The government will accelerate the disbursement of state budget funds to cope with the impact of the pandemic. We want to attain quality growth.
By
Kompas Editor
·3 minutes read
The government will accelerate the disbursement of state budget funds to cope with the impact of the pandemic. We want to attain quality growth.
President Joko “Jokowi” Widodo has pushed for rapid disbursement of 2021 state budget (APBN) funds, such as those related to the distribution of social aid, and he wants spending on infrastructure development to start this January.
In coping with the impact of the pandemic, the government has increased the 2021 state budget deficit cap to 5.7 percent of the gross domestic product (GDP). The budget deficit cap before the pandemic had been 3 percent.
On the other hand, the Covid-19 pandemic has changed many things, from ways of working and doing business, which now rely more heavily on the internet than before, to trade and cross-border travel.
The government has set growth targets to support the economic recovery. This year, the economy is projected to grow between 4 percent and 5.5 percent. On the other hand, the Covid-19 pandemic has changed many things, from ways of working and doing business, which now rely more heavily on the internet than before, to trade and cross-border travel.
Therefore, many experts have argued, there needs to be a new way to survive, especially when the goal of economic recovery is the welfare of the people.
GDP is the most widely used indicator of economic growth, but it does not really reflect the people\'s welfare. Three economists, namely Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi, in Measuring Wellbeing (2011, translation), expressed their view that GDP was not the right way to measure welfare. Even though those views emerged long before the Covid-19 pandemic, they remain relevant.
The three of them proposed to also take into account income and consumption apart from production, such as household income and consumption that reflect government services in health and education, taking into account the distribution of income and wealth; measuring nonmarket activities, such as services households produce for their own use; and taking into account people\'s income and consumption and the country\'s wealth, in the form of physical, natural, human and social capital to ensure sustainability.
Moreover, in the future, development is required to utilize sustainable natural resources in an inclusive manner making use of all human resources.
Currently, the priority for economic recovery is to help the most vulnerable groups in society. However, to attain quality and sustainable growth, the government needs to come up with new ways of measuring growth. Moreover, in the future, development is required to utilize sustainable natural resources in an inclusive manner making use of all human resources.
Economists Abhijit V Banarjee and Esther Duflo, in their book Good Economics for Hard Times (2019), also express the view that GDP is not the only possible measure of growth. It is important to allocate budgets in an accurate manner by paying attention to the most vulnerable and needy groups.
In the Indonesian context, economic recovery must fulfill the mandate of the 1945 Constitution, namely achieving a just and prosperous society, and this must be reflected in quality growth indicators.
(This article was translated byHendarsyah Tarmizi).