My Opinion About Economy System

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.