Monday, August 14, 2017

State-Owned Corporations (BUMN)

State-Owned Corporations (BUMN)

The companies belong to the corporations. All activities undergone by the companies belong to the corporations activity. In the previous it has been explained that the companies are the place where the services and the production processes are undergone. Therefore, the production process is undergone inside the environment of the corporations which owns them. For instance, PT Tirta Kencana has a company in a form of a soft drink factory. The production process of soft drinks undergone in the factory has the meaning that it is undergone inside the environment of PT Tirta Kenca. It is obvious that the corporation is a place where the production process is undergone.

What is the relationship between the corporations and the agents of economy? Do you know what the agents of economy are? The government, the private companies, and the cooperatives are the first agents within the 
Indonesian economy. They take a part in establishing the corporations. They invest capitals in various kinds of corporations. These corporations has played important role in many production processes to gain the social welfare's. Therefore, the kinds of corporations can be determined by their capital owners which called the three agents of economy.

In managing the branches of production and the natural resources controlled by the nation, the government establishes the State-Owned Corporations (BUMN). It is a corporation the capital of which is derived from the national assets.

Forms of State-Owned corporations

According to the description above, the main characteristic of the state companies are their capitals derived from the national assets. Thus state-Owned Corporations has three forms of companies. Every single company has its own characteristics.

Public Companies

It is one of the forms of the state-owned corporations. You should study this description to understand what 
public companies are.

a. Definition of Public Companies
It is the state companies the purpose of which is providing services for public interest.

b. Characteristics of Public Companies
They have certain characteristics as the following:
  1. providing services for public interest is the main purpose;
  2. having legal status;
  3. mostly concerning in vital service;
  4. led by the board of directors;
  5. its employees statuses are the state companies workers.
  1. Perum perhutani runs some activities dealt with the forest managing.
  2. Perum Pegadaian which was used to be in a form of a bureau companies turned into public companies. Their charge is in mortgage service.

Incorporated Companies

The state-owned corporations have this form of companies the most. You should study this description to understand the characteristics of the incorporated companies.

a. Definition of Incorporated Companies
They are a form of the state companies which manage a certain production field and the purpose of which is to earn profits.

b. Characteristics of Incorporated Companies
Their characteristics are as the following:
  1. having a form of Incorporated or Limited Companies (PT);
  2. the purpose is to earn profits;
  3. obtaining no facilities from the government;
  4. led by the board of directors;
  5. their employee's statuses are the private companies workers;
  6. their shareholder is the government.
  1. PT Pupuk Sriwijaya runs fertilizers production business.
  2. PT Bio Farma runs vaccine production business.
  3. PT Pos Indonesia runs post business services.
  4. PT Garuda Indonesia runs flight business.

The state-owned companies that have been 'go public' are PT Aneka Tambang Tbk, PT Bank BNI Tbk, PT Bank Mandiri Tbk, and PT Telkom Tbk. However, most of the state companies are incorporated companies today.

Beside those forms of state companies, there are also the Regional-Owned Corporations (BUMD) which are owned by the regional governments. These companies derive most of their capitals from the regional assets.

The regional governments authority in managing the The Regional-Owned Corporations is stated in the Government Regulation No. 25/2000 (Peraturan Pemerintah No. 25 Tahun 2000) concerning the Government Authorities and the Provincial Authorities as The Autonomous Regions.

The characteristics of the Regional-Owned Corporations are as the following:
  1. being built based on the regional regulations;
  2. being led by the directors who are promoted by the boards of regions with the House of Representative's considering;
  3. the directors tenure is within four year;
  4. the purpose of which is collecting the regional incomes to support the regional developments.
  1. the Municipal Waterworks (PDAM);
  2. the Regional Transportation Companies;
  3. the Regional Parking Companies.

The Role of the State-Owned Companies

There are some important roles of the state-owned corporations as the follows.
  1. As the manager of primary branches production and of the natural resources owned by the state for the purpose of producing goods and services for the social welfare's.
  2. As the employers.

