-being masyarakat yang rendah, dan masalah eksternal yang buruk,menghambat proses ini. Orang orang pesimis atau tidak mengerti malah cenderung untuk menyalahkan dan mempolitisasi output data bps,mereka tidak mengerti bahwa poor in income term tidak selalu berkorelasi dengan poor in non income term, mereka tidak mengerti bahwa masalahnya terletak di pengembangan infrastruktur dan public policy dalam penyediaan barang publik, ironisnya mereka tidak juga mengerti bahwa ketika uang negara dibakar setiap hari di jalan jalan besar untuk orang orang kaya,di dusun papua sana masih ada saudara kita dengan teknologi zaman batu berkubang dalam kehidupan, di gunung merapi dekat bukit tinggi, banyak petani membakar panennya karena tidak ada fasilitas gudang yang memadai untuk sekedar menunggu harga gabah membaik. Banyak media menyorot susahnya hidup kaum pemulung di jakarta,tapi sedikit yang tahu, bahwa penghasilan "si hina" pemulung kadang bisa sampai tiga kali lipat gaji guru "sang pahwlawan tanpa tanda jasa" honorer di tanggerang. Definisi orang miskin dan sengsara di negara kita telah didikte oleh media, bahkan penyebab pemiskinan ini juga telah didikte oleh para opportunis politik dan masyarakat menelannya bulat bulat.
Sedih melihat perkembangan negara kita seolah dianggap angin lalu, oleh komentar komentar pengamat (politik) ekonomi dadakan, dan para anggota dewan yang tidak siap oleh data ketika ditanya wartawan dari media kelas tabloid.Masyarakat kita tidak mengerti bahwa dengan sekian banyak bencana alam, bencana kemanusiaan, perseteruan politik, kemunduran intelektual dan inovasi teknologi, negara kita masih bertahan, dan berkembang walaupun tertatih tatih.
Banyak perubahan telah dilakukan, subsidi energi dikurangi, dan dialihkan pada pembangunan infrastruktur, ini penting karena faktor non income masyarakat tidak menjadi prioritas selama satu dekade ini. Perampasan harta bawah laut indonesia oleh nelayan asing yang high tech,membuat proses pemiskinan nelayan semakin kompleks, kurangnya dana untuk membangun keamanan laut yang kuat kini sdikit demi sedikit ditambal,lemahnya teknologi masyarakat nelayan (seharusnya) mulai menjadi sorotan, penggunaan teknologi baru untuk memanfaatkan sumber sumber energi baru bermunculan. fokus dari departemen departemen di pemerintahan mulai membaik, birokrasi sedikit demi sedikit dikurangi di berbagai departemen, terutama departemen luar negeri.
Mari saudaraku bangun optimisme negeri, selama setiap politisi dan pengamat bicara pesimis atas negeri,terutama demi simpati anak negeri di pemilu 2009, selama media mempublikasi ini dengan tidak proporsional,dan selama rakyat menelannya bulat bulat pesimisme ini. Tidak akan bangkit negeri ini dari kesusahan
1:39 AM | Labels: economic development | 6 Comments
How do we run business here
karena kantornya persis depan apartemen gua, kita suka pulang bareng, disini lah sering ngobrol.Menarik sekali dari dia gua bisa belajar hal hal remeh yang mungkin gak bisa dibaca di buku, atau di internet. Hal yang cuma bisa diceritakan,yang cuma berasal dari pengalaman.
Awalnya smua berasal dari curhat,masalah di kantor,karena sebagian besar kantornya tampaknya bakal pindah ke India dan China. Dari situ mulai ngobrol outsourcing,nilai tukar,international trade, efek euro dan dollar,Diskriminasi sosial, sosiologi perkotaan dan lain lain.
tapi yang gua paling suka belajar dari dia,tentang kenyataan yang ada di Perancis, yang gak pernah kepikiran ama gua. contoh di paris ini, biaya anak sekolah kita gak bayar ke sekolah, tapi ke mairie seperti kecamatan, tapi kadang kadang juga setingkat walikota. Mairie ini yang akan membayar ke sekolah sekolah sesuai dengan unit costnya. Mairie ini sangat sangat independen, bahkan hari ini sedang ada kampanye pemilihan di daerah 15 arrondissement, tempat apartemen gua berada.I'll get back to this later.
