The main objective of PSI’s economic policy is to “promote public welfare” and to realize “social justice” as stated in the preamble to the 1945 Constitution. To promote public welfare and the realization of social justice, a quality economic growth capable of creating jobs for all is required.
Many doubt the benefits of globalization and market-driven economy. But PSI believes that globalization and market-driven economy are unlikely to be detached from our national interests. PSI encourages an open economic system in which the public becomes the prime mover by giving equal space for all economic actors from upstream to downstream. Creative young people are encouraged and even given incentives to engage in economic development. Indonesia has to start moving from dependence on raw material production to become part of the global production chain.
PSI also believes that a state continues to hold an important role in the market economy, to ensure our national interests are maintained. The role of the state is still needed as a regulator that facilitates the movement of business as well as to correct it if there is a negative trend. The general assumption that the market can correct itself is not true in reality. The government has the obligation to ensure Indonesia becomes a comfortable and safe place for national and international investment climate by facilitating the business licensing process, ensuring legal certainty, and eliminating illegal levies.
Specifically, PSI sees six sectors that support economic development: infrastructure, human resources, institutional development, tax reform, digital economy and tourism.
PSI sees the urgency to increase infrastructure development to address the mobility needs of citizens that promotes inter-regional connectivity. The limitations and low quality of infrastructure is one of the main causes of high transaction costs and inefficiencies. It creates disparity in inter-regional commodity price and long time to complete trade transactions.
PSI will continue to encourage increased investment in the sectors of roads, railway development, airports and sea crossings. Similarly, PSI views the importance of prioritizing investments in the communications and telecommunications infrastructure sector. Investment in this sector should encourage widespread participation for national, foreign and government private sector.
At the end, infrastructure will be the main pillar of Indonesia’s readiness to face the world competition.
- Human Resources
Economy driven by Indonesian people requires the readiness of human resources. Improving the quality of human resources is also linked to the increased capability of citizens to be involved and able to access more competitive economic activities.
With the demographic bonus and the number of people dominated by productive age, Indonesia has the potential to become a major player of the global economy. Currently, the nominal value of Indonesia’s GDP is already ranked 16th in the world. With a positive economic growth rate and its stability amid global economic uncertainty, Indonesia has an increasingly important position to become a locomotive of development on a global scale.
It includes the precise utilisation of social assistance that has implications toward economic development, such as behavioural change and improvement of individual skills. PSI supports the principle of social investment rather than social assistance. Social investment is a model program facilitated by the state for the weakest groups in society, both mentally and physically, that enables them to contributes to a wider community. State aid is not a form of mercy, but rather a form of enabling-investment for the people to contribute and pay back to the state.
- Institutional Development
The PSI emphasizes open institutional economic development. Indonesia is a comfortable big house for business and economy’s actors. It is a place for all children of the nation to develop themselves. Therefore, principles such as property rights, intellectual rights, competition, investment certainty, fair wage systems, legal certainty, and taxation systems must be developed and refined.
Businessmen, traders, producers, intellectuals, workers, and all citizens should be comfortable in doing economic activities in Indonesia. For this reason, PSI will actively take part in institutional strengthening, especially in the economic governance sector to improve legal certainty and reduce inefficiency and transaction costs as low as possible.
PSI views that people-oriented economic development requires domestic competition, the expansion of trade with the outside world and global economic integration, the quality of the state institutions that enable the economy to work, and the success of policy-makers in creating macro-economic stability.
- Taxation Reform
The tax reform will be the priority agenda of PSI. The model of taxation in Indonesia is seen to be punitive and burdens the economic actors and workers. This is an urgent matter to be addressed because the inefficiency in this sector will weaken Indonesia’s competitive advantage as one of the new economic forces in the world.
The issue of the tax system lies not only in the amount of tariffs imposed, but also on aspects of the type of economic activity or income taxed. In addition, institutional aspects and taxation management will also be a serious concern. The Ministry of Finance and the tax directorate should be encouraged to be more transparent and efficient.
- Digital Economy
PSI’s efforts to encourage the development of telecommunication and information infrastructure are based on an understanding of the shifting trend toward digital economic practice. Demographic structures today and the next few years will be more familiar with information technology as it will serve as the main platform for their business processes. This trend not only demands the government to prepare responsive and transparent legislation, but also to be responsible for protecting the privacy and freedom of internet’s usage and to provide the availability of cheap and fast Internet infrastructure.
PSI also has a growing optimism with the emergence of small and medium businesses that rely on the internet. Digital economy is the door to the world market, where domestic economic actors can directly reach the global market. PSI encourages the state’s active role in building regulations and provides incentives to strengthen the main foundations of the national economy: creative industries and small and medium enterprises.
- Creative Economy
Creative economy is an economic sector that relies on ideas, creativity and human knowledge as the main factor of production to produce high value-added products. Today, creative excellence can become more powerful in its encounter with the rapid development of communication and information technology. There are vast areas covered by the creative economy, from food-drinks, toys, clothing, paintings, dances, traditional artwork, newspapers, magazines, novels, poetry, theatre, music, movies, commercials, animations, comics to games, software and other new media products.
PSI believes the creative economy has a very strategic position in economic development that does not required to be centred in certain big cities. Indonesia has a series of comparative advantages. Indonesia has a very diverse cultural background that in some areas its preservation has tended to be neglected but in fact they are very potential to be developed as a unique and distinctive product of high economic value. The development of the creative economy sector is inclusive for all society that does not require the development of complex, sophisticated or expensive industrial infrastructure. Creative economic development does not need to be dominated by large investors, rather it can develop dynamically by involving small and medium business units. With improved communication and information networks, creative economic activities is feasible through collective work of creative workers throughout Indonesia. It has been proven that Indonesia is endowed with many creative workers and potential artists whose works are awarded in many international arena.
In the creative economy, large capital is not the issue. Rather, it’s copy right that serves as the biggest cost at the first place. The duplication of creative industry products is relatively cheap. The availability of such a large market in the country will create an economy of scale that allows the growth of creative business actors throughout Indonesia. If these creative entrepreneurs are able to host their own country, expansion into international market will follow automatically. Indonesia basically has all the conditions needed to repeat the success of Korean Wave.
To that end, the PSI will encourage laws that support and stimulate creative economic growth in Indonesia. I this scheme, PSI will encourage the adoption of strict laws against violations of Intellectual Property Rights over creative economic products in Indonesia.