VIVAnews - The government must set the Rupiah exchange rate at a fixed level to maintain purchasing power. The government's decision to surrender the Rupiah to market mechanism may ruin purchasing power.
Economist Hartojo Wignjowijoto said on Monday, Dec 29, that given the current global economic crisis, free exchange rate will directly affect people's purchasing power.
"To maintain people's purchasing power, the exchange rate must be fixed," said Wignjowijoto during a discussion "Between Hopes, Promises and Realities".
He pointed to financial and macroeconomic policies that the ministers for the economy, especially Finance Minister Sri Mulyani, issued, which are, in his opinion, quite inappropriate. "Minister Mulyani is only good with local issues, while in fact, what we need is someone who can speak before the international [forum] so that the United Nations can assist us," he said.
He also criticized policies on such natural resources as gold, copper and gas which only benefit few people, and even then not Indonesians. The poor control over natural resources, according to him, does not improve people's welfare.
Wignjowijoto also condemned decisions that do not take into account local needs. "The government, with its collective team, should seek collective wisdom based on local wisdom," he said.
In addition to setting the exchange rate and maintaining the domestic market, he suggested that migration to islands outside of Java should be promoted, taking into account the high population density of the island.
Translated by: Bonardo Maulana Wahono
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