Biaya anak sekolah, dalam hal ini di tingkat universitas, sangat beragam, tergantung dengan tingkat pendapatan orang tuanya. Kawan gua, sama sama penerima beasiswa, anak semata wayangnya di ecole primaire (semacam SD) gak bayar sama sekali, alias gratis, karena tingkat pendapatan penerima beasiswa-boursier- dibawah tingkat makmur perancis
lain halnya dengan tingkat skolah di atas universitas. ini tingkat biaya sekolah beragam, walau tetap bisa dibilang sangat rendah. Mahasiswa dengan tingkat pendapatan rendah tidak membayar pajak,akan tetapi mendapat banyak tunjangan dari pemerintah, lain halnya mahasiswa dengan orang yang berpendapatan tinggi terutama tingkat PhD, mereka harus membayar pajak yang tinggi, sekitar 20 persen gaji setahun.
Konsep ini berlanjut sampai tingkat terkecil, seperti misalnya harga makanan kantin sekolah, juga diatur seperti itu (walaupun ini lebih bersifat pungutan tidak resmi), anak yang berasal dari keluarga tidak mampu akan membayar lebih sedikit dibanding yang kaya, untuk barang yang sama.Caranya? mereka akan kasih kupon pembelian setiap membeli, dan tiap bulan orang tua akan di kenai biaya unit dikali dengan harga yang telah disubsidi.Untuk level universitas juga begitu, ada yang namanya CROUS, yang menyediakan makanan murah tapi sehat+ kenyang, dengan 2.75 euro kita bisa makan enak di cafetaria nya bagi level pelajar, sedangkan buat level pekerja, mereka akan dikenai biaya yang dobel. Ini terus terang, bagi gua menarik,terutama karena ini sudah dimulai dari sejak mereka sekolah taman kanak kanak.
Sebagai orang yang mengaku belajar ekonomi, insting gue langsung bilang, wah itu resiko menghasilkan free-rider, bisa saja anak orang kaya bilang ke anak miskin, "lo beliin gua itu dong, ntar gua bayar ke elo", well bisa saja, tapi sepertinya itu gak kejadian, kenapa? karena anak orang miskin juga pinter, dia tau, opportunity cost untuk jadi antek antek orang kaya ini,dia bakal lebih worst off. Dan lagi lagi yang paling penting adalah ini dimulai dari usia sejak dini yang dipahami oleh anak anak. Bahwa rent-seeking temptation sudah dikenalkan sejak dini, tapi tidak melembaga sedemikian rupa, menurut gua yang sangat menarik.
fakta lain yang menarik adalah, dorongan entrepreneurship sangat tinggi disini, orang bisa datang ke kadin paris (chambre de commerece de paris) untuk dapat informasi tentang pekerjaan yang bisa dilakukan, sekaligus info untuk mendapatkan pendanaan, dana sangat melimpah(terutama bagi penduduk asli)Bank seperti berlomba memberikan pendanaan.Hal yang sama juga di informasi tenaga kerja,jarak beberapa rumah dari tempat gua ada semacam pusat informasi pekerjaan,belum pernah masuk sih, tapi ruangnya di desain transparan,dinding nya cuma kaca besar,jadi kita bisa liat apa di dalamnya tanpa masuk. Satu ruangan besar isinya penuh dengan komputer, kita hanya tinggal log on, cari tawaran kerja, dan lowongan yang kira kira bakal ada.
hmm lowongan yang bakal ada? maksudnya? nah ini juga yang menarik. Ini semacam kombinasi social security yang baik dan departemen tenaga kerjanya. Karena Social security yang sangat baik, setiap individu dari kecil sampe tua terjamin oleh asuransi dan dana pensiun, dari mulai asuransi jiwa, sampai asuransi kesehatan, artinya ada consumption smoothing yang sangat baik. as a result,orang yang sudah masuk ke usia lanjut,gak perlu bekerja, hidup mereka sudah terjamin dengan tabungan dan investasi, tambah lagi setiap masalah yang tak terduga ditutup oleh asuransi.
