The period of the old order and the new order reform

The period of the old order and the new order reform

A. Planning History of Indonesia

1. Old Order

In the Old Order era, the reign of President Sukarno between the years 1959-1967, the construction proposed by the Assembly (MPRS) which define at least three provisions that form the basis of national planning:

TAP MPRS No.I/MPRS/1960 Political Manifesto of the Republic of Indonesia as outlined by the State Policy

TAP MPRS No.II/MPRS/1960 on Pattern Outlines National Development Plan 1961-1969,

MPRS No.IV/MPRS/1963 on Guideline-Guideline Implementation Outline of State Policy and Platform Development.

On the basis of these planning opportunities in the conduct of Indonesia's development that begins with a new chapter in Indonesia creates a more Conducive climate, peaceful, and prosperous. Mengrehablitasi and reconstruct the process mandated by the MPRS in this precedence in making changes to encourage the development of national economy that has been wracked by poverty and loss after the Dutch colonization.

In 1947 Indonesia's development planning begins with the birth of the "Committee for Economic Strategy Thinkers". 1947 planning is still a priority given the urgency of the economy that existed at that time (although it does not ignore at all noneconomic issues in particular socio-economic issues, labor issues, the Dutch East Indies assets, infrastructure and others related to social welfare) . Without such plans was the primary goal to "transform the colonial economy to the national economy" will not by itself be realized. Especially if it is not reinforced by an Act to standard at the time.

Around 1960 to 1965 began the process of development planning tersndat been delayed by the political conditions are very unstable has led to insufficient attention is given to development efforts to improve the livelihoods of our people.

During Indonesia's economy is at its most bleak. Rice supplies running low and the government does not have the ability to import rice and other basic needs. Soaring prices of goods, which is reflected in the inflation rate samapai 650 percent in 1966. plitik state erratic and fluctuating continuously so that the process of development of Indonesia again ignored until finally appeared G-30-S/PKI rebel movement, and a loss of power with the fall of President Sukarno.

New 2.Orde

The events, commonly called September 30 Movement / Indonesian Communist Party (G30S/PKI) marks the change order from the Old to the New Order. On March 1, 1966 President Sukarno required to sign a letter to General Suharto ordered to take all measures necessary to protect the safety of the state and Sukarno as President. The letter which was then known as the Order of March (Supersemar) was defined as the media giving full authority to Suharto.

During the New Order government also emphasizes political stability in the program and to achieve national stability first started with the so-called national consensus.

In the New Order era, the Soeharto government asserts that kerdaulatan in politics, self-sufficient in the field of personality in the field of economic and socio-cultural. This determination can not be realized without restructuring efforts in the field of politics (upholding sovereignty, erase feudalism, maintaining the territorial integrity of Indonesia and conduct free and active politics), economic restructuring (eliminating economic inequality legacy of colonial economic system, avoiding neo-capitalism and neocolonialism in his form of sophisticated, establishing independent economic systems without denying global interdependence) and the restructuring of the socio-cultural (nation and character building, based on unity in diversity and to eliminate cultural and Pancasila inlander).

At this time also the national development process continues to work on in order to increase the capacity of communities and create jobs. Income per capita is also meningkata compared to the old order.

All of this is achieved in a national blueprint or plan of national development. That is why in the days of the old order we have development plans of five years (The Council) and then have also National Development Plan Eight-Year (Bappenas). In the New Order era we have the Five-Year Development Plan (Repelita) I, Repelita II, Repelita III, IV Repelita, Repelita V, and VII Repelita (Bappenas).

The main causes of the fall of the New Order is the monetary crisis in 1997. Since 1997, the Indonesian economy continues to deteriorate as the financial crisis that hit Asia. The situation continued to deteriorate. Corruption is rampant, while the poverty of the people continues to rise. The occurrence of striking social inequalities led to the rise of social unrest. Appears driven demonstrations by students. The main demands of the protesters are economic improvement and reform. Massive demonstrations conducted in Jakarta on May 12, 1998. At the time it happened Trisakti incident, namely the death of four students at Trisakti University. The four students who died were then given the title as the "Hero of Reform".

