13 Sep DEKA and GlobeScan Radar Survey
We are proud to announce that DEKA is the Indonesian partner for BBC World Service Poll. This annual survey was conducted in 16 countries all over the world and covering various topics, from Global Issues to Consumer Segmentation.
In this opportunity, we would like to share the result and analysis about Current Global Issues. The poll was held in 12-26 March 2016 with face-to-face methodology to 1,000 respondents. To get urban citizen’s opinion, we conducted the poll in Jakarta, Bandung, Surabaya, Medan and Makassar, representing 27% of the national adult population.
In tracking the global issues, we found that economic concerns and unemployment are the-top-mind national problems in many countries, including Indonesia. However, immigration has surged to the top of the agenda in Germany and the UK in the midst of Syrian refugee crisis and prior to the Brexit vote. As for the most important top-of-mind global problems, war and terrorism are the industrialized countries’ biggest concerns, while the emerging markets are more worry about economic problems.
Environmentally speaking, water issues such as pollution in the Americas and shortages in Asia and Africa are seen as the most serious environmental problem in many of the countries polled. Air pollution is the top issue in China and Russia, while climate change is specifically named in Chile, Israel and Germany. Going into technology, confidence that new technology will solve the problem of climate change without any modification of human behaviors is growing globally, but this increase is led by sentiment in emerging markets. People in industrialized countries are less likely to believe that technology is the sole climate solution, especially in Germany, South Korea, the UK, Canada and the USA.
Moving on to the next topics, we surveyed numbers of institutions to find out their public trust index. Institutions listed on the survey are science/academic institutions, NGOs, large charitable foundations, UN, national companies, national government, global companies and press/media.
Throughout this survey, we found out that the trust index remains low in 2016. While 2015 suggested a general recovery in public trust from low levels reported in 2014, trust remains volatile. There is again a decline in global trust in institutions with significantly decreased trust in government and business.
From the average of 25 countries, trust is highest in scientific/academic institutions, followed by NGOs and charitable foundations. The global public is less trusting of national government, global companies and press/media. National companies are somewhat more trusted than those operating globally.
Respondents in emerging markets have higher trust across institutions than those in industrialized markets; however, out of all institutions, they are least likely to trust global companies. Zooming into each region, trust in global business is highest in Africa and Asia, but middling to low elsewhere. Since 2015, there have been significant upward and downward shifts in trust in global business among key emerging markets. The most dramatic increase of public trust in global companies is in Brazil, where government instability may be causing people to look to other institutions to operate in the best interest of society. Trust in global companies has significantly declines in important Asian countries such as Indonesia, China, India and Pakistan.
Talking further about the trust index in Indonesia, we have experienced increased trust in National Government. The positivity regarding the national government goes in-line with the excitement for the current government cabinet and its new regulations. On the contrary, Indonesia experienced decreased trust in NGOs.
Seeing the survey results and connecting them with the actual condition 2016, it is very reasonable why Indonesian public have their concern on the economic problems. Hereby we are going to give our perspective on how we see things are going on, regarding the economic and social condition here in Indonesia.
Economic growth drivers lies on for components; consumption, investment, government spending and export import activities. As the fourth biggest nation in the world, Indonesia surely has a huge potential to thrive. In 2016, the two main drivers are government spending and household consumption. Back in the first quarter of 2016, it is believed that efforts to raise people’s purchasing power and household consumption will be the key to push for higher economic growth in 2016. However, the fact is not that simple. Household spending has slowed down in Q1 2016. Slowing household spending may seem at odds with labor market trends and rising consumer confidence. So, why are consumers not spending more? First, slowing economic activity is likely weighing on consumers. Second, BI’s rate cuts are yet to impact consumption, given that the pass-through to consumers has been far from perfect. In line with our survey result that Indonesia’s biggest national issue is economic problems, it seemed that Indonesia’s middle and higher classes are still somewhat hesitant to spend amid persistent global economic uncertainty.
The high number of population here in Indonesia has another effect besides making our market is big and attractive. On top the often discussed big middle class, we are also awarded with large numbers of productive age citizens. This large workforce certainly has to be supported with suitable working chances. Apart than today’s existing work fields, entrepreneurship also has to be empowered so the productivity can be channeled properly and thus reducing the concern of unemployment.
Moving to government spending, President Jokowi immediately stepped on the gas once 2016 has started. As if we are racing against time, numbers of infrastructure projects started in cities across Indonesia. With his program to spread infrastructure development outside Java, it is expected that Indonesia can attract more investments in order to achieve the targeted growth. Focusing on infrastructure meaning there are adjustments in state budget allocation. Budget cuts are applied in ministries and governing bodies to ensure the main purpose is achieved.
Export and import activities needs to be boost to support our country’s economic growth. Having decreased export due to declined global oil price and over supply globally, our commodities prices are also experienced downfall. Knowing the fact that we cannot depend on global trading, bigger investments are highly needed. By having investors creating business in Indonesia, several multiplier effects are expected. The first effect is tax absorption from companies and employees. The second is technology spillover. With many technology experts working in Indonesia, there will be transfer knowledge to enrich Indonesian minds. The third is deployment of manpower, which also expected to be the solution of unemployment concern in Indonesia.
Seeing the current condition and things expected to drive our economy growth, higher investment is the solution. In World Bank’s Ease of Doing Business index, Indonesia ranked 109 while our neighboring country Singapore ranked first. Realizing that fact, Indonesian government is doing several steps to attract more investors to come. Sadly famous with our complicated regulation in setting up business, the government decided to have deregulations by cutting up investment permits. Bureaucratic reshuffle also done by the rulers to make sure there is no more power misuse. To reduce extortion or illegal charges, our government gives more empowerment to KPK (Corruption Eradication Commission). This is also due to restore our image in the global eyes and in line with our survey results that stated that Indonesian public have gained more trust in national government. Also to make the business easier in our country, President Jokowi pulls technocrats to join his cabinet. With improvements made, it is targeted that Indonesia could rank 40th in the Ease of Doing Business index next year.