jadi setiap kali para pengusaha ini pensiun, mereka yang tidak memiliki penerus akan bilang ke mairie atau chambre de commerce. "Nih usaha gua, gua mo nikmatin idup, tolong terusin,atau jualin aja ama yang mau",dengan adanya sistem ini lowongan kerja dalam skala tertentu menjadi predictable, di tahun 2008 misalnya,tiap tiap camat disini tahu, ah, kita bakal punya 5 tukang roti yang pensiun, 10 tukang daging, dan 10 pialang saham,so,mereka bisa tawarkan ini pada orang yang gak punya pekerjaan.
kekurangannya sih,sistem ini gak applicable buat orang yang berpendapatan tetap, untuk mendapatkan fasilitas informasi ini, orang tersebut tidak boleh bekerja, atau recently being laid off,jadi orang yang bekerja tapi ingin investasi lagi, mesti gunakan "sistem convensional".
Memang pajak pendapatan sangat tinggi, akibatnya pengangguran relatif tinggi sekali di perancis di banding negara eropa lain yang lebih terbuka,level pengangguran terjaga lebih karena kesepakatan pengusaha dengan asosiasi pekerja yang aktif sekali. terutama paris.
yang lebih menarik adalah tingkat inflasi yang rendah dibanding negara asia, tapi relatif tinggi buat negara eropa secara rata rata,yang by the way cenderung meningkat terus. I'll comeback to this later.
Sistem eropa barat memang sedikit sosialis,tapi tidak kebablasan seperti negara negara eropa timur. Gue melihat penting banget negara kita ngadopsi sistem ini, gua melihat diri gua sebagai orang yang liberal,tapi konsep perancis ini, terus terang, I find it very interesting. Konsep BOS misalnya,selama ini selalu diselewengkan, karena orang tua murid, berinteraksi langsung dengan administrasi sekolah, walau duitnya turun, masih saja ada benefit untuk curang. Lain halnya jika administrasi berinteraksi dengan Camat, atau walikota, dia tidak punya bargaining power buat ngontrol walikota, tapi justru sebaliknya. Sedangkan walikota juga "terpaksa"
mengawasi kepala sekolah, karena terpilih tidaknya dia di tahun mendatang, adalah tergantung kepada ada nya dukungan orang tua orang tua murid itu.
banyak sekali sih yang bisa diaplikasiin di indonesia, sayangnya lagi lagi kita punya masalah di diseminasi informasi dan transparansi, di norway bahkan katanya kita bisa tahu berapa jumlah pendapatan orang di sebelah kita, hanya dengan search engine di internet,asalkan kita tau nama lengkap dan pekerjaaanya. itu yang gua sebut diseminasi informasi, transparansi. data data dan data yang akurat.. smua cita cita ini gak akah bisa terwujud secara tiba tiba, tapi perlu Hukum dan institusi yang mengawal masyarakat ber transformasi dalam aktivitas bermasyarakat menuju ke tingkat masyarakat yang lebih baik.
ps : ini ada satu contoh dari norway cara mengatasi prostitusi
ps : blog post updated karena ada kritik membangun dari mas Rio Hasan
5:13 PM | Labels: economic development | 10 Comments
Why should rich people got rich? it's the matter of seeing things differently
the blog mentioned some data, but kinda outdated, but whatever. she mentioned poverty rates in 2006, but accommodating Bakrie's richness in 2007 in comparison. First of all, those data is incomparable .Bad mistakes. if we see the newest data, indeed poverty decline as well, not very larged though. the idea is here, the growth has positive effect on everybody, notably the rich and the powerful though. In this I agree.
I don't see any problem with this, not that I'm pro-inequality, it is the fact that all nation is having, in all part of the world. As long as rich people got richer, and the poor people got less poorer, it's kinda OK for me, well better than poor people got poorer, no?
