12 Reasons Why is Indonesia Mixed Economy
A mixed economic system is a regulation of economic life that is managed jointly by the private and government. Mixed economic system is an economic system that combines the capitalist economic system and capitalist economic system.
Indonesia can not be separated from the liberal economic system, because the economy of this country is still dependent on the United States. However, the liberal economic system can not be 100 percent applied, because as a developing country government intervention is still needed. Here are more reason why is Indonesia mixed economy.
- Indonesia is developing country
Over the past 10 years, the Indonesian economy has doubled and has now reached 932 billion US dollars. But compared to its neighbors, Indonesia is still lagging behind in infrastructure development. However, 18 million people are still living in poverty. Therefore, with the status of developing countries, Indonesia tried to implement a mixed economy in order to keep control of people’s economy, but still give freedom to the people to compete
- Giving a chance for everyone to compete
In a mixed economic system, the government acts as an arbitrator and economic overseer. In this case, the government still provides an opportunity for the people to compete in the economic field. However, the government will continue to play a role in cost and market prices. This is done so that there is no monopoly and trade gap. The government also has the right to solve the problems in the people’s economy.
- Why Indonesia is Good for Investment
- Economic Effects of Tourism in Bali
- Economic Benefits of Transmigration in Indonesia
- Indonesia is not 100% industrialized country
Industrialized country usually Indonesia plans to be the industrialized country. However, the realization is not as easy as the planning. In fact, there are still many problems on the way to get there. Basically, Indonesia was an agricultural country since we have a good climate to support it. So, some people of certain group couldn’t be ready to make a change for Indonesia. Moreover, most of industrialized countries in the world apply liberal economy for Therefore, it couldn’t be said that Indonesia is 100% industrialized country.
- Varying natural conditions in Indonesia
Indonesia is a country with natural conditions that vary from west to east. In one area you will probably find such a vast land, elsewhere in Indonesia you will find mountains with a swift stream. In other places you will also find a part of Indonesia with very uncertain weather. For this reason a mixed economic system is applied in Indonesia. It is because the climate and natural conditions of an area also determine the type of people’s work.
- Archipelago country
Indonesia is an archipelagic country. There are at least 17 thousand islands in Indonesia although some of them are uninhabited. With this archipelagic country, it will be increasingly difficult to uniform the people’s economy. Thus, a mixed economic system is used in Indonesia so that the government can help to overcome the economic disparities that exist in Indonesia.
As we know, the Indonesian economy for 60 years of independence has always been centered on Java and Bali. In fact, many other islands that have the potential to become the best source of Indonesia’s economy.
- Democratic country
Indonesia is a democracy with freedom of opinion from the people. Therefore, it is not appropriate to apply the social economic system. Meanwhile, Indonesia is also not ready to implement the liberal economy. As a middle ground, Indonesia implements a mixed economic system in order to keep control of the people’s economy.
- Having various of natural resource
Indonesia is a country with enormous natural wealth. It stores many sources of minerals, energy, plantations, forest products and abundant marine products.
Currently Indonesia ranks 6th in terms of gold reserves, number 5 in copper production, ranks 5th in bauxite production, the world’s largest tin producer after China, the world’s second largest nickel producer. The Grasberg mine of Papua is the largest mine in the world. In conclusion, the country is at the top in terms of raw materials. For that reason, Indonesia also implemented a mixed economy.
- Multicultural country
Indonesia is a multicultural country. This can be seen from Indonesia’s diverse sociocultural and geographic conditions. Indonesia which consists of a number of ethnic, cultural, and religious make it a plural and heterogeneous country. The plurality and heterogeneity reflected in the Indonesian nation is tied up with a motto of harmony in diversity. The work and profession that is done by the people of Indonesia also vary.
- Not fit with both liberal and social economy
Indonesia can’t use the socialist economic system because Indonesia is a democracy. Indonesia must continue to allow the people the right to create, run, and compete in the economic field. However, the government is also not ready if it has to implement a liberal economic system in which the government is already out of hand on the people’s economy.
The government should continue to help the existing economic problems of the people such as unemployment, minimum wage setting, trade monopoly, and so on.
- High Inflation
In a simple sense, inflation is a period when prices rise in general or the decline in the value of money. Meanwhile, deflation is the opposite condition. In Indonesia, the Central Bureau of Statistics (BPS) is responsible for conducting surveys and inflation calculations announced every month to the public. Therefore, with the implementation of a mixed economic system, governments have the power to regulate markets and crack down on the practice of abusing monopoly power, such as preventing excessive price increases.
- The high rate of unemployment
The high unemployment rate in Indonesia is also the factor causing Indonesia to adopt a mixed economic system. Unemployment is a classic problem of a country and can not be left alone. So far the government has prepared many things to solve the problem of unemployment in Indonesia including opening vacancies as much as possible.
- The unstable of economy condition
Economic growth in various sectors is deemed not to have a systemic impact on improving the quality of life of the community as a whole. This causes the economic stability in Indonesia has not improved.
Therefore, the government still enforces a mixed economy to continue to improve the economy in Indonesia. The government seeks to increase foreign investment, facilitate investment bureaucracy, and simplify public credit for the impact of economic progress can be felt by all elements of society.
All in all, the solution for Indonesia is using mixed economic system. It is considered more suitable for countries with high level of poverty. The role of the government in overseeing the development of the economy that runs in this country is also very necessary for the creation of welfare in public life.