It's Alan Greenspan

I just found out the book of Alan Greenspan yesterday at Gramedia Bookstore. The title is Abad Prahara. The book price is a hundred thousand rupiahs discount 20 % at the bazaar. I'm kind of interested to read it, but somehow I have made a little research on internet about Alan Greendspan.. and it's dissapointing...

He was blamed for the financial crisis for policies that he drawn when he was chairman of the Fed. Stiglitz and Krugman also blamed him for the same reason. Wow.. if two nobelist blamed for the same thing, it must be very wrong.

Government Spending.. Can we rely on this engine?

According to Keynesian, the GDP from expenditure side is explained as Y = C + I + G + (X-M), where C stands for Consumption, I = investment, G for Government Spending and (X-M) as net export.

Many economist said that Indonesia’s economic growth is led by consumption showed by its share on GDP (61% of GDP, 2008). But it will disturbed along the crisis since the investment (the share on GDP is 8%) is declining and so is net export. Indonesia is the second country in the fall down net export after Rusia.

In this global crisis situation, according to Keynesian, the government spending could be another way out as engine of growth. As we know, the government had given stimulus for about 73,3 billion to make the economy work, 12,1 billion of it is for the infrastructure development.

The rumor said that government will give stimulus package for government employee like remuneration package. They might be hope that this stimulus will run the economy as the whole. But can we rely on this?

When data speaks for itself, that's when you say nothing at all..

After reading and analyzing how top level decision maker in this country spoke up with figures held by central bureau statistic Indonesia, I begin to see the red line. They treated data in their own way not how it is generated. It makes the translation on data become multi translations. Sure, as a quotation said that statistics is the only science that enables different experts using the same figures to draw different conclusions. (Evan Esar; 1899 - 1995).. but that can not be used as justification on what they did to data. They should treat data very carefully.

First thing first they have to be sure knowing what is the purpose of data collection, after that the methodology. Because, even they have the same purpose if the methodology is not the same, it could draw different conclusions. Say, the collection of Indonesia's population data. The CBS always take every 10 year population census and mid population survey between the census. They collected data by visiting every household, door to door. Meanwhile Dinas Kependudukan collected data based on report. They waited household to report to them about coming and incoming household, about death and birth. Those two kinds of how data collected are not comparable, not apple to apple. Unfortunately, there is still many decision makers, politicians, even researcher and college students blame the difference of the figures. Well, it looks like blaming is a habit of our society, but it won't solve the problem.

Let’s take a look on how they treat or use data. Nowadays, people start to respond on data. They begin to have self awareness on how figures presented. Many advertisements give fact findings by showing the survey result. Politicians also use it to make them look good or to let their vows look bad. And the data itself have nothing to loose but to be used.

It became a common model to have surveys that held by surveyor agencies. Like I said before, even the purpose is the same, if the methodology is different, it would draw different conclusions. The methodology includes the time reference, sampling, estimation method, and a lot of more. When these things happen, people get confused. People seem to loose confidence on data.

Now, what if the purpose is remain the same, the methodology is the same, including the sampling frame, time reference, etc and even the surveyor is the same person. The only thing that is not exactly the same is the institutions that held the survey. What will happen? Do the result the same or not?

The answer is yes the result is the same but the survey is useless..
Why those institutions held the survey with everything the same just to know the same thing and spent a lot of money. Just to prove that statisticians is a man who believes figures don't lie, but admits that under analysis some of them won't stand up either, Evan Esar said. In economics we call it inefficient.

That’s why we need a strong, dependable, trusty, independent institution to hold the survey and census. Especially the result of the survey will be used to draw policies. That will be the CBS role. Still, from statistic’s quotation “there are three kind of lies ; lies, damned lies, and statistics”. But data will speaks for itself, that is when you say nothing at all..

It's just slowing down..

I had this 'de javu' feeling couple days ago. Many indicators say that we are facing economic downturn. Start from the economic growth. Although Statistics Indonesia reported that 2008 economic growth is 6.1 percent, a little bit close to the target 6.2 by the government, it doesn't mean that it's the end of the world. Okay, we're not achieving the target but lets take a look other indicators. IHSG, although it was sharpening down but it's about to make more correction. Exchage rate.. it's fully influenced by global economic situation. Inflation rate, it's a little bit out of the track from inflation targeting that held by the central bank.

The concern of this economic slowing down is the unemployment rate. Statistic Indonesia have not announced it yet, but many experd already give their prediction. The unemployment rate is raising. The concept of unemployment itself is still in debate. According to Statistic Indonesia, people who work for less than one hour a day is considered as unemployment. How about people who have business like 'ojek' or just do a little trade at home? They are not considered as unemployment. So, if the unemployment rate is not raising up, it's just simply because there is shifting from formal job to informal job. We are not closing our eyes to the figure of unemployment rate supposed to be. But please be optimistic..

