Fight against Inequality

Will vote for someone who fights for trimming down huge economic disparity and inequality, the gap between the haves and the poor....which increased significantly in the past ten years, in contrast to the mandate of reform movement. We brought down Soeharto because, among others, of huge inequality in the society. What've been done? We've seen the rich getting richer, the poor poorer. Someone shall come up with serious measures to narrow down the gap.

In 1998-1999, Indonesian people spent Rp770 trillion to bailout thousands of companies, including major business groups like Salim, Sinarmas, Barito, Bakrie, Nursalim, Texmaco, Rajawali, RGM, etc. The State, all of us, still bear the cost of the bailout until now, and another 10 years or so due to the banking recapitalization. What's happened to these groups post Soeharto-Habibie's massive bailout?

Bumi Resources, one of Bakrie-controlled company, reported net profit of Rp19 trillion in the period of 2004-2008. SMART, one of Sinarmas subsidiaries, reported Rp2.97 trillion of net profit in the period of 2005-2008. Indofood, one of Salim's subsidiaries, reported net profit of Rp3.18 trillion in 2004-2008. BCA, currently controlled by Djarum Group and Farallon, booked net profit of Rp19 trillion in 2005-2008 alone. The State bailed out BCA with Rp56 trillion of recapitalization bonds, where each year the taxpayers shall pay its interest of at least Rp6 trillion. 

Indonesia's major groups control more and more concessions. Most of them control over 200,000 Ha of plantations. They also controls over 50,000 Ha of coal concessions on average. 

So, when government and its economists claimed 5% economic growth, the big question: who's grown, who's left behind? Economic growth is aggregate growth of 237 million people. The super rich (0.01% of population) controls over 70% of the growth. According to central bank data, only 25,316 accounts with over Rp5 billion in Indonesian banking system which accounted to 35% of total funds, while those with over Rp100 million (1.7 million accounts) control about 43% funds. Do the math! A 5% aggregate growth, for example, could be reached with 15% growth in the super rich (25,300 accounts) while the other groups 0% or a 20% growth in the super rich while others declined. So, don't be fooled by aggregate growth measures!

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