According to the Constitution, the Indones ian economic system is based on the basic princ iples contained in the Pancasila ideology, in which social justice features highly.
Article 33 of the Constitution states that the
economy is administered as a collective endeavor based on the principle of fraternity. Earth, water and all the riches contained therein shall be controlled by the state and utilized for the people’s maximum prosperity.
For that reason, vital business and ind ustrial enterprises are controlled by the state. Practices referred to as “free-fight liberalism” are rejected. On the other hand, even though the government controls the vital sectors of the economy, private enterprise is not only tolerated but encouraged so long as it support the national ideals as contained in the Constitut ion and the Pancasila ideology.
Instep with the development of the business and industrial sectors, the government is act ively trying to boost economic activity among the masses of the population by encouraging the setting up of cooperatives throughout Ind onesia ad in all sectors of importance to the people, such as fishery, farming and others to raise the general welfare of the people.
In the rural areas, village cooperatives known as KUD (Koperasi Unit Desa) have been set up with official encouragement to become
the backbone of the people’s economy. Through those cooperatives, farmers, fishermen and blue-collar laborers are encouraged to look after their needs and thereby raise their stand ards of living.
Indonesia welcomes not only domestic inv estments, but also foreign to provide both the skills and the capital that are needed for the nation’s long-term development efforts.
Category: Discover Indonesia