Gus Dur and People\'s Economy

On Dec. 30, 2020, it was exactly 11 years since Abdurrahman Wahid or Gus Dur, the 4t President of the Republic of Indonesia, died.

People consider December the month of Gus Dur, like June is considered the month of Soekarno. Each year, in December, a series of events is held, which culminates in the commemoration of his death at his residence.

On Dec. 10, 2020, I was invited by the Gusdurian Network to become one of the experts at a discussion of the Forum on Populist Economic Strategic Issues. This topic has not frequently been examined, because Gus Dur has been synonymous with the movement for democracy, pluralism and freedom. He is rarely discussed as a figure who actually intensively thought and produced policies to strengthen the economy (of the people).

Taking sides and movement

Gus Dur grew up among santri (students of Islamic boarding schools) and fought together with the people. This background also formed most of his economic thinking, including when he was the president. His economic thought was upheld by five pillars and at the same time became the movement\'s praxis. First, he preferred to use the term "people\'s economy" rather than "populist economy" to ensure that what happened in the field was an economic movement controlled and carried out by the (ordinary) people.

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For him, the populist economy was often held hostage by elites, who claimed to fight for the interests of the people, but the economic resources were not fully provided and owned by the people. The implication was that the latter term only wanted to convey the notion of taking sides, not the idea of creating a movement, like the term people\'s economy. Thus, the people\'s economy had to be followed by control over the means of production, especially land and capital, and an established economic organization/network.

He wanted the Indonesian economy to stand on two legs: land and sea.

Second, the economy had to be based on local resources. That was why Gus Dur emphasized agricultural development (in a broad sense), including maritime affairs. In his day, the Maritime Affairs Ministry was formed to ensure that the fate of fishermen (not just farmers) was properly taken care of. There is no country whose economy stands without relying on its existing resources (endowment factor). He wanted the Indonesian economy to stand on two legs: land and sea. Two thirds of Indonesia\'s territory is ocean. So, it is natural that this sector is carefully managed, so that it becomes a source of economic progress.

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He also believed that the financial sector forms the axis of economic activity, whence the idea emerged to form a bank that was oriented toward rural areas (for example, BPR Nusumma). People\'s economic movements often end in failure because the important pillar of the economy, namely capital, never touches small economic actors. The economic blood does not circulate.

Third, food price stability was at stake in supporting people\'s purchasing power (including raising civil servant salaries). At that time, the State Logistics Agency (Bulog) was very effective in maintaining food prices. Farmers got good prices, and consumer purchasing power was strong because of the affordable prices. This policy combination was not easy to achieve, but it was achieved in a very impressive way.

KOMPAS/BAHANA PATRIA GUPTA

Dancers from the Gubuk Sufi Jabung Community with members of the Malang Gusdurian Community present a Sufi dance after the Christmas Mass at the Catholic Church of St. Vincentius A Paulo Langsep Parish, Malang City, East Java, Wednesday (25/12/2019).

The issue of food price stability was an annual ritual that continuously taken place for various reasons, which could be extracted from three main sources: instability in production, distribution inefficiency, and fluctuation in consumption. Production depended on the seasons and the weather, so prices fell during harvest and tumbled during times of food shortage. The supply chain was so long, thereby ensnaring farmers and hurting consumers. Consumption was often influenced by religious moments, such as Idul Fitri or Christmas, resulting in unstable volumes. Bulog was one of the anchors in overcoming this latent problem.

Curbing globalization

Fourth, economic growth went hand in hand with equity. A fantastic achievement was obtained when Gus Dur was the president: solid growth with equity. It took less than two years to reduce inequality to 0.31 in 2001 (from 0.37 in 1999). That was a record for the Gini ratio in Indonesia. This reduction in inequality was achieved when growth jumped high after the 1997/1998 economic crisis. After being negative, economic growth turned positive. Government debt was also reduced in nominal terms and in relation to the gross domestic product.

The tax ratio was increased, so that it became an important source of fiscal revenue to replace debt. All of this was done by relying on self-made recipes, not depending on the IMF and World Bank menus, which had failed in many countries.

Fifth, like Soekarno, Gus Dur believed in relations among countries that could foster each other. He was not an opponent of globalization. However, he took advantage of the opportunity to build economic cooperation with other countries that were considered strategic for strengthening the national economy, as well as having great influence on international stalls. Gus Dur initiated the Jakarta-New Delhi-Beijing axis, because the collaboration among the three countries was considered beneficial and at the same time reducing tensions between the two economic blocs (US and Russia).

