Saturday, April 20, 2024 | 10:47 WIB

Leaky economy: A problem and solution passed on from Soemitro to Prabowo

Fahri Hamzah
Vice Chairman of the People’s Representative Council of the Republic of Indonesia (Dewan Perwakilan Rakyat Republik Indonesia – “DPR RI”)

IO – From the island of Sulawesi, I am writing about “Leaky Economy”, a matter as elaborated by Presidential Candidate Number 02. This is because it has been a hot topic in the news; however, Presidential Candidate Number 01’s response was a lukewarm “Just report any incident of leakage to the authorities,” even though many have been arrested red-handed for it.

Let’s try to discover what’s in the mind of Pak Prabowo as a presidential candidate. I believe that he has strong reasoning behind his statements. In the presidential debate five years ago, when Prabowo said that our economy is leaking, almost everybody laughed (mostly Jokowi supporters). After nearly five years, they stopped laughing because Pak Prabowo’s “Leaky Economy” analysis has come true. Earlier, the Government said that we have money, but its debts continue to pile up. Money, which is the lifeblood of the economy, is all indebted.

How did this happen? Because in fact, our economy has leaked, as Pak Prabowo said. Evidence mounts by the day: the State Budget robs Peter to pay Paul so often it has become a tradition. We make new debts simply to pay off the interest of old debts every year. This is something that even Bu Sri Mulyani, our Minister of Finance, is forced to admit.

The worst trade balance deficit also occurs at the tail end of this Government’s rule. This deficit means that we lose a great potential for getting foreign currency because our imports exceed our exports. Our money is leaking out the country. Pak Darmin Nasution, our Coordinating Minister of the Economy, admitted as much.

Pak Prabowo’s Leaky Economy narrative is deep-rooted and strong. I am certain that it does not appear out of thin air. I remember how, long before he became a Presidential Candidate, long before his party Gerindra was born, Prabowo entered politics by offering his ideas to campuses. He bravely entered campuses and entered into debates with his ideas of the economy and nationalism. He kept on warning everyone about Leaky Economy for years. This narrative is now compiled in his book, Paradoks Indonesia (“The Indonesian Paradox”).

Again, this is a strong and serious narrative. Furthermore, it is stated by Pak Prabowo, whom I believe is no small fry in Indonesia’s political and historical landscape. Everyone might know “who” Prabowo is, but not everyone knows what occupies his mind.

During the days of the New Order, a senior economist dared to criticize President Soeharto and remind him 30% of economic development funds have been leaking out during the New Order. The criticism was announced during the 12th Indonesia’s Bachelors of Economy Association (Ikatan Sarjana Ekonomi Indonesia – “ISEI”) Congress in Surabaya in 1993. This 30% figure came from an internationally-acknowledged economist, the economic pundit Soemitro Djojohadikusumo. In other words, Prabowo Subianto’s father. This criticism was both and honest. It was stated straight out before Soeharto, who was both the leader of the powerful New Order regime as well as the father-in-law of Soemitro’s son. It was true and prophetic, as Indonesia suffered a crisis and the New Order regime fell a mere 4 years later.

Soemitro is an economic pundit whose contribution to Indonesia’s economy, as well as his sense of nationalism, is undoubted. He was appointed a Minister five times, both during the Old and New Order regimes. He also held the prestigious post as a member of the group of top five experts in the UN. His sobriquet of “Indonesia’s economic pundit” is well-deserved, because it was he who created the initial framework of Indonesia’s economy; it was he who shaped the minds of Indonesian economists after him. He founded the Faculty of Economy of the University of Indonesia, the ISEI, and the think tank the Economic and Social Research, Education, and Information Agency (Lembaga Penelitian, Pendidikan dan Penerangan Ekonomi dan Sosial – “LP3ES”) that historically generated the expert economists of the nation.

Pak Soemitro earned his doctorate of economics from Erasmus University, Rotterdam, at the age of 26. He directly went on to become a staff member of Prime Minister Sjahrir afterwards. Soemitro also wielded a great influence as the executor of Bung Hatta’s economic strategy. After the Round Table Conference (1949), where the Netherlands acknowledged Indonesia’s sovereignty, Bung Hatta directly ordered Ir. Djuanda and DR. Soemitro to fly from the Netherlands directly to America to negotiate a credit of USD 100 million with the Director of the Export-Import Bank of America. Hatta’s economic strategy was to accelerate the transformation of Indonesia’s economy from a colonial economic system to a national economic system. The USD 100 million is meant to be the capital for the foundation of our national basic industry. This is part of Prabowo’s father’s contribution.

On his return to the Homeland, Soemitro was appointed the Minister of Trade and Industry at the age of 33. His economic program, known as the “Fortress Economy”, included the establishment of Sriwijaya Fertilizers and Gresik Cement. These two factories went on to become giants that are the foundation of our nation’s industrialization and agriculture. During the New Order era, Indonesia achieved food independence. This is part of Pak Mitro’s plan of development.

Soemitro never stopped contributing, even after he created the economic framework of both the New Order and Old Order regimes. He wrote many books and papers, both nationally and internationally. His achievements were such that his alma mater, the Erasmus University, awarded him with a honoris causa title in 1995. As Prof. Emil Salim stated in his article in Kompas newspaper at the time (23 November 1995), Soemitro’s name was mentioned alongside other exemplary alumni of Erasmus University, including Nobel Prize winner Jan Tinbergen.

Soemitro was so honored that when it was his turn to be awarded, the all-Dutch musicians at the event played the gamelan score Caraka Kembang for him. The award event itself was attended by world political and intellectual figures, including then-Prime Minister of the Netherlands Wim Kok and the rectors of tens of universities in Europe. This is one of the nation’s finest sons – an economic pundit whose ideas and services must never be erased form this nation’s memory.

As I see it, what Pak Prabowo has been stating lately is nothing more than the inherited spirit and ideas of Prof. Dr. Soemitro. Prabowo’s criticism of our “Leaky Economy” was rooted in the ideas he inherited from his father, the great economist Raden Mas Soemitro Djojohadikusumo, the pundit who designed the modern economy of Indonesia. The son has now appeared as a presidential candidate to pave the way to realize the father’s dreams and ideas.