Sebenarnya bukan paper sih, lebih ke bahasan ringkas (1000 kata) tentang salah satu tema makroekonomi yang dibahas di kelas pas kuliah atau konsep-konsep makroekonomi yang kita ketahui, nah bagi saya makroekonomi ini menjadi salah satu mata kuliah paling favorit selama kuliah, karena akuntansi itu terlalu science untuk golongan ilmu sosial, sedangkan manajemen terlalu "ngambang", nah ekonomi berada di antaranya, menggabungkan teori dengan kemampuan kita mengolah teori tersebut dan juga data-data yang ada.
Nah untuk tengah semester pertama, saya ngangkat topik tentang "Inequality Trap" alasannya sebenarnya saya nemu sebuah artikel tentang Inequality Trap, yang menjelaskan secara umum "perangkap-perangkap" ketidak-setaraan baik dalam penghasilan, maupun hal-hal lainnya, dan yang membuat saya tertarik adalah bahwa penyebabnya itu beragam, mulai dari "kasta" masyarakatnya, tempat tinggal, bahkan hal-hal seperti suku, ras, dan agama pun memiliki pengaruh atas ketidak-setaraan itu.
Nah, yang menjadi masalah adalah ketika teori atau pembahasannya itu menarik, tetapi apa yang akan saya bahas itu terlalu menyimpang dari konsep makroekonomi, jadinya saya memutuskan untuk menambah embel-embel "income" di depan frasa "inequality trap" sehingga otomatis mempersempit bahasan paper saya menjadi ketidak-setaraan penghasilan yang disebabkan oleh baik faktor makro ekonomi, maupun faktor non-makro, sehingga terciptalah paper yang selesainya H-2 jam ini, haha btw papernya dalam bahasa inggris, soalnya nilainya lebih gede dibandingin dalam bahasa Indonesia (100>85).
THE
INCOME INEQUALITY TRAP
Indonesia is a big country, in the
last couple years, it is famous for its stable high GDP growth rate, despite
the fact that most of the countries in the world facing a sharp decline in
their GDP growth rate due to the financial crisis. We sure proud of our
country’s achievement, but have we ever asked, who benefit most from that high
GDP growth?
According to Forbes, the number of
billionaires in Indonesia increased significantly to 26 people in 2011, which
ranked Indonesia at 5th in Asia and 10th in the world (tied with Japan) as
the country with the most numbers of
billionaires. In addition, Globe Asia,
Indonesia’s top business magazine reported that between June 2010 and June
2011, the total net worth of Indonesia’s top 15 tycoons rose nearly 75% to US$
107,9 billion, making Indonesia has the world’s fastest growing millionaire in
the world.
On the other hand, the number of
Indonesia’s population below the poverty line, only decreased bit by bit
overtime, it implies that actually, the number of poor people in Indonesia is
increasing, since we keep using the same standard (US$ 1 per day per person)
while ignoring the effect of inflation and the increasing number of population.
From this data, we know that actually the one who enjoys the growth is the riches,
while the poors are contrary still being poors. It proves that “The Income
Inequality Trap” in Indonesia do exists.
The Income Inequality Trap is a
persistent difference in wealth or income that are sustained over time by
economic, political and sosio-cultural mechanisms and institutions, it is the
condition where a country is like making the riches are getting richer but the
poors are still being poors. This situation can be caused by either changes in
taxation (especially the rates), or globalization (which leads to technological
changes and market talents). Non economic factors such as discrimination can as
well cause the inequality trap. Whichever the cause, income inequality trap can
brings negative impact to a country’s
economy, first, it can decreases the effectiveness of a country’s production, since it indirectly discourages the
labor to work at their full-potential, second, unchecked inequality may also
tend to create still more inequality, Edward L Gleaser, a professor of
economics at Harvard, argues that as the rich become richer and acquire greater
political influence, they may support policies that make themselves even
wealthier at the expense of others, and lastly, it also triggers some social
problems such as corruption and the rise of criminality.
How
about Indonesia? Statistic-wise, compared to other South-East Asia Countries,
Indonesia is considered better in the distribution of income, it is proven by
the lower gini index.
We can also say from the table below
that Indonesia has a rather stable gini index, from 1964 to 2007 the
fluctuation of Indonesia’s gini index is not that high, the highest gini index
at 0.38 happened in 1978 and the lowest at 0.32 happened in 1987,1990, and 1998.
From
the table above, we can also see that the Gini index in rural areas is much
lower when compared with the Gini index in urban areas, almost all countries in the world
experienced the same thing, because the fact is, people living in rural areas tend to be more homogeneous,
with the level of income that is not too much different. Contrary to urban areas, the population is much more
diverse, ranging from the very rich, to the very poor, that's
why the gini index in urban areas is much higher than rural areas. The table below provides more information about the gini index inequality between rural and urban areas.
why the gini index in urban areas is much higher than rural areas. The table below provides more information about the gini index inequality between rural and urban areas.
It appears that the expenditure is
more evenly-distributed in rural areas compared to the urban areas, for
example, in 2005, the bottom 10% of population in rural areas consumed
3,90% of total expenditures, while the top 10% take 24,55%. On the other hand,
in urban areas the lowest 10% income consumes only 2,87% while the highest 10%
takes 32,45% of the entire expenditures.
Then, the question is, how can Indonesian’s government
overcome this inequality problem? Basically, there are two policies that can be
taken by government, economic and non-economic policy, the policies are as follow:
1. Improving the quality and reach of education
For example, inter alia enchanced accountability for
schools, better teacher recruitment and training, special support for pupils at
risk of dropping out
and government
can also
decrease the
tuition for tertiary education so that the poors are not
excluded from tertiary education.
2. Fighting discrimination
Discrimination includes gender, religions, races, or
cultures, sometimes a job or even a salary is
too subjective to some races, religions or gender, so that people with specific
attribute can get more money than the other different attribute, so by minimizing the discrimination we can reduce
the income inequality.
3. Alter the tax rates
It is one of the most common policies done by countries in
the world, the simplest way is by changing the progressivity of income tax, the
more progressive the rate, the easier it is to prevent the income inequality,
another way is to boost the revenue from taxes, generally it can reduce the
inequality of income, although at the same time it can slow the economic growth, since this kind of policy dampens
the incentives to work.
4. Change the Cash
Transfers Mechanism
In Indonesia, the most popular cash-transfers mechanism is
in the form of subsidies, Indonesia has two main forms of subsidies,
electricity and fuel. To reduce the inequality, government can alter these
subsidies’ mechanism so that it will give more benefit to the poors and less
benefit to the riches.
Finally, as we saw in the tables above, we know that actually The
Income Inequality in Indonesia is considered better than other countries. Nevertheless, government should
consider to overcome this problem, because this situation can bring some major
negative impacts to our country’s economy, and also can potentially reduce the
welfare of indonesians.
Paper ini dapat nilai 91 hehe, walaupun kayaknya ga deserving banget, ada gambar n grafiknya cuma entah kenapa susah dimasukin di blog hehe.
"Washing one's hands of the conflict between the powerful and the powerless means to side with the powerful, not to be neutral"
- Paulo Freire -
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