Sunday, August 13, 2017

Types of Companies Based on Business Fields

Prawn embankments belong to the agrarian companies
Prawn embankments belong to the agrarian companies (

The companies owned by the corporations can be in forms of factories, workshops, shops, plantations, warehouses, and livestock. Those forms are based on their business fields.

  1. Factories are a form of companies dealt with industries.
  2. Shops are a form of companies dealt with trades.
  3. Beauty Salons are a form of companies dealt with services.
  4. Workshops are a form of companies dealt with services.
  5. Piscatorial companies at the sea are a form of companies dealt with extractive industries.
Based on the business fields, companies can be classified into five types, i.e. extractive companies, farms, industrial companies, trades, and service.

1. Extractive Companies

They are a type of companies the business of which is gathering anything available on earth. The companies belong to this group are mines, piscatorial, logging, sea weeding, and salt making. Mine companies are companies the business of which is mining and processing the mine goods such as oil mines, or mines, coal mines, tin-mines, and nickel mines. Mention some extractive companies around your area!

2. Agricultural Companies

They are a type of companies the business of which is cultivating a land into a farm land then grow plants in order to fulfill the human needs. For examples are rice fields, peanuts, horticulture's, rubber plantations, coffee plantations, tea plantations, and quinine plantation.

Agriculture companies belong to the agrarian companies the business of which is cultivating the lands into the useful in fulfilling the needs.

The agrarian companies are farms, plantations, forestry, fishery, and livestock. Mention some agrarian companies around your are!

3. Industrial Companies

They are a type of companies the business of which is processing raw materials into the goods or half-made materials or process half-made materials into the goods.

  • Rattan handicraft companies turn the rattan (raw materials) into some goods (rattan chairs and rattan plaints).
  • Wheat flour companies turn the flour (raw materials) into wheat (goods).
  • Bakery companies turn the wheat (raw materials) into many kinds of bakeries.
Other examples of industrial companies are car assembly companies, fertilizer companies, chemical companies, and footwear companies. Are there any industrial companies around your neighborhood?

4. Trading Companies

They are a type of companies the business of which is gathering or distributing production yields from the producers to the consumers. Examples of this company are store business including the export and import companies. Mention some trading companies around your are!

5. Services Companies

They are a type of companies the business of which is providing services for the consumers to get paybacks. This type of companies can be classified into two types, transportation services and other service companies.

a. Transportation services are transporting not only people but also the production yields to some certain places. For instances are transportation companies for the buses, minibuses and trucks.
b. Other service companies include:
  • production processing assistant service, e.g. bank service and warehouse services:
  • services forwarded to the consumers, e.g. insurance companies, doctor services, tailor services, and barber services.

Saturday, August 12, 2017

The Private-Owned Corporations (BUMS) Part I

The Private-Owned Corporations (BUMS)

It is a type of corporations the capitals of which belong to the private parties. Personal or group capitals are the sources of these corporations and their main purpose is to learn profits.

They can be categorized into four kind namely incorporated companies, firms, limited partnerships, and limited liability companies.

Incorporated Companies

It is  the simplest form of the private-owned companies. You should carefully study the description below to a further understanding.

1. Definition of Incorporated Companies

They are companies which have been established, owned and lead by someone. Therefore, he/she become the leader and the owner of the companies.

2. Capital Sources

Their own capital sources are derived from the owners assets or from the loans. Therefore, the owners have been responsible for his/her loans.

3. Establishment

To establish a company someone must ask the regional government for the permission.

4. The Owners Assets

The owners of the companies have two kinds of assets. They are personal assets and the companies assets. The personal assets are used to  fulfill the owner's household while the companies assets are used to manage his/her companies. In running the companies business the owners should be able to separate their personal assets and the companies assets. For, they are used to calculate profits and the companies tax.

5. The Owners Responsibility

They have unlimited responsibility in running the business. It means that if the companies fall into bankruptcy, the owners will take their own assets to pay the debts.

6. The Advantages of Incorporated Companies

There are some advantages of the companies as the follows.
  1. It is easy to establish.
  2. The profits belongs to the owner.
  3. The guarantee of the companies secret.
  4. The owner is free to determine his/her own policy.
  5. It is easy and quick to make decisions if the owner faces some business problems.

