Economic Development in Indonesia - In international reports many found the concept of "economic growth". The concept is in the Indonesian language can be interpreted as the result of economic growth as the economic development. Economic development means growth of production capacity in the economy of a country as a whole. Mathematically this definition implies a movement out of the production possibilities curve in the economy.
According to Meier and Baldwin (in Safril, 2003: 142) that "Economic development is a process, with the process of real national income grow an economy over a long period of time".
The same thing also expressed by Djojohadikusomo (1991) that "Economic development is an attempt to increase the per capita income and raise productivity per capita by way of adding capital equipment and increase skill".
When further analyzed obtained some general conclusions about economic development, as follows:
Economic development is aimed at structural changes that are qualitative.
Economic development does not just produce more output, but also there is a change in institutions and production techniques as well as skill in generating output.
Economic development include changes in the structure of output as a result of the allocation of inputs in the economy.
From some of these definitions can be concluded that economic development is an activity that is directed toward a better economic life for the people of a nation.
a. Indonesian Economic Development
Economic development of Indonesia implemented covers all aspects of the economy, society, community life both rural and urban communities, with the primary objective mempebaiki and improve the lives of all people in Indonesia. Economic development is carried out by focusing efforts on the growth sectors of the economy to take advantage of all its potential, both natural resources and human resources.
In order for the implementation of economic development can touch all aspects of the community's economy and equity outcomes, the government issued several policy directions of economic development.
b. Policy direction of Indonesian Economic Development
Centralized development and unevenly implemented during this apparently only prioritize economic growth and does not offset the social, democratic politics, which has caused the monetary and economic crisis, which almost continues with an alarming moral crisis. It later became the cause of national crisis (90s), which endanger the unity and integrity as well as threaten the survival of the nation. Therefore, reforms in all fields must be done to get back up and reinforce the confidence and ability to perform the steps penyelelamatan, recovery, stabilization, and development of a new paradigm of economic development with sound democratic Indonesia.
Actualization of the reform to the issuance of economic development policies contained in the Outlines of the State Policy of 1999-2004 (MPR Decree No. IV / MPR / 1999).
In Outlines of State Policy 1999-2004 set the direction of development in the field of economic policy, including:
Develop a democratic economic system based on market mechanism.
Developing a healthy and fair competition.
Optimizing the role of governments to regulate public services, subsidies and incentives, which is done in a transparent manner.
Develop a decent life, especially for the poor and abandoned children.
Developing a globally oriented economy in accordance with technological advances to make the most of leading sectors of each region.
Managing macro and micro economic policies are coordinated and synergistic.
Develop fiscal policy.
Developing a healthy capital market, transparency and efficiency.
Optimize the use of foreign loans for productive economic activities.
Develop industrial policy, trade, and investment.
Empowering small and medium enterprises, and cooperatives to be more efficient and productive.
Reforming State-Owned Enterprises in an efficient, transparent, and professional.
Develop partnerships in the form of business relations and mutual support and benefit between cooperatives and the State Owned Enterprises.
Developing a food security system based on the diversity of food resources, institutions, and local culture.
Improve the provision and utilization of energy resources and electricity is relatively cheap.
Developing a land policy to improve the utilization and use of land in a transparent and productive.
Enhance the development and maintenance of public facilities and infrastructure, including transportation, telecommunications, energy, electricity, and clean water.
Develop a comprehensive and integrated employment.
Increasing the quantity and quality of employment abroad with regard to competence, protection, and defense of labor.
Improve the control, development and utilization of science and technology, especially the national technology.
Perform various concerted efforts to accelerate the process of poverty alleviation and unemployment.
Speed up rescue and economic recovery in order to improve the real sector, especially for small and medium enterprises, and cooperatives.
Nourish the State Budget (APBN) by reducing the state deficit through increased budget discipline, reducing subsidies, and foreign loans gradually.
Accelerate the recapitalization of the banking sector and the restructuring of private debt.
Implement the restructuring of state assets, especially assets that come from the banking and corporate liquidation.
Conducting negotiations and accelerate the restructuring of foreign debt together with the International Monetary Fund, the World Bank, other financial institutions and donor countries.
Proactively conduct negotiations and economic cooperation, bilateral and multilateral in order to increase the volume and value of exports.
Healthful State Owned / Regional Owned Enterprises whose business is mainly related to the public interest.
Some of Indonesia's economic development policy directions above show that economic development is a series of efforts for sustainable economic development of the sector in order to improve the living standards of the Indonesian people to get out of the economic downturn.