I mean, the very problem of inequality and poverty is that, we don't know exactly what are the determinants, in my opinion it's most likely social -interaction problem, rather than Macroeconomic problem, it's the information sharing, not the problem in growth. Off course inflation got higher effect in the short run, but really, access to credit, and information is kinda better in explaining long term poverty.
may be my post is kinda strange for one studying development, what I am saying is that it is normal that people get rich everyday, as long it doesn't take the proportion of the most poor people, in Aburizal bakrie's case I am not convinced enough the reasoning is, what's for sure, not because he has bakrie's plantation(the blog mentioned these reasons), it's more like better preferences in BUMI resource's stocks, keeping the price higher than ever. Complaining that these people got our natural resources depleted for their own wealth is kinda odd, let's say we'll give poor people couple of hectares of land in kalimantan, what would they do? -this is typically what Venezuela do-, their resources are now underutilized, not only the people got no knowledge to use it properly, but also when they want to sell it, no one will buy the land, so what's the use of having hectares of land, but unable to use it?
let's go back to bakries problem.I don't know whether his wealth won't come from poor farmer in papua back there, but what do I know is, when he got rich, he need to invest, meaning more jobs, so to measure the effect in bakries richness to the people, is how much real investment will come in the future?. indeed, Lapindo did take some people's home, but its (lapindo) loss is not to be neglected either. So while having devastated by the loss in lapindo's assets,it still gives him larger flow of money, meaning he got more gains in other investment (I do Pity the fact that the money comes from financial market) but it measured how this guy/company can handle unexpected shock, hopefully he will create more investment in the future, and more money to the poor. I believe it was called trickle down effects.
I praise the non-communist term, saying that free economy give people a relatively equal opportunity to be rich (and to be poor?), than Communist term. The whole idea of market economy is that all things are dynamic. Ones can sometimes moving out of poverty, and sometime moving in to poverty, the same case goes to wealthiness. People can be poor but in subsequent period got surprisingly rich, for randomized reasons. But in communist term, people should always be equal, should share the same burden in poverty, in their thinking, being poor together is better than having wealth gap, as poor people will always be victimized by the rich. so just eliminate the gap, so every people share the same despair. This is awfully wrong, in the sense that, it's true that most people got rich because their family had been rich for some time, but there are cases where, once poor people might in the future turned out to be one of the richest people in the country, these kind of people that will survive in this horrific competition world.
10:42 PM | Labels: economic development | 3 Comments
Rodrik for president
Wow. I was astonished with the paper, how it dismantled the augmented Washington consensus
at first, I think John williamson's revised WC would be good enough, but no, rodrik explains it better.. personally, i'll vote him for president of WB, or may be replacing monsieur Bourguignon?
Had I been Sby, I'll contact Rodrik first for suggestions, than fernando de soto..
or may be Rodrik for president in our republic? no..no...no I'm talking non-sense
hmm..did I?
update :
Arya gaduh post the much shorter resume of the paper
6:35 AM | Labels: economic development | 0 Comments
short sighted or domestic love bias?
will never share the same idea with them, ever!
their deductions have lots of flaws everywhere, what were they thinking?
First, we need to see this world as a whole of opportunity, of working, socializing, getting higher salary, higher satisfaction in life, avoiding traffic-jam, etc, lots of incentive to move to other countries. we should not have limited the scope
Second, about people becoming illegal workers, what's the problem? do they want to be illegal workers in the first place? no, I don't think so, thus comparing it, or even worse,blaming it to the lack of job demand effect in home countries would be even more misleading. People goes abroad every day, people seek more appropriate job all the time, what's wrong with that? in this case, it happened to be that they are looking for it across countries. then what makes them ilegal?
what makes them illegal, is that something, or someone identify them as "unexpected workers"
or unidentified workers,who's to blame? the guy who got the power in extra-territorial authorization, why don't these guy's ability to move in labor market was -whatsoever the means-, happened to be somewhat undetected ?
Third,let's say, I'm rich, I work in highly reputable company with high salary, should I stop searching jobs?. well, could be, but if I'm trying to get more salary, with a more reputable company, should that considered to be wrong?.