7. The Weaknesses of Incorporated Companies

There are some weaknesses as the follows.
  1. The unlimited responsibility of the owners.
  2. The limited capitals derived from one's assets.
  3. Because of depending on one's assets the companies last unsecured.
  4. The limited management ability.
The kind of companies is suitable for any production fields such as farms, livestock, fishery, handicrafts, and trades. Mention some Incorporated Companies around your residence!

Firms (Fa)

The firms is one of kind private-owned corporations. On order to know about firm, described as the following.

1. Definition of Firms

They are a partnership of two persons or more who establish a company using one name and all members are responsible for the company.

It is free to choose the name of the firm but it is usually derived from one name of the members. For instance, the firm founded by Gunawan, Mustofa, Harahap, and Mahendra was named "Mahenda Firm". All members of the firm become the owner, the leader, the director, and the manager.

2. Capital Sources

The capital are derived from all members of the firm. The capital loans become the members responsibility. Therefore, if one of the members borrows some money in the name of the firm, he/she have to tell the rest of the members. Since one members act using the name of the firm binds other rest of the members.

3. Establishment

The firms are established with some notary documents. The name, the address, and the occupation of the members, the name of the firm, the numbers of capitals and the name of the endorses to sign the document are listed on the notary documents.

The members of the firm should know each other well or they belong to a family.

4. Members Assets

In running the firm business, the members should separate between their own assets and the firm assets. This separation means to avoid corruptions from other members and to calculate profits and taxes.

5. Members Responsibility

Every member has unlimited responsibility. It means that if the firm is in a great debt, all members are responsible for paying it.

6. The Advantages of Firms.

There are some advantages of firm as the follows.
  1. The firms last securely.
  2. Able to collect bigger capitals.
  3. Better management from the division of duties.

7. The Weakness of Firms

There are some weaknesses of firm as the follows.
  1. The members responsibilities are unlimited.
  2. It takes much time to solve the problems in a firm.
  3. Different opinions among the members are possible to happen.
  4. The loss caused by one member becomes the whole members responsibility.

The use of firm (Fa) is usually placed in front of the name of the corporations, "Fa Mahendra" for instance. Today there are some other names of firms the abbreviation of which is placed after the name of the corporations such as Companies (Co) and Brothers (Bross), for instance Mahendra & Co or Mahendra & Bross.

The firms are suitable for running some middle companies which have no great deals of risks. Mention some firms around your residence!

Friday, August 11, 2017

The Elaboration of Creative Idea In Economic Action to Achieve Independence and Welfare

The Elaboration of Creative Idea In Economic Action to Achieve Independence and Welfare

Power of creativity and innovation is the means or capital to independent. Independent means not to cleave to other people. Independent people will be able to overcome difficulties of his life. It is necessary to train independence as early as possible. Therefore, you need to take a note of the following.

1. Concentrate your attention on the your Strength to Complete your Job.
Everyone has strength and weakness. Take advantage of your strength to train your independece. Do not under estimate your potential. Even the smallerst of any potential is very userful for indepencent living.

2. Practice for Facing the Next Job
There are many jobs await you. Do the jobs with a vengeance.

3. Choose the job you like most
By selecting the job you like most, you can enjoy the job.

4. Combine Perseverance and Potential.
By preseverance and potential, you will reach maximum and satisfying product.

5. Define the Goal.
You should always think, "what success do I want to achieve with this job?"

6. Elaborate your Self-Confidence
To live independently, you need to have self-confidence. WIth self confidence you will not hesitate to step ahead towards independence.

7. Willing to Take any Risks
Every job has risks. If you have fear to take a risk before you do something you will not achieve independence.

To welcome the future, you can occupy many fields from now on. It is only technology, but arts, craft, and sports as well. You can start to open up many jobs right now.. Start from a small thing first. You can also develop Creative ideas in the economic field. For example, practice to repair motorcycle, television, video, to sew, and to run small businesses. Many successful people to started their business from a small one.

