Indonesia Economic System Analysis

The Application of the Market Model in Indonesia’s Economy

INTRODUCTION

As known, Indonesia have Pancasila and UUD 1945 as their foundation. Therefore, all forms of community, state, and economy system activities in Indonesia must be based on Pancasila and UUD 1945. The system of Indonesia’s economy which based upon Pancasila and UUD 1945 is arranged to create democracy economic and used as the basis of economic development. The Indonesia’s economic system which based on Pancasila and UUD 1945 called democracy economic system. Thus, the democracy economic system can be defined as the national economic system which is one of the results of Pancasila and UUD 1945 philosophy that evenly distributed from, by and for the citizen under the leadership

We can see in democracy economic system, the branches of production which is important for the country and dominated public life are controlled by the state. The earth, water and natural resources controlled by the state and will be used optimally for prosperity to the people. Citizens are free to choose desired work and have the right to work and decent livelihood. Belonging to individual right acknowledged and its use should not be contrary with the community interests. Besides had the positive characteristic, a democracy economic system also had things to avoid. A system of free flight liberalism or free competition system that is mutually crushing and could promoted the exploitation of people and other country that it could create national economic structure weakness. Etatism system, where the state with their national economic apparatus are the dominant and urged and lethal potential and its creation the economy out of the country. Unhealthy competition and economic power focused in a group in the form of monopoly which hurts the

Capitalist economic system

4. Sosialist economic system

5. Mixed economic system

Traditional economic system Traditional economic system is the system which is applied by the traditional society from generation to generation with rely only on nature and labor. In this system, economic arrange to adjusted according to a pattern of tradition, which is usually the majority of related to control over the land as a source of important or the only source of economy ( cornelis rintuh , 1995 ). In traditional economic system the production techniques learned in hereditary and simple, only used a few capital and still using exchange system or called barter. There are some advantages in this system like there is no unhealthy competition because there is no individuality between each others and society could feel safe. But the production quantity and quality are still weak because of the limited production factors and techniques. Currently there is no longer the state that adheres to traditional economic system, but in some isolated areas like in badui and bugis still use the system is in their daily life.

Liberalist economic