In response to the action of these reforms, President Soeharto promised to mereshuffle VII Development Cabinet to Cabinet Reform. It will also form the Reform Committee in charge of completing the election law, Act party, Law Susduk MPR, DPR, and the Parliament, the Antimonopoly Act, and the Anti-Corruption Act. In its development, can not be formed Reform Committee as 14 ministers refused to participate in the Reform Cabinet. Rejection caused President Suharto to resign.

3. Reformation

After the shocks in this country and a variety of popular pressure on the president Suharto, finally, on May 21, 1998 President Suharto resigned as president and handed RI office to the vice president of BJ Habibie. This event marked the end of the New Order and the Order of the commencement of the Reformation.

To fix the economy slumped, especially in the banking sector, the government established the National Banking Restructuring Agency (IBRA). Furthermore, the government issued Law no. 5 Year 1999 concerning Prohibition of Monopolistic Practices and Unfair Competition, and the Law. 8 of 1999 on Consumer Protection.

Additionally during this period also gives the freedom of expression, participation began to rise again. This is evident from the emergence of political parties from various groups and ideologies. Society can communicate openly criticized the government. In addition to freedom of expression, freedom is also given to the press. Reforms in the press is done by simplifying the application for issuance of Business License (Business License).

With the presence of development reform can be controlled directly by the people, and policies based pembangunanpun bebunyi democracy of, by and for the people, so with this basic unfettered participation of the people as in the new order, the life of the Indonesian economy is driven by a set course.

In addition to national pemabangunan this period also emphasized the right of the area and its people in determining their respective regions, so it is preferred regional development as set out in Law No. 32/2004, Law 33/2004, Law 18/2001 for Acehnese government, Law 21/2001 for Papua. Fourth legislation reflects the seriousness of the center of the delegate authority to the government and people in the region in order to determine appropriate development ratyatnya want.

B. Economic Policy in Development

1. Old Order

The reign of Sukarno's policy of economic development is still very unstable, which is plagued by various problems including pergejolakankan unfavorable political and governance system that has not been good, so the impact on the policy-making process.

a. Post-Independence Period (1945-1950)

Financial state of the economy in the early days of independence very badly, among others, caused by:

Inflation is very high, due to the release of more than one currency uncontrollably. At that time, the Indonesian government temporarily declared three currencies in force in the territory of the Republic of Indonesia, the currency De Javasche Bank, the Dutch East Indies government currency, and the currency of the Japanese occupation.

The existence of economic blockade by the Netherlands since November 1945 to close the doors of foreign trade RI.

Empty state coffers.

Exploitation during the colonial period.

Attempts were made to overcome the economic difficulties, among others:

National Loan Program implemented by the finance minister Ir. Surachman with the approval of BP-KNIP, conducted in July 1946.

Attempt to break the blockade with the diplomacy of rice to India, mangadakan contact with private U.S. companies, and blockade the Dutch in Sumatra, with the aim to Singapore and Malaysia.

Establishment of Planning Board (Board Designer of Economics) January 19, 1947

Reconstruction and Rationalization of the Armed Forces (Rera), 1948, transferred the former armed forces personnel into productive fields.

Kasimo Plan which essentially about self-sufficiency efforts with some practical guidelines. With self-sufficiency, it is expected the economy will improve (follow Fisiokrat School: agriculture is the source of wealth).

b. Future of Liberal Democracy (1950-1957)

This period is called the period of liberal, because of the political and economic system using the principles of liberal. Submitted to the appropriate market economy theories of the classical school of laissez faire laissez passer states. Efforts were made to address the economic issues, among others:

Syarifuddin scissors, which cuts the value of money (sanering) March 20, 1950, to reduce the money supply so that the price level down.

Nationalization De Javasche Bank to Bank Indonesia on December 15, 1951 by Law no.24 th 1951 as a function of the central bank and the bank circulation.