To get opportunity for employment in the 21st century, it is important that you must not be shy, be diligent, be creative, persevere, have wide knowledge and dare to risk. If you have those behaviors, you will not find difficulty to get a job. Even, it is possible that you will be able to create employment. Thereby, you can achieve not only independence but prosperity for your self and the community. as well.

Try to choose one of job that you can finish it by yourself in accordance with your talent.
  1. Composing short stories, novels, simple scientific articles, travel reports, reviews of regional tour, illustrated stories, or the other article. Send your work to one of magazines. There are many magazines for children at the junior high school. If the publisher refuses your work or it cannot be printed at once, do not give up. Try again until you get success.
  2. If you feel that you have talent, try to compose a song. Try to sing your song together with your friends.
  3. If you are chosen as the management member of school cooperative do your job sincerity and diligently for business practice.

The three suggestions above are just simply examples. Of course, you can choose other jobs according to your ability. The key is try, do it diligently, and complete the job.

Thursday, August 10, 2017

Creative Ideas in Economic Action Part II

Aircraft flying is the result or creativity in transportation field. (

Creative and Innovative Idea

You have already known that the creative idea is the idea that can produce new better ways to do something. Thus, creative idea related to the invention of new ways or renewal. Renewal in culture, especially in technology and economic is called innovation. So, creative ideas related to innovation.

Innovation is also closely associated with the development or renewal of a company, both production and marketing and field. Creative Employers always make innovation for development of his company. Thus, the company always producers new products in accordance with the taste of consumers.

The purpose of innovation made by company is to obtain production that has standards as follows;
  1. design and model meet the taste or attract the consumers;
  2. reliable quality;
  3. more comfortable to be consumed, so it is satisfying the consumer
  4. superior product different from other company product;
  5. multifunction;
  6. competitive price.

Product of Creativity and Innovation

Product of creativity and innovation can make life easier.

1. Product of Creativity

Creativity ideas manifested in action will bring creativity. There are many product of creativity in production fields, both companies and individuals production. These are the example.

Several companies produce product of creativity in production field. In the past, such products were not familiar, but now people get the benefit of these products, for example: computer, internet, mobile phone, satellite, and the digital parabola.

There is creativity result, which is very important though human has not felt the benefit directly, for example spaceship.

Meanwhile, there are many popular products of creativity from Indonesia.

  • Technology: "Sistem Pondasi Cakar Ayam" (Chicken Claw Foundation System) created by Ir. Sedyatmo.
  • Works of literature: "Kabut Sutra Ungu" (Purple Silk Fog) and "Lukisan Mawar Jingga" (Orange Rose Painting) by Ike Supomo, and a poem, "Aku" (I) created by Chairil Anwar.
  • Art painting, "Kebakaran Hutan" (Forest Fire) and "Pertarungan Harimau dengan Banteng" (The battle of tiger VS Bull) created by Raden Saleh.
  • Art music (the songs): the national song such as "Indonesia Raya" (The great Indonesia) created by W.R. Supratman and "Rayuan Pulau Kelapa" (persuasion of coconut island), "Halo-halo Bandung", and "Gugur Bunga" created by multitalented composer musician Ismail Marzuki.
  • Art sculpture "Pohon Perkembanga" (Tree Development) created by G. Sidharta Soegjo).

There are many creative products of world prominent figure in the past that are useful for human beings.

  • Electricity by Thomas Alfa Edison (United States).
  • Telegraph by Guglielmo Marconi (Italy).
  • Penicillin by Sir Alexander Flemming (UK).

There are many other great figure both in national and in international level. They were managed to creat useful innovation for the welfare of society and humanity.

2. Innovation Product

At present, many companies make innovation to create forms, models, and designs to meet the tastes of consumers.

For examples of innovations, such as;
  • Car companies issued various type of car from the factory as a result of innovation.
  • Mobile phone companies from one factory produce various models and types.
It is true that nowadays, companies compete to make innovation to attract the consumers. Can you mention some examples of a motorcycle as a result an innovation company?