Their conclusion seems to be kinda odd for me, since they are assuming as if the country is rich, people should not look for jobs somewhere else,I would say, mind you!, if people got richer than ever, they will look for something else..that's stated in qur'an, and as long as it's halal, nothing's wrong with it..even the first man on earth got the same problem, no? I mean,seeing that we all his descendents and all, that's probably human nature.
and so why blaming economist? should you blame the immigration people instead? having those actively demanded labor, constrained in the borders, forcing them to jump over the fence, without adequate papers on their hands
the sad thing is, the guy saying this hold an economist title in his e-mail, funny he?
6:15 AM | Labels: Labor market | 2 Comments
poverty and institutional path dependence
The initial point of causes of multiple equilibria in economic development is the fact that Inefficient equilibria tends to self-reinforce, whenever there is an inefficient equilibrium, there is no reason that convergences should happen, but instead, would stabilize the polarization process, and hence a multiple equilibria.
The main idea of institutional effects on economic development is that individuals are bounded rational; their rationality is embedded by the environment and their subjective experience, inference and individual deduction. As a result, market transactions are not always happen in the most efficient ways since people has limited ability in calculations and output processing, and therefore transactions are costly, institutions are then created to reduce these transaction costs, uncertainties and overcome market failure. Hence institution matters.
Institution have significant contribution to poverty through two channels, first, bad institutions make market can not function appropriately, hence market is unable to resolve the most efficient output for everyone. Second, the institution itself could be the source of inefficiencies. Furthermore, Institution failure ignite poverty trap, because of its durability and path dependency.
First, Institutions were meant to overcome market failure, however, institutions are created and enabled by the current ruling political power, which tends to use the institutional laws to maintain their supreme power. as North (1993, p.3) has emphasized, “institutions are not necessarily or even usually created to be socially efficient; rather they, or at least the formal rules are created to serve the interests of those with the bargaining power to create a new rules “. This might resulted in an inefficient economic activities and rent-seeking behavior. Second, the path dependency of institutions is also because it is inherent in the way that informal norms form the foundation of community, at least for informal institutions which are unlikely to change in short term period. Third, Bounded rationality of the agents is itself a source of self-reinforcing inefficient outcomes independent of institutions the inability to escape from environment effects often trapped individuals in practically herding behaviour. The three Self-reinforcing mechanism potentially cause the Poverty trap
6:33 PM | Labels: poverty | 1 Comments
cross posting a little bit won't hurt..
Rajawali adalah salah satu jenis burung yang selalu terbang sendiri, tidak pernah terbang bergerombol atau menunggu kelompoknya untuk terbang bersama-sama. Rajawali tidak pernah takut akan badai, bahkan ketika badai datang Rajawali terbang lebih tinggi lagi. Rajawali juga tidak pernah memanjakan anak-anaknya. Apabila sang induk menganggap anak-anaknya sudah siap untuk terbang, maka sang induk akan merusak sarangnya agar anak-anaknya “terpaksa” terbang dan mencari makan untuk dirinya sendiri.
Ketika Rajawali merasa hidupnya akan berakhir, maka dia akan terbang setinggi-tingginya ke arah matahari, sampai mati dan jatuh kembali ke bumi. Seolah-olah diakhir hidupnya dia masih berusaha mencapai “prestasi” setinggi-tingginya.
Well, for a start, Rajawali muda was the name of Apache-indian tribe,who save all the rest of red skins communities in the karl may's book, buat thanks for the inspiration.
9:30 PM | | 8 Comments
diminishing utility?..,mind you...
This morning, me and my friend,while finishing our breakfast, we spent some time browsing the net,in the sudden, we were then discussing intensely the "anggota DPR m***m",after some time browsing the news, we came to "gossip time", AA gym getting married for the second time, even I consider it as individual rights, and that doesn't bothered me at all. it occured to us,however,normally, men, tends to have an increasing beauty of scale in Polygami. the second wife tends to be better thatn the first, and the third one might be even better than the second.
Even I do agree that the term "better" is highly arguable, but still Economics is surely against such utility maximizing, well, so much with Marginal Diminishing utility...
i wonder, is it true that whenever we're considering women,then people is naturally irrational? yet, transitivity doesn't work as well..
