The Economy System in Soekarno Era
Soekarno implemented the command economy system as applied especially in the communist countries. In the 1960s the Indonesian economy quickly deteriorated
due to debt and inflation, while exports weakened. Foreign exchange earned from the country’s plantation sector fell from USD $442 million in 1958 to USD
$330 million in 1966. Inflation peaked above 100 percent (year-on-year) in the
years 1962-1965 as the government simply printed money to fund its debt and
grand projects (such as the construction of Monas). Indonesians’ per capita
incomes declined significantly (particularly in the years 1962-1963).
Meanwhile, much-needed foreign aid stopped flowing to the country after Sukarno
refused to accept aid from the USA and pulled Indonesia out of the United
Nations (UN) due to Malaysia’s admission to the UN (Indonesia opposed the
creation of Malaysia in 1963). Instead he fostered closer relations with China
and North Korea. The Sukarno administration released an Eight-Year Plan in
1960 in a move to make the country self-sufficient in food (especially rice),
clothing and basic necessities within a three year period. The next five years
would become a period of self-sustained growth. However, the masterplan was
abandoned in 1964 as the economy deteriorated and targets could not be
achieved. In fact, the economy went into a downward spiral due to
hyperinflation, an eroding tax base, as well as a flight from financial assets
to real assets. The costly ‘confrontation’ politics against Malaysia also
absorbed a significant portion of government expenditures.
The Best Economy System for Indonesia
My
opinion about the best economy system for Indonesia in the period is mix economy system or pancasila economy system,
can be said to be the year the growth of the economic system is good because it
has a lot of manpower and increase infrastructure is quite good. The economic
system of Indonesia will always increase depending on how the Government
accumulate a wide range of indicators. Such as encouraging private investment,
infrastructure development and investment alone is estimate to contribute as
much as 35% towards GDP growth economics 2017. In addition, look at the
situation against the soaring world crude oil prices will boost the income of
the State in the oil and gas sector. Economic
growth in the year 2018 is estimate to rise reach 5.3% according to the
International Monetary Fund (IMF). The fact that the case that economic
improvement in Indonesia has reaching 5.1% this year. The external factor is
becoming one of the main growth impetus is currently primarily through the
increase in commodity prices. In addition, there are increasing exports and
investment are expect to be able to strengthen its competitiveness.