Wednesday, August 9, 2017

Creative Ideas in Economic Action Part I

Creative action will always be introduced by creative idea. To understand what creative idea and how the process it, learn this material as follows.

Creative Idea

The children raise their hands to express creative ideas. (
How is your class situation? Are you creative enough to give response of every problems and challenges asked by your teacher? Do you often express creative idea in front of class? As a student, you should always have creative idea.

What is the meaning of creative idea? According to General Indonesian Dictionary (W.J.S. Poerwadarminta) print V, page 526, creative is having energy or ability to create something. Creative idea is idea to produce creativity. Generally, creative idea is connected with the invention of science field, technology, health (medicine), literature, and the others. However, creative, idea is not only limited in big invention. Creative idea is to produce better new way to do something.

a. A family with low income has a plan to enroll his child to university.
b. A family has a plan to renovate their graceless house becomes a beautiful house.

Creative idea is not monopoly of the genius; it does not belong only to the supper-intelligent people. Each person can have creative ideas. Creative idea is not talent or congenital. Creative idea can be trained and developed to everyone, it depends on his/her will. Creative idea has to be a realized in creative action to obtain the result. People who have creative idea and can realize it in action to produce something is called creative person. Do you want to be a creative person? Some of the following can help you to have a creative thinking (a creative idea).

1. Believe that Something can be Done

If you believe that, something you can be done by yourself, it certain that your mind look for the way to do so. In this case, the words such as 'impossible', 'will not succeed', 'can not be done', and 'no use to try', have to wipe out from your mind.

2. Leave a Habit of Crippling Mind

Do not let your mind becomes passive. Try to find new idea! Make a trial or experiment! Be active (energetic) and progressive in everything you can do!

3. Try to Work Better

Every day, ask yourself, "How can I work better?" thus, you will improve your way of work. There is no limit to improve our performance. Something good can be arranged in order to better and a better thing can be increased much more.

4. Try to Work More

Being accustomed to ask you, "How can I work more?" such question will encourage you to complete the work as much as possible. In other words, it will increase the quantity of work.

5. Ready to Ask and Listen

By asking and listening to positive suggestion from others, you will find object to think and make creative action.

Creative ideas often arise and vanish shortly before it becomes creative action. Therefore, the creative idea must always be kept on and developed by the following three ways.
  • Write your creative ideas in a book or an agenda.
  • Review your creative ideas. If one of them is not creative, remove it from your mind.
  • Improve your creative ideas with other ideas or information from some literature.
You want to plant some mini-jack fruit trees in yard. Find some books about how to plant mini jack-fruit trees. From the books you will know all information about the right time to plant, to water and to give proper fertilizer, for example NPK.

Creative Process

Creative thinking by strong will can encourage the creative action (
Creative process take place in these following situations.

Creative person is always active and progressive. If you want to be a creative teenager, you need to go through some of these following processes.

1. Creative Thinking

Creative action must be preceded by creative thinking. Without having creative mind, it is impossible for someone to do creative action, because creative action is manifestation of creative mind. If creative mind is considered as theory, creative action is the practice.

2. Strong Will Motivation

Strong will is the main power for creative mind, in order to be creative action. In other words, we can say that creative mind is impossible to be manifested as creative action without strong will. Besides, creative mind is useless if it is not realized in creative action. Creative mind without being realized in creative action is merely pseudo fantasy.

3. Visualization of Project Plan

Visualization is expression of an idea (mind) in handwritings, pictures, graphs, maps, and so forth. It can be said, that visualization is written plan.

4. Determining the Purpose of Creation

It is necessary to determine the clear purpose of the creation. It is about what you want to reach with that creation.

5. Preparation of Equipment

To produce a good creativity, it is necessary to prepare some equipment carefully.

6. Avoid Habit of Postponing Something

When you have creative idea and strong will, and you have determined the purpose of the idea, write the plan and prepare all equipment. Next, start working immediately to create something useful. Do not delay the work.

Tuesday, August 8, 2017

Cooperatives II


It is the main pillar of the Indonesian economy. It has therefore played an important role within.

