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Manajemen Waktu Proyek Pemerintah: untuk menekan laju Inflasi dan menjaga stabilitas nilai tukar Rupiah

Manajemen Waktu Proyek Pemerintah: untuk menekan laju Inflasi dan menjaga stabilitas nilai tukar Rupiah

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Published by: Darmawan Soegandar on Oct 18, 2012
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ISEB2012. – Conceptual Paper
1
TIMING OF GOVERNMENT PROJECTS:
TO REDUCE INFLATION AND MAINTAINING STABILITY OF RUPIAHEXCHANGE RATE
Darmawan
Management Science Doctorate Program, School of Post Graduate StudiesIndonesia University of EducationBandung, Indonesiadarmawanmpa@windowslive.com
 
SCIENTIFIC SUMMARY
The inflation rate in Indonesia is usually increased at about the end of the year, the third quarter. Thiscan be caused by many factors, most often the primary factor is the already endless number of primary agricultural crops, resulting in rising prices of rice in the market. Year-end holidays and religious holidaysalso encourage excessive consumption, it certainly contributes greatly increases the rate of inflation. Onthe other hand many of the ministries / agencies, which have for years been implementing the same project management. Almost all ministries / institutions have a low budget absorption in the first half.Even many tender new projects began in about August. This result, new projects can be run in October,November and December. Of course, this affects the accumulation of two possibilities, the amount of money in circulation and the possibility of project failure because of the financial year ending.Subsequently issued a dollar-Budget Revenues and Expenditures - Budget Revenue and Expenditure may increase the rate of inflation, of course, further encourage increased Rupiah exchange rate.Keywords: government projects, inflation, exchange rate
Background:
Data from the Central Bureau of Statistics show
1
the absorption of the budget in almost all ministriesand agencies in the first semester (January-July) was so low. It affects the central government spendingin general shows a characteristic absorption pattern of spending is low in the first half and piled at theend of the fiscal year. These data suggest at least the activities of government in this month aloneexcept for routine expenditures, such as personnel expenditure, spending on services and the relatedservices, stationery, and building repairs. Which means, spending an employee who is still dominatingthe State Budget and Regional Budget? In addition, almost none of the government project, the ministry/ institution carried on in the month of this semester. This can be seen from the two indicators 1) atleast factual project activities of government, both central and local governments and 2) little orvirtually no government project tender offer in the national media during both the central government,local government, institutions and even other government agencies ( such as procurement of goods andservices in college). Patterns that occur at the level of the central and local governments will interferewith the performance plan policies the State Budget on the economy in general. On the other hand, arelikely to impact on economic growth, employment and poverty reduction target of fiscal policy inparticular.
1
 
Based on the Central Government Financial Statements (LKPP) Semester I 2006-2011
 
 
ISEB2012. – Conceptual Paper
2
According to the Directorate General of Taxes, Government Project is a project listed in the Entry ListProject (DIP) or equivalent document DIP including projects financed by the Loan Agreement Forwarding(PPP) / Subsidiary Loan Agreement (LOA). The project - a project of this government activity both goodsand services spending will suddenly jumped in the last three months, October, November andDecember. In the month - this month, all the ministries / agencies, central government and provincialand district governments are busy. Even in November and December all the hotels of three stars andabove, all of education and training ministries / agencies, central and local government is full of eventsworking meetings, seminars, and workshop. All government organs will compete to be excessivespending that would end this budget. As will be the performance of a government organization is onlymeasured by the absorption of the budget, rather than on the achievement of performance outputs,outcomes and benefits that are outlined in the budget year.Based on the Central Government Financial Statements (LKPP) semester of 2006 through the first half of 2010 shows the low absorptive capacity, which means at least a budget of government activities outsidethe regular shopping in January until the month of July. Percentage of budget does not even reach 50%(half of the budget) or even 40%. Data show the movement is only about 20% to 30%. Even at the end of the year was not much different, Year 2010, the absorption of capital expenditure only reached 84.49percent, or about Rp 80.29 trillion from an allocation of Rp 95.02 trillion. However, in the State Budgetof 2011 the government has increased allocation of capital expenditure amounted to Rp 140.95 trillionin the State Budget Amendment of 2011. Absorption of the realization of capital spending until earlySeptember 2011 only 26.9 percent of the allocations in the State Budget Amendment in 2011. Realizablevalue is lower than the absorption of capital expenditure over the same period last year amounted to27.9 percent.Absorption of the budget that is often conducted by the Ministry / Agency on a large scale at the end of the year could trigger inflation. The inflation rate in November, even December of each year, is expectedto also be triggered by the absorption of the state budget is aggressive at the end of the year. Whichadds to the problem then is in addition to absorption due to massive budget by ministries / agencies, onNovember inflation rate is likely to occur because some of the prices of commodities such as rice andred pepper has increased.There are some commodities that experience price increases, such as rice, red pepper. The condition islikely to continue until December because the harvest had passed so that the distribution and supply of rice will depend on the remaining stock of reserves and imports. That inflation will be higher inDecember than November; the high rice prices have gone up because the harvest is almost over. This isexacerbated by climate change is difficult at this point in the forecast, so farmers difficult to regulate thegrowing season and plant species that will be in production by farmers. Of course this also because of religious holidays (Christmas day), end of year holiday, which often also lead to high demand for goodsand services. Moreover, with the leave policy that the government is set to boost tourism.
Hypothesis and Aims:
Hypothesis of the paper is “Is timing of the government project can reduce the rate of inflation so thatthe effect on maintaining stability of the rupiah exchange rate?”The aims of this paper is to look for alternative policies that could be achieved for budgeting andrealization, in an effort to reduce inflation, and maintaining stability of the rupiah exchange rate, by wayof equitable distribution of government projects during the fiscal year.
 
