What’s Stopping Indonesia?

It’s been a long time since I write on my blog, and unfortunately, I won’t be writing about anything fun or easy to read. This time I’m going to write about Indonesia’s economic stagnation. First of all, in terms of stagnation, I think it’s best to say that it means “slow growth” instead of “stop growing” or “pausing” or anything of the sort. You get the picture? Well I hope you do 🙂

What struck me to do this post is Joko Anwar’s tweet today about Indonesia. Coincidentally, I was doing my Globalization and Strategy’s assignment on capital and authority, and I thought I had the answer for that. Thanks to Francis Fukuyama’s article on this matter, it really inspired me 🙂

Given the abundance of natural resources of Indonesia, it’s hard to believe that the country is still lacking on economic power. For example, compared to Japan, Indonesia’ industrial structure are far more abundant, yet it’s far behind Japan in terms of economic power. I will write few paragraphs of Fukuyama’s writing on this, and I will review it afterwards.

The difference in industrial structure have to do with what the sociologist James Coleman labeled social capital, which is the component of human capital that allows members of a given society to trust one another and cooperate in the formation of new groups and association (Fukuyama, 1995:90).

A number of forms of social capital enable people to trust one another and build economic organizations. The most obvious and natural one is the family, with the consequence that the vast majority of businesses, historically and at present, are family businesses (Fukuyama, 1995:91)

The most important form of sociability from an economic standpoint is the ability of strangers (that is, non-kin) to trust one another and work together in new and flexible forms of organization. This type of spontaneous sociability is frequently weakened by cultures that emphasize family relationships to the exclusion of all others. In many cultures, there is something of a tradeoff between the strength of family ties and the strength of kinship bonds. Moreover, if familism is not accompanied by the strong emphasis on education and work in Confucian or Jewish cultures, for example, then it can lead to a stifling morass of nepotism and inbred stagnation (Fukuyama, 1995:91).

I think it’s pretty clear from Fukuyama’s view on social capital, trust, and its discourse onto nepotism. In my opinion, this is what’s stopping Indonesia from developing its economic power: there is no good education and work ethics. Sure, Indonesia had many intelligent students, but they don’t have that ‘it’ factor where they can be beneficial to their country. Most of them were ignored by their own country, and what happens next? They go to another country where they are insured of having a prosperous life. Okay, I think it’s overrated, but it’s the bitter truth.

Aside from the amount of intelligent people, the education system in Indonesia itself is flawed. Let’s just say that the Ministry had too much to ask for the students with the increase of minimal grades to graduate. I’ve been in there, and I know how stressful it was to bet your three years of high school on three days of national examination. One day, there was one student, a mathematical genius who won the Olympics of something of the sort, and he/she flunked the examinations. Hard to believe, but it’s true. The stress level can also lead to illegal ways to pass the exam, such as buying the answers or cheating. Anything, as long as it ensures them to graduate. The habit of doing whatever it takes to reach their goals also leads to laziness in college or in work, which I think it’s pretty clear that it’s the case when there’s always the easy way.

What Indonesia need right now is investing on good education and work ethics. It’s as simple as that! I think the first step of doing it is deregulating the educational system. With a good system, comes a good product, and vice versa. Increasing the education quality by raising the standards is incorrect. I myself don’t have any suggestion whatsoever for a good educational system, but I’ve been there in that position where I bet on my high school years, I’ve done that, and I know that something’s wrong with the system. To educate means to teach someone, and hopefully, it’s a good lesson for your everyday life. When it’s not a good lesson, what’s the point of having any education system at all?

Source: Fukuyama, F., 1995. Social Capital and the Global Economy. Foreign Affairs, 74(5), pp.89-103.

P.S.: to download Fukuyama’s article, you can click here

UPDATED: click here for the response for this post.

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