Definition of Cooperative

The article 33 of the Constitution of 1945 contains a message for not to establish only the individual welfare but mainly the social welfare. To reach its goal therefore the cooperative is established.

The definition of cooperative is stated on the Cooperative Act that is in the article 1 subsection 1 of the Law of No. 25/1992 concerning the cooperative states as the follows.

"The cooperative is a corporation comprises persons or corporations based on its principle as the social movement concerning kinship principles."

The Base of Cooperatives

There are two kinds of the base of cooperative namely Pancasila (the five basic principles of the Republic of Indonesia) and the Constitution of 19945.
  1. Pancasila is the ideal base of the cooperatives. Therefore, its activities must have been based on the moral principles of Pancasila.
  2. The constitution of 2945 is the structural base of the cooperatives. It means that the cooperatives are a part of the national economic structures based on the article 33 subsection 1 of Constitution of 1945.

The Principle of Cooperatives

It belong to a corporations supported by kinship principles. All activities within are done by its members for the purpose of the joint welfare and truth.

The Purpose of Cooperatives.

These purpose are stated on the Cooperative Act as the follows
  1. improving its members welfare;
  2. improving social welfare;
  3. building foundations of the national economy.

The Roles and the Functions of Cooperatives within the Indonesian Society

The cooperative plays roles as the social economic movements and the main pillar of the national economy. These roles and functions are stated on the Law of Number 25/ 1992 (UU No. 25 Tahun 1992) as the follows.
  1. It is movement for generally establishing and developing economic skills of its members and the public society. There being of cooperative, its members and the society are capable of improving their welfares.
  2. It plays a role in improving the quality of the society lives.
  3. It supports the social economy as the principles of the national economic power.
  4. It develops and establishes the national economy based on the basis of kinship principles and the economic democracy.
READ: Cooperative 

The Establishment of Cooperatives

There are some requirements for either the primary cooperative or the secondary one as the follows.
  1. The primary cooperative is established by at least of 20 person while the secondary one is established by at least of three primary cooperative.
  2. It must be located in Indonesia.
  3. It is established with articles of incorporation's concerning it statutes.

Kinds of Cooperatives

Based on the same activities and the economic interests of its members, these following are some kinds of cooperatives.
  1. The credit cooperatives (Koperasi Simpan Pinjam) manage credit loans business.
  2. The consumer cooperatives manage stores business.
  3. The producer cooperatives manage production and marketing business.
  4. The marketing cooperatives manage the distribution of production demands of their members and also the marketing sales of their members products.
  5. The service cooperatives manage the service business.
Moreover, there are also multipurpose cooperative which manage various business activities of its members. This kind of cooperatives is well-known as the Rural Unit of Cooperative (KUD).

It is an economic development center in rural areas. Its members comprise of farmer, fishermen, handcrafters, and other groups of rural societies. Therefore, it plays an important role within the rural economy. This is the smallest unit of economic activities within the Indonesian economy.

The Organization Equipment's of Cooperatives

The equipment's of cooperative consist of general meeting, managers, and supervisors.
1) The general meeting is the highest authority within the cooperatives.
2) The managers are elected by the general meeting. Their duties are as the following:
  • managing the cooperatives business;
  • proposing work schedules, revenue budget plans, and the cooperative budgets;
  • presenting financial statements and being in charge of undergoing their duties.
3) The Supervisors are elected by the general meeting. Their main duties are controlling the undergoing duties and management and making reports.

The Capital Sources of Cooperatives.

The capitals consist of own capitals and the capital loans.
1) Own capitals are derived from some basic contributions, obligatory deposits, reserve funds, and some donations.
  • The basic contributions are paid in when the members first registered.
  • The obligatory deposits are paid on some certain periods.
  • The reserve funds are part of the saved Business Revenue Remnants (SHU).
  • The donations are capital donations from other parties.
2) Capital loans are collected from the cooperative members, other cooperatives, banks, and other legal sources.

Business Revenue Remnants (SHU)

They are the profits earned by the cooperatives. They are used for
  1. reserve funds for example 20% for instance;
  2. the members for example 50% based on their dedication towards the cooperatives;
  3. the cooperative education funds for example 15%;
  4. other needs which have been decided in the general meeting for example 15%.