ISEB2012. – Conceptual Paper
3
Design:
Simply Inflation can be defined as rising prices in general and continuous
2
. This means an increase in theprice of one or two items alone cannot be called unless the rise in inflation that resulted in priceincreases in other goods (domino effect). While the opposite of inflation is called deflation.Several indicators are often used to measure the rate of inflation such as the Consumer Price Index(CPI)
3
. CPI change from time to time show the price movement of goods and services consumed by thepublic. Since July 2008, the package of goods and services in the CPI as an indicator has been done basedon Cost of Living Survey (SBH) in 2007 conducted by the Central Statistics Agency (BPS). Then, the BPSwill monitor the price movement of goods and services on a monthly basis in several cities, thetraditional and the modern market for some types of goods / services in each city.Other inflation indicators used by international best practice include:1.
 
Wholesale Price Index (WPI). WPI is the price of a commodity transaction that occurs betweenthe seller and wholesaler first with buyer / trader the next big market in large numbers on thefirst of a commodity.2.
 
Gross Domestic Product Deflator (GDP). Describe the measurement of the price level of GDPfinal goods and services produced within a country. Generated by dividing the GDP deflator of GDP based on nominal prices to GDP at constant prices.According to Central Bureau of Statistics, inflation as measured by the CPI in Indonesia are grouped into7 groups of expenditure (based on the Classification of individual consumption by purpose - COICOP),namely: Food Ingredients Group, The Food, Beverage, and Tobacco, Housing Group, the Group clothing,Group Health, Education and Sports Group and the last group of Transport and Communications.Besides COICOP groupings based on the way, the current BPS also publishes other inflation basedgrouping called disaggregation of inflation. Disaggregation of inflation is taken to produce an inflationaryindicator that further illustrates the influence of fundamental factors.In Indonesia, in practice disagegasi CPI inflation is grouped into several types based on the cause:1.
 
Core inflation, the inflation component is likely to persist or persistent (persistent component)in the movement of inflation and are influenced by fundamental factors, such as:
o
 
Demand-supply interaction
o
 
The external environment: the exchange rate, international commodity prices, inflationin trading partner
o
 
Inflation expectations of traders and consumers2.
 
Non-core inflation, the inflation component of high volatility tends to be influenced by factorsother than fundamentals. Non-core inflation components consist of:
o
 
Volatile components of inflation (Volatile Food):Inflation that is predominantly influenced by shocks (shocks) in foodstuffs such asharvesting, natural disturbance, or developmental factor prices of food commodities fordomestic and international food commodity prices.
o
 
Inflation component of the government regulated price (Administered Prices):Inflation is predominantly influenced by shocks (shocks) in the form of governmentpricing policies, such as the price of subsidized fuel, electricity rates, transport rates, etc.
2
See Pratama, Rahardi. 2001:203. Ekonomi Makro. Jakarta: Salemba Empat, Universitas Indonesia.
3
As a comparison can be seen also how to measure the rate of inflation:
Nopirin. 2000. Ekonomi Moneter.Yogyakarta: BPFE.
 

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