Most of the developed countries, such as Japan and China, are supported by MSME products.

The condition for globalization to give benefits to the state, especially the people\'s economy, was that the formulation of domestic economic policies had to be solid. If most of the domestic economic actors were MSMEs, policies would be focused on strengthening and consolidating those economic actors. Most of the developed countries, such as Japan and China, are supported by MSME products.

In Japan, 54 percent of total exports were for MSME products, and in China 69 percent. In Indonesia, MSME players only contributed 20 percent of exports, even though the number of businesses was 99.8 percent and absorbed 97 percent of the workforce (McKinsey Global Institute, 2013). These data illustrate that globalization was utilized well by China, Japan and several other countries to create a clear background for people\'s economic endeavors. So, the keyword was solid domestic policies, so that globalization could be curbed.

People\'s economic diplomacy

Gus Dur\'s thought represented the marriage of two fundamental values: nationality and religious values. Nationality without a spirit of religiosity would be easily torn apart. Religion was a source of national values, but there was no need to draw it to formal ties to the state, because it would collide with scattered differences. He also believed that humanity was supported by a populist ethos, including unity framed on a stretch of diversity. Human relations did not have to overlap, because that was the essence of valid humanism.

His fatwa, which was more important than politics, was humanity. Humanity which was based on the embers of society, meaning the building of brotherhood and mutual cooperation as a basis for mutual prosperity. Unity could easily break if the stump was not an awareness of fighting for a common agenda amid a plurality of backgrounds. Unity would be eternal if it was bound by the rope of justice. This belief made him firmly defend Pancasila.

The basic framework for a state was later transformed into the politics of economic development, when he became the president. If postulated in a cluster of ideas, five prominent economic identities would be obtained. First, economic sovereignty was demonstrated by a democratic attitude that allowed the government to make participatory decisions and ensure control of economic resources by the people. Ownership of factors of production was the root of prosperity. Economic affirmation was not enough if it was not combined with the distribution of the means of production.

KOMPAS/DEFRI WERDIONO (WER) 05-06-2020

Members of the Malang Catholic Youth and the Young Gusdurian Movement of Malang City remove vegetable seeds that are still one week old from the nursery location in the Sanggar Anak yard, belonging to the Santo Vincentius A Paulo Catholic Church, in Bandulan, Malang City, Thursday (4/6/2020).

Second, the state was obliged to fight for development that relied on local resources. The agricultural sector (in a broad sense, including maritime affairs) was the nation\'s wealth that could become the flare of the people\'s economic movement. People\'s purchasing power would be strong, including the ability to buy food. Farmers and fishermen got decent prices due to the existence of food support institutions.

Third, the economy and people\'s economic organizations were the praxis of the economic movement. Economic resources were controlled by the people and consolidated through people\'s economic organizations, namely cooperatives. The agricultural and rural economic sectors were the essence of the people\'s economy, including efforts to establish a rural financial sector. This pattern would grow into a movement, not just to take sides.

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Fourth, economic growth and income distribution (equity) had to be achieved simultaneously. Domestic economic strength was the main fulcrum, not foreign debt or foreign investment. Domestic sources of development funding were optimized. Fifth, economic cooperation with other countries was focused on strengthening domestic economic potential, building a strategic axis, and being carried out in a spirit of equality. Globalization was pursued in order to take economic opportunities and enforce sovereignty.

If this is related to the current situation, many of Gus Dur\'s ideas have clear links. The government has taken sides with small businesses in the form of many policies, such as lowering taxes and credit interest. The decision just needs to be continued into the people\'s economic movement by strengthening the production factors. The agrarian reform program and social forestry have become the opening drawers of the economic movement, including special capital for small businesses. The equal distribution that was lost last year should be fought for again, so as to prevent growth to touch only the rich.

Kompas

Ahmad Yustika Erani

The marine sector is returned to defend the right to life of fishermen, not traders who were skilled at circumventing policies. All ministries/agencies and ambassadors are given the target of opening small business product stalls in international forums. "People\'s economic diplomacy" is a mandate that must be fulfilled by officials of the republic. After reading this, Gus Dur might say, “Gitu aja, kok, repot! (Why fuss!)”

Ahmad Erani Yustika, Professor at the School of Economy, Brawijaya University; Senior Economist of Indef

(This article was translated by Hyginus Hardoyo)