The Primary Roles of Cooperatives as the Corporations

As they have been generally described in the previous, the roles and the functions of cooperatives can be concluded from the determinations below.
  1. Being the corporations, cooperatives manage their companies business. Therefore they also produce goods and service for the social welfares.
  2. Being the social economic movement and the main pillar of the national economy the cooperatives should be able to develop the people's potentials.
On the other hand, they also play an important in recruiting large employees.

Tuesday, July 11, 2017

Indonesia Economic System

Indonesia Economic System
Each state's economic system depends on the state own view or politic concept. Some countries follow economic system of free fight liberalism. Such a system runs free competition in of the economic system. People are free to compete in economic in economic system although they encounter many inflicted losses. Those who become the leader of economic activity will control the state's economic life. As the consequence, some people do much exploitation to others. Economic system of free fight liberalism is generally applied in liberal countries.

Moreover, some other countries follows economic system of etatism (it refers to the socialist system). In such a system, the government take a control the state's economy. With its apparatus, the government insists and extinguishes the potency and creation capacity of the units of economy beside the government's sector. The economic system of etatism is usually applied in communist countries.

Furthermore, another country focuses its economic power on certain groups. These groups have the monopoly right in economic activity. Indonesia had ever been carried out such an economic system in the era of VOC.

How is the condition of Indonesia economic system nowadays?

Indonesia is built and develop based on Pancasila and 1945 Constitution. Therefore, all the government's and the people's activities in a country and society should be based on Pancasila and 1945 Constitution.

Indonesian economic system follows the democracy of economic principles. Democracy of economy is implied in the fifth principle of Pancasila. The principle states that people have to have a chance to benefit from the state's prosperity and wealthy evenly. Therefore, people must enact their roles in the economic system actively to obtain therm. Furthermore, it contains the nation's aspiration or concept to gain equitable and prosperous people. Thus, Pancasila holds the position as the ideological base of Indonesia economic system.

Indonesian economic system has the democracy of economic principles. It is asserted more in 1945 Constitution with the amendment and alteration by People's Consultative Council (MPR). The alteration of section 33, 1945 Constitution consists of five clauses. Four clauses are the principles of Indonesian economy, those are follows.
  1. Economy is arranged as the collective venture based on family relationship.
  2. The significant branches of production which control people livelihood is under the government's controls.
  3. The land, water, and natural wealthy will be controlled by the government to use for the large people's prosperity.
  4. National economy is carried out based on democracy of economy under the principles of collectiveness, efficiency, injustice, sustainable, environmental concept, autonomous, and to keep the balance of national economic development and unity.
In accordance with 1945 Constitution in section 33, the economic activity is developed by cooperation. Cooperation is the most appropriate economic system with the principles of family relationship. Besides, cooperation support fully the low-class society.

Read: Cooperative

The significant branches of production which related to people livelihood is under the government's controls. The management of the branches of production is hold by BUMN. such corporation are needed mostly by people. The corporation's control and use are arranged by the state on a purpose that all elements of society can utilize them in an effective way.

The land, water, and natural wealthy within refers to the natural resources. The natural resources need to explore, to cultivate, and to use for people's prosperity. Therefore, the government takes a control on them. But, it does not mean the government possesses and cultivates all the resources. Some private companies have the opportunities to explorer and to cultivate them. While, the government manages, conducts, and guides the activity on a purpose that people or private companies take participation to reach the nation's prosperity.

In Indonesian economic system, the government and people, either low-class society or the entrepreneurs, reach together the nation's prosperity actively. Furthermore, the government has a role to make a plan, to conduct, and to guide the use the state resources. Thus, the government, the private entrepreneurs, and people make a solid cooperation to each other. That's all the significant meaning of Indonesia economy.

The economic system which involves the government, the private entrepreneurs, and people to assists each other in economic democracy is called democracy of economy. Democracy of economy is asserted in section 33, clause 4 of 1945 Constitution.