Unilateral cancellation of the results of the Round Table, including the dissolution of the Netherlands-Indonesian Union. As a result, many Dutch entrepreneur who sold his company while indigenous entrepreneurs have not been able to take over these companies.

c. Guided Democracy (1959-1967)

As a result of the July 5, 1959 presidential decree, Indonesia will run a system of guided democracy and economic structures Indonesia leads etatisme system (everything is set by the government). With this system, is expected to bring in prosperity and equality in social, political, and economic. However, the economic policies taken by the government at this time has not been able to improve the economic conditions of Indonesia, among others:

Devaluation posted on August 25, 1959 lowers the value of money as follows: Money bill Rp 500 to Rp 50, Rp bill 1000 to Rp 100, and all bank deposits exceeding 25,000 frozen.

The establishment of the Economic Declaration (Dekon) to reach the stage of socialist economy guided by Indonesia. In practice it resulted in stagnation for the Indonesian economy. Even at 1961-1962 prices of baranga up 400%.

Devaluation is made on December 13, 1965 to make the money worth Rp 1,000 to Rp 1.Tindakan government to suppress the inflation rate is actually increasing the rate of inflation.

Failures in various monetary measures were compounded because the government did not save expenditure-expenditure. At this time many lighthouse projects of the government and also as a result of political confrontation with Malaysia and Western countries.

2. New Order

During the New Order, the government carried out a policy has not changed so significantly over the past 32 years. Because at that time the government brings a successful political stablilitas thereby supporting the economic stability. Because of that, the government rarely make changes to the policy, especially in terms of the state budget.

In the New Order government, policy-oriented economic growth. Economic policy is supported by political stability which is run by the government. It is poured into the jargon of economic policy called the Trilogy Development, namely political stability, stable economic growth and equitable development.

This worked because for more than 30 years, the government had the political stability that support economic stability. Economic policies of the time set forth in the Plan Budget of Revenue and Expenditure (Budget), and ultimately always approved by the House of Representatives (DPR) for approval to the State Budget.

Budget at the New Order government, is based on the calculation of basic assumptions. Ie the rate of economic growth, inflation, the price of Indonesian crude oil exports, as well as the rupiah against the U.S. dollar. Basic assumptions are used as a measure of national economic fundamentals. When in fact, the fundamentals of the national economy is not based on the calculation of the macro stuff. However, more towards the micro-economic nature. For example, problems in the business world, a high level of risk, to the application of the private sector and the state is good and clean. Therefore, the government has always faced criticism stating that the determination of budget assumptions are not realistic given the circumstances.

The format of the state budget in the New Order differentiated in revenues and expenditures. Revenue consists of regular revenues and development revenues and expenses consist of expenditures and development expenditures. Circulation budget begins on 1 April and ends on March 31 next year. Called fiscal policy is implemented seseuai with farmers harvest, so that the impression that the national economic policy attention farmers.

Budget at the time the policy was put in place on the basis of the principle of balance, the adjusted revenue budget expenditures so that there are an equal number of receipts and expenditures. It is in fact the balance is very unlikely, because at that time foreign loans always flowing. Foreign loans were used to cover the government's budget deficit.

This means that foreign loans are placed on the budget admission. And should the loans are debts that must be returned, and an expenditure burden in the future. Implementation of the policy is causing a lot of criticism, due to the state budget deficit was closed by foreign loans. In fact, the concept of truth is the government expenditure can be covered by tax revenue in the country. So between revenues and expenditures can be balanced. The problem is, at that time when tax revenues minimal so as not to close the budget deficit.

3. Reformation

In times of economic crisis, marked by the collapse of the New Order administration was followed by an era of reforms initiated by the government of President Habibie. At this time it is not only constitutional change, but also economic policy. So what has been steady run for 32 years, was forced to undergo changes in order to adjust to the situation.

