Not all scars show, not all wounds heal. Sometimes you can't always see, the pain someone feels

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Sunday, December 16, 2012

Consumer Confidence

Nah, yang kedua adalah tentang Consumer Confidence, yang ini lebih absurd lagi daripada yang pertama, soalnya memang waktu itu kehabisan ide mau bahas apaan, kalo yang teori di buku males, terlalu berat, haha, trus tiba-tiba inget waktu dulu pernah baca tweetnya Ellen May tentang consumer confidence yang bilang kalo Indonesia itu memiliki konsumen dengan tingkat kepercayaan tertinggi di dunia untuk kuartal kedua tahun ini, nah hal ini membuat saya tertarik untuk memahami konsep "Consumer Confidence" ini lebih lanjut, and again this paper is on a fuckin messed-up english haha.


Consumer Confidence



Indonesia the biggest archipelagic state in the world is recently famous for its stable high GDP growth rate, many experts believe that domestic consumption was the cause of Indonesia's economy to survive and grow in the midst of the crisis that hit the developed countries in the world. In our country, consumption accounted for more than 50% of GDP and that is why consumption has a vital role in our country’s economy.

Consumer Confidence is an economic indicator which measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy.

Consumer's Confidence is measured by the Consumer Confidence Index, which, in Indonesia, is tabulated by Bank Indonesia as the average yield between Current Economic Condition Index (CECI) and Consumer Expectation Index (CEI) in 18 big cities . CECI is an index that shows how consumers’ perceptions of economic conditions in their country at present time, how much confidence they have against the country, as measured by several factors such as household income, right time to buy durable goods and the unemployment rate. Meanwhile, the CEI is an index that measures the consumers’ average confidence about future prospects of several factors, such as : their expectation of future income, future jobs availability, and future general condition of their country.

Indonesia’s Consumer Confidence is on a rising trend, this is in line with our country’s high GDP growth and good macro-economics indicators, even according to Nielsen, Indonesia in Q2, took India’s position as the country with the most confidence consumers in the world.

            Although consumer confidence appears to be related to a number of economics variables, there may also be others factors affecting the confidence survey balances that provide important incremental information on consumers’ views. The unexplained component may reflect how consumer confidence reacts to non-economics factors. Some good example of this was happened in the USA, It’s consumer confidence index in September 2001 was dropped to 97,6 from 114,0 in the month before. The same condition happened in Indonesia when the Bomb Bali I exploded on October 2002, Indonesia’s consumer confidence also plunged from 78,5 to below 60. Although the effect of these non-economic factors is huge, the economic factors still gives a more frequent impact on the consumer confidence, the graphs above shows how economic policies and conditions affects Indonesia’s consumer confidence, the policy of increasing the tariff of electricity and fuel subsidy reduction, degrade the confidence of our country’s consumers.

            So what can we get by knowing this number? We can treat CCI as another macroeconomics indicator, since it really has a correlation with other macroeconomics data, such as inflation, unemployment rate, prices, even the GDP itself. CCI is also included as one of the most important factors of consumers spending, which the latter is an integral part for counting a country’s GDP. So, CCI can be used as a sign of the condition of a country at the present time, and the potential growth in the future. That is why some investors did use this index as a tool to choose in which country they are going to “inject” FDI.

            From the latest Nielsen Global Consumer Confidence Report (Q3), Indonesia and India together topped both the regional (Asia-Pacific) and world ranking, and with the average score of 92, and only 12 out of 58 countries surveyed shows a score over 100, it can be concluded that the average person in this world still pessimistic about their financial position, and their countries’ general economic condition in the future. In the picture below, we can see all the 58 surveyed countries, and the change in the confidence from the Q2, and also fluctuations of consumer confidence of some selected countries.

The first Graphs above tells us that Indonesia is still has the most confidence consumers in the world, and we can also see that the top tier mostly consist of Asia-Pacific countries, while European and other developed countries such as USA, Japan, and France have a below-average score. We can also concluded that consumer confidence did move in line with GDP growth, as we can see, some of the poor performing countries such as Greece, Spain, and Italy has a declining consumer confidence, while top performers such as Indonesia, has an uptrend index.
            So, by knowing this fact, how can our government reacts? There are some policies that our government can implements, or some actions that can be done, some of the possible policies are :

1.    Control the Consumption
What is meant by controlling the consumption here is either to boost even more consumption or to maintain the number of consumption in order to avoid the over-consumption. Boosting the consumption can be done in order to increase our GDP growth even more because in this recession era, countries are more relying on their domestic consumption to boost their GDP, including Indonesia, but in this country, government already had a plan to control or maintain the consumption to GDP ratio, because research suggests that too much consumption will lead to a higher inflation rate, hence reducing the real income of people. In line with this policy, Indonesia’s Government is also trying to increase the investment more as a means to boost GDP, instead of always counting on domestic consumption, because in the future, the multiplier effect of investment is far greater than consumption.

2.    Attract more FDI
What is the correlation between consumer confidence and FDI? As already told before that foreign investors did take into account the CCI number, knowing that Indonesia is one of the most confident countries, government can attract FDI, so that our country’s growth and development can be surged, in order to achieve this, government should really pay attention to infrastructure since it is usually become the main reason why investors doubtfully want to invest in our country.

