National emblem of Indonesia Garuda Pancasila

Pancasila economics ( id, Ekonomi Pancasila), also known as "Indonesian populist economics" ( id, Ekonomi kerakyatan Indonesia), is an

economic system An economic system, or economic order, is a system of Production (economics), production, resource allocation and Distribution (economics), distribution of goods and services within a society or a given geographic area. It includes the combinati ...

which aims to reflect the five principles of Pancasila. The term "Pancasila economy" first appeared in an article by

Emil Salim Emil Salim (born in Lahat, South Sumatra, Indonesia, 8 June 1930) is an Indonesian economist and former politician. Born of Minangkabau parents, both from the village of Koto Gadang in West Sumatra. His uncle is Agus Salim, one of the founding ...

in 1967.

Mubyarto Mubyarto (3 September 1938 – 24 May 2005) was an Indonesian economist. He was born in Sleman, in Yogyakarta, and became a professor of economics at Gadjah Mada University in Yogyakarta specialising in agricultural economics. He frequently ...

is one of the staunchest of the Pancasila economic theorists. In essence, a Pancasila economy is a system that tries to avoid pendulum-like swings from one extreme (a

free market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ar ...

, known in Indonesia as ''free fight liberalism'') to the other (

state socialism State socialism is a political and economic ideology within the socialist movement that advocates state ownership of the means of production. This is intended either as a temporary measure, or as a characteristic of socialism in the transition fr ...

, especially of the Soviet kind). In simple terms, a "Pancasila economy" can be described as a market economic system with government control or a ''controlled market economy''. A ''Pancasila economy'' can be considered an example of a mixed economy or a ''

third way The Third Way is a centrist political position that attempts to reconcile right-wing and left-wing politics by advocating a varying synthesis of centre-right economic policies with centre-left social policies. The Third Way was born from a ...

'' economic system. A Pancasila economy is seen as a counterbalance to a neoclassical approach promoting individualism and free markets that is adapted the values of Indonesian society, including religious values, culture, customs and norms. The concept of Pancasila economics was first conceived in the early days of the New Order as part of the regime's

De-Sukarnoization De-Sukarnoization, also spelled de-Soekarnoization, was a purging policy that existed in Indonesia from the transition to the New Order in 1966 up to the beginning of the Post-Suharto era in Indonesia, Reformation era in 1998, in which President S ...

and "cleansing of Communist,

30 September Movement The Thirtieth of September Movement ( id, Gerakan 30 September, abbreviated as G30S, also known by the acronym Gestapu for ''Gerakan September Tiga Puluh'', Thirtieth of September Movement) was a self-proclaimed organization of Indonesian Na ...

and

PKI PKI may refer to: * Partai Komunis Indonesia, the Communist Party of Indonesia * Peter Kiewit Institute The Peter Kiewit Institute is a facility in Omaha, Nebraska, United States which houses academic programs from the University of Nebraska� ...

remnants from Pancasila" which was aimed for what the regime claim as a "return into a pure, consequential Pancasila".

Characteristics

The Pancasila economic system is based on Article 33 of the Indonesian constitution. The article calls for "collective enterprises under the principle of 'familyism' ( id, kekeluargaan)", which is meant to be implemented through

cooperatives A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...

, the state control of the

commanding heights of the economy In Marxian economics, the "commanding heights of the economy" are certain strategically important sectors of private industry. Some examples of industries considered to be part of the commanding heights include public utilities, natural resources, ...

and of land and resources. The five basic characteristics of the economic concept of Pancasila are: * Cooperative development * Commitment to equity * Nationalist economic policy * Centralized planning * Decentralized implementation The Pancasila economic system is claimed to have superiority above liberalism. Theorists claim it as "an economic system for the common people". Pancasila economic theorists also argue the system's superiority over socialism, which they claim do not recognize "individual ownership" ( id, kepemilikan pribadi; the term "pribadi" is an Indonesian homonym for both "private" and "personal"). There has been much discussion about the need for a Pancasila economic system in economic development policy in Indonesia since Indonesian independence in 1945. The principles of a Pancasila economy were mandated by the Indonesian Constitution in 1945. These include

humanitarianism Humanitarianism is an active belief in the value of human life, whereby humans practice benevolent treatment and provide assistance to other humans to reduce suffering and improve the conditions of humanity for moral, altruistic, and emotional ...

economic nationalism Economic nationalism, also called economic patriotism and economic populism, is an ideology that favors state interventionism over other market mechanisms, with policies such as domestic control of the economy, labor, and capital formation, incl ...

economic democracy Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbour ...

and

justice Justice, in its broadest sense, is the principle that people receive that which they deserve, with the interpretation of what then constitutes "deserving" being impacted upon by numerous fields, with many differing viewpoints and perspective ...

Characteristics

See also

References

Further reading