TEMPO.CO, Jakarta,
Written by: Dharendra Wardhana, a Ph.D. candidate on Development Studies from King’s College London, UK, currently works at the Directorate of Population Planning and Social Protection, the National Development Planning Agency (BAPPENAS).
In the midst of rampant negative news and seemingly gloomy prospects, the world's development within the last few decades has actually shown a positive trend. Taken into the perspective of longue duree, the average world income per capita has been increasing dramatically. The global poverty rate was halved in only ten years (2005-2015). Likewise, global income inequality rate has been declining since the last decade (Milanovic, 2016).
This remarkable progress is particularly underpinned with several facts. Prominent among these is the astounding achievement of emerging economies. Particularly China with the impressive growth nearly replicating what Four Asian Tigers (Singapore, Taiwan, South Korea, and Hong Kong) accomplished between the early 1960s and 1990s.
Similarly, in the context of Indonesia, economic growth has been sustained above the average rate of developing countries for the last ten years. Many predict Indonesia will be amongst the five largest economies in the next few decades. Purchasing power has increased markedly although jarring wealth gap has also widened for the last few years. In contrast with declining global inequality, the rate of within-country disparity seems to accentuate and can possibly trigger social problems.
Perhaps not surprisingly, the prospect of the global development in the following decade is brighter than the inception period of fin-de-siècle industrial revolution. With recent advancements, the use of information technology is ubiquitous although this poses serious disruption on employment creation. This profoundly affects countries with large segments of the youth labor force like Indonesia. Instead of a demographic dividend, the country will face difficulty to tackle the problems.
Besides, the positive development outcome so far has not been equally enjoyed in every country. In fact, it has been uneven and left a number of countries struggling with protracted issues of poverty and unemployment.
As it happens quite often, not every poor and developing country can graduate to be amongst the highly-industrialized nations. Several Latin American countries suffered and fell into "middle-income trap". Though the level of welfare might not be as miserable as poor countries, their living standard will not catch up with OECD countries. Data from the World Bank shows that only 17 out of 70 middle-income economies in 1987 had thrived to become high-income economies by 2016. This phenomenon is generally indicated with growth slow-down which ultimately make countries stuck in the middleincome status (Gill and Kharas, 2007 and Eichengreen et al, 2011).
Correspondingly, not every "rich" country can be referred to as a "developed" nation. Some still grapple with elementary issues on freedom of speech, democracy, women empowerment, corruption, and violence. One case in point is the Gulf countries. Endowed with abundant natural resources, most could not fully make use their comparative advantage to develop and transform the society. Schisms and series of political turmoil had dragged the development in the region. Some antecedents to this circumstance might refer to the resource curse and Dutch Disease (Corden, 1984). According to Acemoglu and Robinson (2012), democracy and political institution have far-reaching implications on economic performance and redistribution.
With the benefit of hindsight, phenomena like "middle-income trap" and "rich but not developed countries" have inevitably shaped the general opinion that some nations are not destined to reach the threshold of prosperity.
As the economy grows, more developing countries begin to encounter "First-World" problems. Issues like aging population and low fertility rise to the surface. With the new-found welfare, citizens will demand not only increased access to basic services but also the improved standard and quality.
Globally, there emerge the burgeoning programs of wealth creation. Numerous international cooperation and regional collaborations have led to the formulation of agreed development consensus incorporating pro-poor policies. Lately, Sustainable Development Goals (SDGs) encourage social policy expansion at the country level.
Arguably it seems, social policies in many parts of the world had become the linchpin of livelihood improvement for the most deprived groups. However, as the implementations were constrained by fiscal space, the benefits are targeted categorically to the eligible recipients.
This strategy is usually effective in increasing the welfare condition of the most vulnerable groups. It is also considered efficient as most social spending generally only takes a small proportion of the national budget.
Within the context of developing countries, targeted assistance can potentially be very instrumental in garnering the votes and making use the electoral franchise. Nevertheless, countries at the early stage of democratization generally encounter protracted issues such as patronage and clientelism.
The use of entitlement programmes to attract potential voters is a risky political strategy at once. Partly because well-off citizens and middle-class segment are growing rapidly. Well educated, young, and active, this emerging group become very demanding and critical towards the progress of development. If the benefits are allotted only for the lower segments of the society, the resentment will be built and lead to unforeseen complications. A number of incumbents at the local level had lost the election even after flurries of social policies.
The backlog of services and poor quality cause public discontent. With unmet grievances, people can be suspicious with the long overdue reforms. If not carefully managed, their aspirations might slip to negative thinking which leads to dwindling trust. For instance, the lack of public transport provision is associated with the malicious role of the automotive industry in restraining the progress as happened with the case of "General Motors streetcar conspiracy". Another example is the absence of drinkable tap water in cities imagined as the result of a conspiratorial plot of barons doing the business of bottled water. These thoughts albeit far too fictitious still do not help much to prevent the rising wave of "right-wing" sentiment, especially in the "post-truth" era.
DISCLAIMER
Articles published in the “Your Views & Stories” section of en.tempo.co website are personal opinions written by third parties, and cannot be related or attributed to en.tempo.co’s official stance.