Back to the topic, when I read the headline of the jakarta post today, it is written that growth hit hard by global slowdown. Here's the quotation..

The Central Statistics Agency (BPS) reported on Monday that the economy expanded 5.2 percent in the fourth quarter of 2008 from a year earlier, slower than the annualized growth rate of 6.4 percent booked in the previous quarter.

Worse still, on a quarterly basis, the economy contracted by 3.6 percent in quarter four from the previous quarter, although BPS head Rusman Heriawan added that a similar contraction had occurred in the same period in the last two years.

”This was not surprising as the economy usually contracts in the fourth quarter compared to the third quarter, as industrial output slows and harvest time ends. But the crisis made the contraction (in 2008's fourth quarter) deeper."

Another victim of the global situation is our economic engine - export. By the crisis, the export is moving down. We still have another engine, the government spending. But how to make this engine more efficient to move on? It's the government to do list priority. It's just slowing down.. keep on moving, keep on optimistic and keep on working..

And it's all coming back to me now

Deciding one decision is not as simple as one two three. It takes a lot of energy to think and rethinking. When I have to choose between this and that, I will have the pros and cons table before making my decision. One thing for good is if it is not the right one, at least we've considered it again and again, and we'll feel no regrets.

Destiny, that's what I call if it didn't suit me at all. And I have to accept it, face it, live it. Never regret everything that you've decided, that's what my mom always told me. And I always believe that everything is happened because of something. And it's all coming back to me now.. face it!

Life Before June 08

Life before June 08 :

Everything is so light.
No tensions
No frictions
No text message traffic
No emails traffic
Uugh how life changes so fast
Welcome to the fast track..

Investasi di jaman Nabi Yusuf

Sebuah kisah dari Al-Quran yang bisa menggambarkan bagaimana seharusnya perekonomian bekerja. Dalam surat Yusuf (QS:12, 43-49) diceritakan bagaimana Nabi Yusuf menafsirkan mimpi raja tentang tujuh ekor sapi betina yang gemuk-gemuk dimakan oleh tujuh ekor sapi betina yang kurus-kurus dan tujuh bulir (gandum) yang hijau dan tujuh lainnya yang kering. Nabi Yusuf menerjemahkan mimpi itu …Supaya kamu bertanam tujuh tahun (lamanya) sebagaimana biasa; maka apa yang kamu tuai hendaklah kamu biarkan dibulirnya kecuali sedikit untuk kamu makan. Kemudian sesudah itu akan datang tujuh tahun yang amat sulit, yang menghabiskan apa yang kamu simpan untuk menghadapinya (tahun sulit), kecuali sedikit dari (bibit gandum) yang kamu simpan….

Dan begitulah ekonomi bekerja. Selalu ada masa-masa sulit dan masa-masa menyenangkan. Namun di masa-masa yang sulit sekalipun selalu ada jalan keluarnya. Salah satunya dengan saving. Seperti dalam teori Keynes, Y = C+I, pengeluaran terdiri dari konsumsi dan investasi, dimana I = S atau investasi dianalogikan dengan saving. Setiap dari kita selalu harus menyisihkan apa yang kita peroleh untuk ditabung guna menghadapi masa-masa sulit.
Dalam surat Yusuf itu juga disebutkan agar tidak menghabiskan semua bulir gandum melainkan menyisakan sebagian untuk simpanan dan sebagai investasinya dalam bentuk bibit. Maha besar Allah, yang sudah memberi petunjuk kepada kita akan pentingnya arti saving dan investasi ini.

Relevansinya dengan kondisi sekarang bagaimana? Kondisi perekonomian global yang saar ini sedang mengalami perlambatan pertumbuhan ekonomi akibat kegagalan mekanisme di sektor finansial harus belajar banyak dari pelajaran yang bisa diambil dari Surat Yusuf tersebut. Bahwa dalam perilaku untuk berinvestasi, perhatikan cara dan mekanismenya. Bila di surat Yusuf disebutkan untuk berinvestasi menyimpan bibit di batangnya untuk mengurangi cost of inventory, maka langkah yang bijaksana yang patut diambil oleh kita adalah dengan mengurangi cost of risk atau biaya resiko. Karena tidak memperhatikan aspek resiko berinvestasi inilah yang membuat banyak perusahaan besar dan tua bertumbangan. Selain itu, pernah dalam suatu interview di tahun 2003 Robert T Kiyosaki pernah mengatakan bahwa sebaiknya tidak berinvestasi di satu keranjang saja, melainkan di beberapa tempat. Sehingga bila investasi di satu tempat kolaps maka masih ada investasi lainnya.