Government BJ.Habibie president who initiated the reform period has not maneuvering sharp enough in the economy. Preferred policies to control political stability. During the leadership of President Abdurrahman Wahid was, there was no significant action to save the country from chaos. In fact, there are many economic problems inherited the new order should be dealt with, among other issues KKN (corruption, collusion and nepotism), economic recovery, the performance of SOEs, control inflation and maintain the rupiah. In fact, the president Bruneigate scandal that toppled his credibility in the eyes of the public. As a result, his position was replaced by Megawati.

The leadership of Megawati experiencing urgent problems to be solved is the economic recovery and enforcement. The policies adopted to address the economic problems, among others:

Asking delay debt repayments of U.S. $ 5.8 billion to the Paris Club meeting-3 and allocate external debt amounted to Rp 116.3 trillion.

Privatization policy. Privatization is selling state enterprises in the period of crisis in order to protect a state from intervening political forces and reduce the burden on the state. Proceeds successfully raised Indonesia's economic growth to 4.1%. However, the policy has sparked a lot of controversy, because the privatized SOEs sold to foreign companies.

In this period also realized the establishment of the KPK (Corruption Eradication Commission), but there is no concrete breakthrough in the fight against corruption. Though the existence of corruption makes many investors think twice about investing in Indonesia, and disrupt national development.

Future Leadership Susilo Bambang Yudhoyono are controversial policies that reduce fuel subsidies, or in other words to increase fuel prices. This policy background by rising world oil prices. Budget subsidies diverted to subsidize education and health sectors, as well as areas that support the improvement of public welfare.

The first controversial policy raises two controversial policies, which direct cash assistance (BLT) for the poor. Most BLT is not up to the right hand, and division caused various problems sosial.Kebijakan taken to increase per capita income is relying on bulk infrastructure development to stimulate economic growth and to invite foreign investors with the promise of improving the investment climate. One is holding Indonesian Infrastructure Summit in November 2006, which brought together investors with regional heads.

In mid-October 2006, Indonesia pay off the remaining debt to the IMF amounted to 3.2 billion U.S. dollars. With this, it is expected that Indonesia no longer follow the agendas of the IMF in determining domestic policies. However, owes more to the discourse on overseas again emerged, after the release of a report that the economic gap between the rich and the poor sharpened, and the number of poor people increased from 35.10 soul in February 2005 to 39.05 million in March 2006.

This is caused by several things, among others, for lending banks to the real sector is still lacking (banks prefer to deposit funds in SBI), so the performance of the real sector and the lack of impact on the decline in investment. In addition, the government bureaucracy is too thick, causing small state expenditures and absorption, due to budget management inefficiencies. So, on the one hand the government is attempting to invite investors from abroad, but on the other hand, domestic conditions are not conducive.

At the time of the Reformation is the national development process had been democratic and has played in carrying out local government functions pasipartisi people of the region. With opportunities sumbangsi autonomy has given greatly to the acceleration of national development and also guarantee a populist democracy.

C. Government System

1. Order time

government policy, oriented politics, all the projects submitted to the government, centralized, guided democracy, secularism.

2. New Order

Policy is the government, but the economy has been submitted to private / foreign, focusing on economic development, centralized, Pancasila democracy, capitalism.

Suharto and the New Order can not be separated. Because, Soeharto's New Order and the birth of the New Order power system that sustains the Soeharto government for more than three decades. Is it true that New Order has ended? We still see the practices of the New Order value today is still a character and nature of politics in this country. We are witnessing corruption is still entrenched in the country. Differences New Order and Reform Order culturally and substance increasingly blurred. Why is all this happening? One answer, this nation has never made a clear demarcation of the New Order.

Early milestone reforms 11 years ago that is expected to draw a line of demarcation old forces of a corrupt and authoritarian with new powers who want to change it "shackled" by the authoritarian political kekuasaan.Sistem factor (minimal public participation) in the new order are controlling instruments such as restrictions on the movement of the press, pewadahunggalan professional organizations, restrictions on affiliated party, military power to enter civilian areas, etc..

3. Reformation

Government has no policy (according to the flow of political parties in the House), weak governance, and emerging regional autonomy too far, Liberal democracy (neoliberaliseme), it is unclear what his orientation and willing to carry this nation.