ECONOMIC SYSTEM

1.  Understanding Economic System

Some expert opinions related to the economic system, among others:

a.    Chester A Bemand said that: "The economic system is an integrated entity that is kolestik in which there are the parts and each part is it has the characteristics and limits tersendir"

b.    Dumatry (1996) says that: "The economic system is a system that regulates and economic relations between people with a set of institutional endurance".

c.    Gregory Grossman and M. Manu says that: "The economic system is a set of components or elements comprising the units and the economic agents, as well as economic institutions are not only interrelated and interact but also to some extent mutually supporting and influence. "

d.    According to M. Hatta: "The economic system is good to be applied in Indonesia should be based on the principle of kinship".

2.  The elements in the Economic System

a.    Economic units such as households, firms, trade unions, government agencies and other institutions related to economic activity.

b.    Economic actors such as consumers, producers, workers, invstor and related officials.

c.    Environment Natural Resources (SDA) and Human Resources (HR), Capital Resources (SDK), Resource Technology (SDT).

d.     

3.  Function Element Economic System

The functions to be performed during the economic activities, such as:

a.    production functions,

b.    consumption, distribution,

c.    investment,

d.    regulation

Results of economic activity depends on how the economic system elements that perform its functions.

4.  Purposes Economic System

Objective economic system of a country generally includes four main tasksa:

a.    Determine what, how much and how the products and services needed to be generated.

b.    Allocate the gross national product (GNP) for household consumption, public consumption, capital stock replacement, investment.

c.    Distribute national income (PN), among the members of society: as wages / salaries, corporate profits, interest and rents.

d.    Maintaining and meningkatkann economic relations with foreign countries.

5.  Characteristics of the Indonesian Economy

Indonesia as a country keupulauan (archipelago) has special characteristics, which is different from the neighboring ASEAN countries, even different countries of the world so laindi economy has its own characteristics.
Characteristics that affect the Indonesian economy :

a.  Geography

-      Indonesia is the largest archipelago in the world, consisting of 13,677 islands large - small (6,044 islands has a new name, including 990 inhabited islands); stretching from 60LU until 110LS along 61 146 km., Has the economic potential varies due to differences natural resources, human resources, soil fertility, rainfall (Sutjipto, 1975).

-      Indonesia covering an area of ​​5,193,250 km2 area, 70 percent (± 3,635,000 km2) consists of the oceans (be a maritime nation) is strategically located because: it has a cross position (between the Asian continent and the continent of Australia), a world traffic lane (between the Atlantic Ocean and the Sea Pacific) and into the lungs of the world (the largest tropical forest).

-      Dealing with communication difficulties dann transportation between islands (regions) for the transport of goods and passengers; flow of goods is not smooth; sharp difference in the price of goods; differences in educational opportunities and opportunities (field) work; struggle is a potential gap.

b.  Demographic Factors

-      Indonesian state number 4 in the world because of more than 310 million people. Uneven distribution of the population (two-thirds live in Java), most of whom live in rural areas (agriculture), melting-eyed as small farmers and peasants burah with very low wages.

-      HR Quality Low: ± 80% SD educated workforce. Low productivity due to the low living standards: the average consumption of the Indonesian population RP 82 226 per month (1993), but 82% of the population earn below the RP 60,000 per month per capita (Sjahrir, 1996).

-      Indonesia, which has a population of over 210 million people in need of various goods, services and facilities are large in size life (food, clothing, housing, etc.). But on the other hand our ability to produce (productivity) is low. This will create the conditions for the emergence of poverty-prone.

-      Social, cultural and political

Social: Indonesian nation made up of many tribes (heterogin) with beraagam culture, customs, values, religions and different beliefs. Because of differences in background, knowledge and skills are not the same, then the vision, perception, interpretation and response (actions) they are the same issues can be different, which often lead to social conflict (SARA).

-      Culture: The Indonesian people have a lot of local culture, but in fact we do not have a national culture (except Indonesian). But as one of the nation's "East" (an independent nation and build the economy since the end of World War II), the majority of Indonesian people are still unaffected (embrace) "culture" East, cultural orientation status. Cultural orientation status is characterized by: the spirit of pursuing hidupunya rank, position, status (with social symbols); weak work ethic; happy to relax; levels low discipline, lack of respect for the time (hours rubber). His opponent "culture" western cultural achievement orientation with the opposite characteristics

-      Political: Dutch colonialists came before, the Indonesian people living under the rule of kings. Hundreds of Indonesian people living under the influence of feudalism and colonialism. The main characteristic of feudalism, among others, is the cult of the individual (king always honored). The main characteristic of colonialism, among others, are authoritarian (like a master to slave).

-      The remains of the influence of feudalism (cult of personality) and the influence of colonialism (otiriter) until now has not been washed away. This is especially felt in the arena and the political upheaval in Indonesia. Behavior that is less democratic than the political elite and the less respect the human rights behavior of the authorities, the political hamper the democratization process in Indonesia. This in turn inhibits the creation of economic democracy.

-      From the description of the influence of the above factors can disimulkan that the Indonesian economy contains three potential vulnerability.

-      Three potential vulnerability that became characteristic of the Indonesian economy is:

-      Potential rawann disparities, particularly disparities between regions (islands). This is mainly as a result of the influence of geography.

-      Potential vulnerable to poverty, especially rural poverty in the blood. This is mainly as a result of the influence of demographic factors and cultural factors.

-      Potential prone to rupture, especially inter-ethnic divisions, sectarian (elite) politics. This is mainly as a result of the influence of socio-political factors