All in all, consumer confidence probably is not as popular as other macroeconomics indicators such as inflation rate, GDP growth, unemployment rate etc, and it is also not an independent indicators, because its results affected by other macroeconomics factors, but the advantages of this CCI is that, CCI take into account human-psychological factors, and other non-economics factors like bombing, politics, even terrorism, making it as one of the most reliable subjectively-objective indicators, because it mixes the fact of a country’s economy with the perception of the people living in that country.


Dan yang ini baru dikumpul minggu lalu, jadi belum dinilai, ya mudah-mudahan bagus lah ya membantu nilai UTS yang under-expectation hehe

                                                                                                                                                          "Confidence is ignorance. If you're feeling cocky it's because there's something you don't know"         - Eoin Colfer, Artemis Foul -

Income Inequality Trap

Saat ini bingung mau ngapain, mau nulis tulisan-tulisan galau udah keburu lewat momennya, mau maen game ga mood, mau nonton film males, haha daripada bengong mendingan saya nyimpen hasil paper makro saya ke blog ini hehe.

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.

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 -



Human Nature #8 : Exaggeration


Hidup ini bukan hanya tentangmu, tentang kebahagiaanmu, bukan pula tentang segala macam kesedihanmu, hidup ini adalah tempat 7 milliar emosi berbeda menjadi satu, tempat yang menamparmu, menyadarkanmu bahwa dirimu itu gak lebih besar dari segumpal upil hidungmu, tapi kadang kita ngerasa layaknya menjadi seorang raja atau ratu di sebuah kerajaan yang besar, menginginkan semua “rakyat” tau tentang apa yang sedang kau alami, rasa ingin diperhatikan nyang begitu besar, yang mengaburkan pandanganmu untuk melihat bahwa sebenarnya apa yang kau alami itu belum seberapa, bila dibandingkan dengan penderitaan rakyatmu selama ini.

Jujur, sebenarnya siapa sih yang ga pernah “lebay”? apa tujuan orang membesar-besarkan apa yang ia alami? Yeah people do have problems, you have it, me too, she or he too, they got it too, and everyone else does, but why keep acting like you are the one whi have the biggest and the greatest problem in the world? “Aduh, capek nih jalan kaki!” kau ga tau aja, berapa banyak abang tukang bakso,, atau tukang sampah yang tiap harinya berjalan kaki lebih dari 20km di kota yang panas dan penuh sesak seperti jakarta ini?

Saya juga jujur, tipe yang suka membesar-besarkan masalah, hampir semua tulisan di blog ini berasal dari masalah yang dibesar-besarkan, kalo ga dibesar-besarkan ga akan saya tulis ke blog ini kan? Itulah kenapa saya menyebutnya human nature, karena hampir semua orang melakukannya, tapi yang menjadi masalah adalah ketika kau sedang berselisih dengan seseorang tentang suatu permasalahan diantara kalian berdua, dan kalian menganggap masalah yang kalian dapatkan jauh lebih besar daripada masalah teman kalian itu, sehingga kalian dengan sesuka hati menjadikan persepsi kalian tersebut sebagai persepi bersama, it just makin ur problem with your friend become worse guys.

"Exaggeration is truth that has lost its temper"
- Khalil Gibran -

Junk File #17


Really guys, this post is what triggers me to start to write again, I dont know where to start, but just an hour ago, Brama came back from his church with his high school friends, he already told me that his friend will stay in our house for a night, but what I didnt expect is that his friends that would come is really so many, it is not that I feel distracted by them, but I just feel envy you know, I dont fuckin know why in the hell I always got this kind of feeling, anytime, anywhere. Not just in this house, in the office also, in my campus, I just feel 
like I am the enviest people in this whole universe.

                I must admit, that I envy him so hard, for having a lot of close and great friends like that, the way they talks, jokes, laughs was really priceless, yeah, I know, some of you might think, “You still got plenty of family don’t you” Yeah I did, I have a family, and I love them, but it is not about family, it is about some people who you can lean on everyday, someone who will treat you just like the way you want to be treated, I know, it is my fault, to be honest I did have some great people who absolutely willing to listen to all my fuckin un-important stories, but I freakin dont know why God, why you always give me this kind of feeling, are You trying to make me realize my past mistakes?

                Pathetic isnt it?, and un-important as well right? Haha did I look like a crybaby by writing this kind of post? Nah, nevermind, I know I am still just a boy, I just cant do what I want to do, and keep  blaming the “system” yeah, searching for justification or even a scapegoat for my inabilities, and for those who read it, please dont suddenly change the way you talk or interact with me, that will just make me think that you help me out of pity, and that is one of the reasons why I tried to conceal this blog, just read it and pretend that it had never been written, ok guys? Thanks :)

"I know very little, least of all the people closest to me"
- Cal Lightman - Lie to Me Season 2 -

Revelation


Labil banget ga sih  kesannya, ketika saya udah bilang mw conceal ini blog, tapi tiba-tiba di “reveal” lagi? Haha, jujur aja saya sebenarnya pengen banget cerita, apa aja yang saya alami dari hal-hal yang menyenangkan sampai yang ngeselin sekalipun, tapi lagi-lagi saya bingung mw cerita ke siapa, haha akhirnya malah curhat di Twitter n Facebook, haha jadi saya memutuskan untuk aktif lagi menulis di blog ini, karena mungkin ini ya satu-satunya media media tempat dimana saya bisa berbagi hal-hal yang saya segan untuk bagikan secara lisan haha, just dont criticize what I write, dont take my writings too seriously, I am just write what I wanted to write, and please do not judge an author by its writings haha