Sunday, July 9, 2017


Cooperation / cooperative
In Indonesian economic system, cooperative becomes an appropriate corporation to Indonesian nature and identity. What are the roles, the type, and the use of cooperation in Indonesia? What are the principle of cooperation to be appropriate corporation to Indonesian identity? Examine the following explanation!

The Role of Cooperation in Indonesian Economy

The role of cooperation in Indonesian economy is very significant because of
  1. cooperation is based on the family relationship principles and it tends to be appropriate to Indonesian identity;
  2. cooperation is appropriate corporation to low-class society. While, high-class society give the supporting aids to develop it.
The role of cooperation in Indonesia economy is stated in the explanation section 33 of 1945 Constitution. This section states that cooperation is an appropriate form of corporation to gain society's prosperity. By the explanation in the section 33 of 1945 Constitution, cooperation holds the position as the pillar of national economy and becomes an integrated part in the system of Indonesian economy. Laws No. 25 of 1992 about cooperation states that cooperation has a definition as follows.

Cooperation is a corporation of which the members tend to person by person or corporation of cooperation of which the activity is run based in on the principle of cooperation. Cooperation becomes also as the move of people economy based on the principle of family relationship.

The Types of Cooperation

The types of cooperation covers credit cooperation, consumers, producers, marketing, and services.

The Benefit of Cooperation

The benefit of cooperation can be viewed from two sectors; those are the use of cooperation in the sector of economy and the use of cooperation in the sector of social.
1) The use of cooperation in the sector of economy as follows.
  • To increase the income of the cooperation's members. The profit of cooperation will be returned to the members according to their service and participation.
  • To offer the cheap goods and services to consumers that goods sold at the stores in order that those who includes as the poor cooperation members are able to consume them.
  • To grow the motif to attempt in humaneness. In running the production, the cooperation does not only obtain a profit, but also serves the cooperation members necessities.
  • To grow the honesty and the open manner in the cooperation management. Each member has the right to be a cooperation board and to know about the cooperation monetary report.
  • To give a training for society about how to spend their income in an effective way and how to use them economically.
2) The benefit of cooperation in the sector of social as follows.
  • To stimulate the realization of society's peaceful life.
  • To stimulate the realization of the human rules which builds on the principles of the family relationship, not on the materialistic connectivity.
  • To educate the members of cooperation to have the spirit of cooperating and family relationship.

The Principles of Cooperation

The principles of economy are stated in Laws No. 25 of 1992 about cooperation. The principles are explained as follows.
  1. Cooperation runs the principles of cooperation. In this case, the cooperation membership refers to the voluntary and open membership. Cooperation is managed in a democratic way. Besides, cooperation distributes the rest of activity output fairly and in proportion to each member's endeavor. It gives a limited recompense towards the capital and autonomy.
  2. Cooperation develops the production by carrying out the principles of cooperation education and cooperation between cooperation.
These principles set cooperation to have functions as a corporation and as the activation of people's economy in the social nature. The principles of economy is elaborated in the following details.
  1. The cooperation membership refers to the voluntary membership. It means, people cannot be compelled to be a cooperation member. A cooperation member can be resigned with the condition that is set in the base fiscal. The cooperation membership refers to open the membership. It means, people have a right to be a cooperation member. Cooperation does not differentiate those who would like to be the cooperation members.
  2. Cooperation management is run under democratic way. It means, the management is carried out based on the members intention and decision by cooperation members meeting. The cooperation member meeting becomes the highest power holder in cooperation.
  3. The profit distribution or the rest of output activity (SHU/Sisa Hasil Usaha)) is not based only on the members capital, but it is based on members service to cooperation.
  4. Each member pays his capital to cooperation. As a capital owner, each member will get his recompense properly. The amount of the recompense is limited. It means, the recompense is not greater than the bank interest.
  5. Cooperation follows the principle of autonomy.
  6. Education of cooperation tends to improve the cooperation members abilities, skills, and knowledge.
  7. Cooperation of between cooperation tends to strengthen solidarity between cooperation to realize the purpose of cooperation.