Commentary: The poor, the unemployed and the inflated promises

Vincent Lingga , THE JAKARTA POST , JAKARTA | Fri, 06/26/2009 1:05 PM | Headlines

The second round of presidential debates Thursday evening presented a slightly livelier exchange of views, especially between Jusuf Kalla and incumbent president Susilo Bambang Yudhoyono, concerning what they would do to alleviate poverty and unemployment.

While Megawati Soekarnoputri continued to spout ideological rhetoric but didn't say anything substantial about job creation and poverty reduction, both Kalla and Yudhoyono demonstrated their mastery of the problems, succinctly articulating the connection between investment, economic growth, employment, purchasing power.

Like in the first round of debates, Megawati in her opening statement of vision and mission, haphazardly rambled from one subject to another, citing the importance of the traditional mutual-assistance spirit (gotong royong), then jumping to the problem of water, food imports, food sovereignty and the need for farmers to keep informed about weather forecasts.

Though her campaign slogans centered on what she called people-based economy, she didn't present any concrete policy measures on how she would cope with the problems of poverty and unemployment, failing miserably to show the vital role of economic expansion to create jobs and generate purchasing power.

Megawati failed to answer directly the moderator's questions about income, inflation, fuel subsidies.

She repeatedly asserted the vital role of mutual-assistance spirit in attacking poverty and unemployment but failed to explain how.

But both Yudhoyono and Kalla candidly enlightened the public on how poverty would never be reduced without fairly high economic growth, emphasizing the crucial importance of stimulating private investment through a better business climate.

As the incumbent president, Yudhoyono enjoyed the advantage of being able to articulate what his government has been doing and his achievements over the last five years.

Encouraging also was that both Yudhoyono and Kalla realized the need for multi-pronged policies in addressing poverty and unemployment, combining pro-growth policies with government intervention through populist programs specifically targeted at the impoverished people.

Economist Aviliani, who moderated the debates, deserved credit for her probing questions to each of the candidates, prodding them to debate each other's views.

According to the school of thoughts of Yudhoyono and Kalla, the fundamental goals of poverty and unemployment reduction strategy are to increase the opportunities available to poor families, reduce their vulnerability to economic shocks and empower them to address their own specific problems.

"We should not only provide them with fish, fishing hook and canoe but we should also produce fishing rods and canoes," Kalla said in emphasizing the importance of national economic resilience and minimizing dependence on imports.

According to Kalla, economic growth should reach at least 8 percent a year to reduce the poverty rate (currently 15.4 percent) by 150 basis points (1.5 percentage points) a year.

The three candidates, however, failed to present a clearly firm stance on whether they would be willing to raise fuel prices according to international price levels.

Nor did they reply explicitly to the moderator's questions about whether they would ask for foreign debt reduction or restructuring.

"I will increase tax receipts, improve austerity and efficiency to plug the budget deficit. But I will not sell or privatize state companies," Yudhoyono said, apparently in teasing Megawati who sold several state firms during her 2001-2004 presidency.

The three candidates shared the same view about the need to revise the 2003 labor law to make it more flexible in order to encourage new investment but none of them elaborated how they would achieve the badly-needed amendments.

"We also need to make our fiscal incentives for investment comparable to those offered by other ASEAN countries," Kalla pointed out.

So all in all, don't expect any policy breakthroughs, whoever of the three candidates eventually win the July 8 presidential election.

The basic policies will remain the mixture of market-based economic management to spur growth and government intervention through well-targeted programs for the impoverished people.