8:03 AM | Labels: microeconomics, utility, woman | 11 Comments
Coordination failure of job ( part 2)
Lets get back to the case of one guy hired at the MT’s, my proposition is, whenever a guy apply to one position without knowing that that’s her/his true preference, or whether that’s her/his second best choice, this could creates a grave coordination failure that should be even worse over time.
Whenever a company hired someone, it means that they are investing in that particular guy, what if the case of Rosenstein has pointed out occurred?, Just say that this hired guy is not –in reality- as capable as was shown at their CV, you are over invested him, a fresh-university graduate with lack of experience will do nothing, then the W is higher than his MPL, people on the top starts to worry, and displeased, enforcing the guy to work out off his limit, finally the guy just went out. Let’s say that the company getting a new fresh-employee, in contrast to the former, he is very diligent, and quite significant in increasing profit, the problem come up with the salary, because at that time, managers is cutting the position’s wage level, due to disappointing productivity before. This time the wage is way under the productivity, and so on and so on. The market mechanism without this stupid coordination failure will converge the MPL and wage almost simultaneously.
The problem that seems to be similar with Rosenstein and rodan’s case, is that over investing to one, means under investing to another, and the variance of over and under investing, (that is the variance of MPL-W =0) there are jobs that if the investment were right would initiate a greater effects in revenue and becoming greater each year, and there are jobs that is becoming less and less important,(under-developed?)in one company.
Hence,this is basically, the right man in the right place, in a perfect timing, but if we look more deeply, there are people who are so specialized, hence they could not move flexibly, change their jobs, and trapped in an unfavorable job, in the sense of salaries, fringe benefits, etc. In my opinion, that's would be one of many possible micro-explanation why, there are people who's continously trapped in poverty. Coordination failure in the job market.
off course,we should apply the coordination failure example above to various other job decision making. For instance why people morelikely to choose civil servant than an entrepreneur,or others.In my point of view, following Bannerjee et.al. that would be one of reason why people tends to be poor, and always be poor.
3:48 AM | Labels: Labor market | 0 Comments
overconfidence and coordination failure (part 1)
Early in the morning, I’ve read one of their jokes already.
It reminds me of the problem that make him receive a nobel, Coordination failure of the society, what would happen really if all people like these guys turns out to be the ultimate winner of the job market? Well nothing wrong with that really.
Ok then, first of all this man -à mon avis- is way out of his mind, really, applying for something that- I figure- he doesn’t have any knowledge about it. This is the case of some imperfect market that Akerlof has shown, in his famous melon theorem, and the used car market case. The thing is, the imperfect information of market of jobs creates two fundamental problems, adverse selection, and a moral hazard. In fact there are two ways direction of moral hazard, and adverse selection at one blow.
Consider it this way, neither of the two, the supply side of job (the one seeking for job), and the demand side (searching for employee) have adequate information about each one of them, as a result speculative attack appears to be the only solution. It seems to me that the job information in the adds is not sufficient enough to control this imperfect information, it was clearly defined, that his capacity is not even adequate to apply, instead, this guy apply anyway, even such more qualified guys-that is fresh-undergrad educated guys- would prefer to apply a more appropriate job, instead of applying as a manager.
As a fresh-graduated, -as we all have been there- this guy is desperate to have a job, and he didn’t understand what to do after his college, and then he starting to do some random-non-linier job application procedures, anything, anything he could ever think off, as long as he could find “management” word in the job seeker adds, the problem is they doesn’t even know what kind of job, -even worse- what kind of company he was applying. Therefore there are possibilities that this guy- who think he was totally expert in management, yet his limited experience- would choose the wrong job.
The company on the other hand, will never ever be able to even guess what is the real contribution of the future employee would be to its income, there are possibility it underestimate-or overestimate the marginal productivity of their future employee, which reflected on their wages, furthermore, companies will never be assured by the behavior of the workers, whether they going to be risk averse kind-or –kutu loncat – type of workers?
