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Economists question Government data on Employment and Poverty


Monday August 21, 2006

Days after President Yudhoyono gave his State Address and Financial Note for 2007 before Parliament, a number of economists questioned data used by the President in his Address. These economists are among others, Fadhil Hassan, Iman Sugema, Aviliani, Dradjad wibowo, Hendre Saparini and Ichsanuddin Noorsy. 

While they underlined that their criticism on data presented was not because they questioned the sincerity of the President, nonetheless, they felt that the President was being too optimistic when he presented outdated or out-of-place data. 

On the subject of poverty, which the President mentioned was down from 23.4% in 1999 to 16% in 2005, this had to be further explained. Since February 2005, when poverty was down to 16%, this number, however increased to 18.7% in July 2005 and further mounted to 22% in March 2006. 

Whereas, data on unemployment presented, which was down from 11.2% in November 2005 to 10.4% in February 2006, this was like comparing apples to pears. Comparing February 2005 to the same month in 2006, the number of unemployed actually increased from 10.2% to 10.4%. In November there is usually an increase in employment since this is the month for the grand rice harvest in the country, which employs many more people. 

Furthermore, since the government assumed that 2.1 million people will be further employed in 2007, this seems impossible, said the economists, since with expected economic growth of 5.8% in 2006 and 6.3% in 2007, and elasticity of employment of 265,000 persons, therefore 2007 economic growth can produce only around 500,000 new jobs, so the economists claim, as reported by Bisnis Indonesia. 

Again, on the subject of economic growth in 2007, which the President predicted could expand to 6.3% at an inflation rate of 6.5%,they contested that this assumption is impossible, since if the economy could grow by 6.3% (which they question) then inflation must be more than 6.5%, since growth is expected to originate from government spending and public consumption only. 

On these “accusations”, Minister for National Development, Paskah Suzetta, explained that data revealed by the President in his National Day address were cited from the social-economic survey made in February 2005. Whereas, surveys undertaken by the National Statistics Bureau in July 2005 and March 2006 will be published only in September 2006. To contentions that the number of poor has increased after the hefty increase in domestic oil prices in October of last year, Suzetta remarked that he would prefer to wait until September when results of the independent survey are out.