CSIS: The Government Has Not Recognized That The Economic Situation Is Not OK

JAKARTA - The Center for Strategic and International Studies or CSIS Indonesia assesses that the government has not responded to the root causes of the demonstrations that have occurred in various regions recently.

According to the Executive Director of CSIS Indonesia, Yose Rizal Damuri, the series of demonstrations was triggered by a combination of increasing economic burdens and formal political processes that had not absorbed the aspirations of the people.

Yose said the government tends to see the situation as a mere political turmoil that requires quick handling.

"But there is no visible acknowledgment that the condition of Indonesia's welfare and economy is not doing well, there has also been no visible effort to solve various fundamental problems," said Yose in a public discussion entitled "Wake up calls from the streets: Our Democracy and Economic Tests" online, Tuesday, September 2.

Meanwhile, Senior Researcher of the Ministry of Economics CSIS Deni Friawan added that one of the main causes of recent demonstrations is the crisis of trust in the government due to the collapse of fiscal legitimacy.

On the one hand, the people are asked to pay taxes and receive the efficiency carried out by the government. But on the other hand, the government seems to be wasting by increasing the number of ministries and institutions, allowing concurrent positions in state-owned enterprises (BUMN) and increasing salaries and allowances for members of the House of Representatives (DPR).

"Unfortunately, the sense of justice today has faded because of the contradiction of policies carried out by the government," he said.

Deni said that several indicators that show that the economy in the country is not doing well. One of these indicators is the increase in the price of strategic food commodities. According to him, although the inflation rate in general is still low, the current price of rice is in the range of Rp. 14,000-Rp. 18,000 per liter.

In terms of employment, although the unemployment rate looks low, the number of unemployed actually increases and the quality of work is inadequate.

Most of the work is in the informal sector, with stagnant income not balanced with rising cost of living.

Based on data from the Central Statistics Agency (BPS), as of February 2025, the number of people working in the informal sector was recorded at 86.58 million people or equivalent to 59.40 percent.

"The problem in Indonesia is actually not just that people work or don't work, but the problem is that today quality work or generating decent income is very limited," he explained.