These imperfection leads to coordination failure in the market, resulting MPL= wage will never be achieved. Companies, naturally developed some other kind of screening process, called-management trainee-(MT in short) well, now they have many kinds of name, it almost the same anyway. Desolately, this MT programs is easily adopted, with relatively low benefit-cost gap, then suddenly fresh grad working as an MT in Bank Mandiri, and MT in some un-identify Company object’s MT would have slight differences. The same thing with the example earlier, the term “manager” and management would be biased to some imaginary working status. In short MT it self is a mystery for jobseekers, and CV’s is still one of the best tool of -fresh-graduate-job-seeker- to lie about their productivity potential. MT’s is also famously recognize for its difficulty and long time recruitment process, this hopefully will reduce this imperfect information would lead to the moral hazard and adverse selection. My conclusion : that’s true for Adverse selection (still in doubt, though) but not for the moral hazard.
Let me tell you a problem of a friend of mine, after completing its degree in an immense success, he tries his luck in MT program in a well known national Bank, as expected he passed all the easy stuff phase, at the last interview, he was a little bit worry at that time, this one is not easy, because interview is sometime a little bit unpredictable-well that’s what interview’s for, but there was some unbalanced information there, my friend has already knew the general questions in the interview, -based on his experience and some other hints from friends-. In the other hand the interviewers knew nothing about him, than what’s happened is the question was easily responded, and finally he was recruited.
Is it the problem of adverse selection solved? Well in this case yes, the bank has even over benefited so much in recruiting him. But not the moral hazard, after some time, my friends then find some other more interesting jobs, and scholarships abroad, as a result the on the job training is now become less favorable, my friends left the company, in the expense of some fine. Now that is clearly a moral hazard problem, he was forced to pay the cost of the company has spent for recruiting and training him, but still, this would be such a completely waste of time and a waste of resources for the company.
Well we’re talking about a bank here, weren’t they supposed to be the one who handling risk? Well they weren’t really good about it don’t you think?
(to be continued....)
1:58 AM | Labels: Labor market | 2 Comments
poor farmers and price..

Well this morning, digging up to one of my favorite blog, founding interesting article,Oke then, some questions revealed, whether rising price of rice would hurt the farmers or not?, well that's an old story i have had in the past, and really, till now, i'm still wondering why would that (ever) happened anyway.
The Quarrel between works of economist in development economics, in a certain manner would however change a cross time. My guess is the man, from whom kompas has quoted his words in this article is an old fashioned (-outdated-) one -if I say he to be an economist though.
What he’s arguing is a nowadays still being such a controversy among development economics, is it rising price of rice would make farmers better off?, or weather farmers will increase their production as a result of price effect?, would the income-marshallian effect would eliminate slutsky substitution effect ? Well I would say, that depends, depend on where do you look, what do you seek, and when.
You see, that’s the problem being Political economist, you’ll never be, or consider to be neutral, though I should say Economics were never been neutral anyway, but policy must be neutral, neutral with what you keep in your tiny head, cause your head could not keep up with all complexity in this growing market economies. Neither if you are market fundamentalist, nor I should say Structuralist.
That’s why I’m completely disagree with people consider themselves as an economist, development economist, talking to the news, about policy, without solid facts, they are nothing but politician need some vote for another election campaign success.What these guys were telling the news is that Farmers are often abused by the global market, and therefore we need to accelerate their income by keep the price (of rise) rising, well guys reveillez-vous … have you heard anything with such a complex problem with agricultural households? There is a problem called Separable problem, agricultural household is facing two intertwined problem in the same time, therefore their profit maximizing condition were constrained in a non-recursive way, and instead simultaneity occurred.
Even when price is rising up to the sky, farmers will surprisingly might reduce their production, and therefore cause a higher gap of income, cause the price effect is not only the rice, it multiplies a lot, through the other consumption goods rising as well.
So when will farmers will have a greater profit, and becoming rich?, frankly I don’t really know, what the answer for this, anyone has a clue? I’ve been thinking about this since I was studying Introduction to Development Economics, well I suppose that farmers will get better off by increasing their production, not by raising their price, because their welfare is endogen to the price.
