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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.
- Economy is arranged as the collective venture based on family relationship.
- The significant branches of production which control people livelihood is under the government's controls.
- The land, water, and natural wealthy will be controlled by the government to use for the large people's prosperity.
- 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.
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.