Nevertheless some research as Benjamin(1992), Pitt and Rozenweig(1987) has proven that there is no such things like separability condition in Indonesia, well I think they have overrated our country, first of all, their research is only conducted in Java region, could not aggregate their result though, What happen if this separable thing were concentrated in some areas without adequate source of water, with pathetic quality of soil? What if Jakarta is so polluted, then what happened in Jakarta, would be totally different with what happened in Papua for instance. Secondly, their stories were way out of our time, it’s been almost 20 years now, and were facing a lot of up and downs in our economy. Thirdly, these researches were concentrated in labor market imperfect market, in a general term. Off course there should be another way in having another conclusion totally way around.
Another thing to look more precise is that often, the cause of separable is complex, it might comes from any different kind of market imperfection, and even the source might come from one market that is totally perfect ,why? Well because this one single market that is ironically perfect has caused some other market imperfect.-this is inspired by some of easterly critics of multi tasking of MDG-
Looking to the facts on the field, people has a large constrained of collateral, thus access in credit, Farmers have a large barriers of trade because no easy access to the market, then the transport cost is high, people in the mountains were so isolated that their cultivated their land on and on without sufficient fertilizers, there is too many imperfection against the farmers, and I agree that these guys need help. But saying that rising prices of basic needs is a fair deal for consequences of oil price shock, is confusing and misleading.
Instead of using our budget for subsidizing rice, we should increase the ability of trade and access on information, by giving them decent infrastructure, friendly bureaucracy, cutting some hands in the bureaucracy in export and import for example, do you know that rice produced in Thailand is far more “pulen” and More tasty, and it smell so good, that people would prefer buying it than other cheap rice. Here, thousand miles from Thailand, we eat Thailand product, and we pay in euro, and no indo-rice product made it to come here. Anyway how many Indonesian people, having opportunity to go abroad, who consume Indonesian rice, if they already had a chance to have Thailand rice? not many I guess, with a small disparity of price I’d prefer to let go my nationalism in rice, though.
You may argue that they are dumping their products, I would say, if they do that, why don’t we do the same thing? We import rice from Thailand, which is relatively cheaper, and then we export, say to France, all of our commodity, or may be even exported it to Thailand, in the end, the price would converge, and the only thing that that we could use in comparing the two is their quality, that is our base line, and In the end, no one will buy our rice, since we’re consuming the same Thailand rice.
So the bottom line is, the problem is not what Thailand has did with their price, but also why they could make such quality well known to the world. Another example is another close neighbor of ours, Vietnam, they Exported many kinds of things, small agricultural things, like chilies, spinach, etc, noodles, fisheries, fast food-kind of things, that were really fancy in this country. As a result, their price goes up, with a single addition in their package, a usual package of frozen “tongkol” mixed up with ingredients, will change to a well prepared Vietnam gourmand, with a little help of Microwaves, and so is fast food, we could get a tasty Chinese foods by buying all the ingredients available here.
A strange thing here is Indofood, and KOKITA stuff were easily found here, but no Indonesian imported it, it licensed to some Indian company, in contrast, Chinese supermarket “tang frere” were amazingly famous, and we can find all asian taste ingredients there, even Indonesian’s sambel oelek, what I’m going to say about this is that,global market were not so racial to the agricultural goods, the thing is you to improve your quality, your package, your additional values, and yet the most important increase your market potential. That’s where Chinese success came from, they have already ruled the world, even before Chinese open up their market. That’s why we always find Chinese restaurant every where, Chinese banks in every corners of the street of Paris.
What's I’m saying is, if you want your farmers to be rich, stop them of being a farmer and a farmer only, and becoming a farmer and entrepreneur at once, farmers in Indonesia were so characterized with lack of education, and information, they lack of source of money, but they need education and information the most,that is the information to reveal what is the real meaning of globalization, what is to have freedom to choose. And how they could sell their product, off course we have no means to give such policy like the common agricultural policy in Europe, and certainly we could not let the farmers hurt by the prices.
But still do not give up hope, we could make it, as long we stop complaining, and stop listening to politician, pretending as an economist.
5:28 AM | Labels: poverty | 4 Comments
