The Implementation Of Sufficient Economy : An Adaptive Economic System

Al Dirga Akbarsadhana

Department of Water Resources Engineering, Faculty of Engineering, University of

Brawijaya, Indonesia

Economy is one of the most fundamental thing in developing a country. Economy is

fundamental because it included in a major factor for determining the development of a
country. It affected the wealth of a country and the people who live in it and also to determine
the level of prosperity of the country. Positive economic growth will bring a tremendous
impact to the welfare of the people which components such as education, health, and others
can grow linearly, but when the economic collapse it will also bring a big negative impact to
the wholeness of the country and we have to keep in mind that when the destruction has
reached its lowest point, it will be difficult for a country to rise like before. Over the past
decade, the world has witnessed rapid economic growth. This growth has put enormous
pressure on the environment in the form of water shortage, air and water pollution, depletion
of natural resources, biodiversity loss, and land degradation. Recent studies show that we are
already exceeding the Earth’s ability to support our lifestyles, and have been doing so for
approximately twenty years (Amit Kumar and others, 2011)

Figure 1. World Population Is Projected To Reach 9 Billion By 2050; Unsustainable At A

Middle Income Level (Global Average).

Source : International Journal Of Management & Business Studies (2011)

Sustainable development itself has a tenet to fulfill the needs of the present without
sacrificing the needs of future generations. Sustainable development is not just focused on
environmental issues, but also included in three sectors, such as economic development,
social development, and environmental development (Akhmad Fauzi, 2014). Therefore in
this era of globalization, a country will face difficulty in developing and to compete in the
world of economy, especially when adopting the old concept, so we need a new adaptive
system that can cover those three development sectors. The Sufficiency Economy deserve to
get an attention because of its tenacity and development that has been done on the system if
we link it with the description above.

Figure 2. One of Sustainable Development Model

Source : Akhmad Fauzi (2014)

King Bhumibol Adulyadej develop The Philosophy of Sufficient Economy for

decades. This philosophy is not about how the economic system works, but more on how to
make the right economic decisions. This economic philosophy has three principles, those are
reasonableness, moderation, and self-immunity. Reasonableness tenet emphasize on
balancing the society’s wisdom and era of globalization to create a rational decision. This
principle is expected to produce appropriate policies for the development of the country,
because the result of the economic decisions are not classified as a quick move, but the long
term impact. The rational economic decisions should be done gradually (step by step) and
start from the smallest to the largest units. It goes from individual and family level, the
community or a larger organization, and at the national level. The rationality must also go
along with morality and good community mental, therefore the tenet of moderation is needed.
Moderation means, with the implementation of this philosophy, the community is expected to
take economic decisions with knowledge of their potential and keep themselves away from
too extravagantly and too thriftily lifestyle. Society should be able to sort out what kind of
things they needed and what are not, also to think about the impact of what will happen to the
surrounding environment so they can choose the best products to be consumed. The third is
self-immunity, the economic decisions must be accompanied by risk management. Taking an
economic decision must be accompanied by analyzes. The analyzes that have been made
should estimate the long-term effects as well as it will be good or bad for society. Based on
these three tenets, the advantage of this philosophy is the idea to produce everything
sufficiently to protect the environment and keep the amount of natural resources. Right
targeted production and directed to the internal public consumption first will be done to fulfill
the food that the community needed. If the internal requirements are fulfilled then the excess
or the rest will be exported out. Prasopchoke Mongsawad (2010) also stated that with this
philosophy mindset, people will be moderate, reasonable and self-immune, therefore, they
will not overexploit or abuse the environment or natural resources. They will embrace the
environment, conserve it for the future and live in harmony with nature.

Figure 3. Sufficiency Economy Philosophical Framework

Source : Prasopchoke Mongsawad (2010)

 Former Secretary-General of ASEAN, Dr Surin Pitsuwan, said that the Philosophy of
Sufficient Economy is one of the foundation for the establishment of AEC (ASEAN
Economic Community) 2015. The philosophy that emphasize on sufficiency is applied in
AEC 2015 with the slogan "caring and sharing society". It means that in the ASEAN
Economic Community in 2015 will not gouge each other and squandering natural resources.
Through this philosophy we learn about "self sufficiency" or can be called as “berdikari” in
the Indonesian vocabulary. The philosophy of self sufficiency economy can prevent investors
from exploiting natural resources and will lead to the sustainable development, also reduce
poverty gap. The main purpose of this system is not only to measure the economic
development based on GDP, but to minimize the economic gap (social inequality and poverty
gap) become a priority target.

Indonesia itself has taken a strong enough steps for sustainable development efforts.
At this time any company that operate in Indonesia must obey with the law and applicable
national standards, including some international standards in it. Moreover, some of the
policies issued by companies related with environmental and social aspects have been
through public consultation that involve NGO and government. For example, palm oil
plantation company refers to the standard of the Roundtable Sustainable Palm Oil (RSPO),
for the forestry sector refers to the international standard Forest Stewadership Council (FSC),
for metal and coal mining there is International Council on Metal and Mining (ICMM)
standard, and so many more policies or rules that must be followed by the companies for
sustainable development and environmental sustainability.

To implement or integrate The Philosophy of Sufficient Economy in Indonesia for

sustainable development, there are several challenges that must be faced. At this time the
practices of corruption, collusion, and nepotism are mostly done by state officials, although
the number is decreasing each year. However, these conditions strongly influence the
economic situation in the country so that the development is running very slowly.
Educational problems should get a deep attention indeed. Uneven education, incomplete
facilities in certain areas, as well as the difficulty of finding teachers who want to teach in
outlying areas are the root of the problem for all aspects, including economic development.
Unsolved education problem will widen the social gap because economy bring a big impact
on the national development. Consumptive lifestyle of society and the tendency to consume
imported goods is very contrary to the principle of Sufficient Economy’s philosophy. Poor
land use, changes of land use, as well as the exploitation of natural resources are also contrary
to philosophy. In implementing the philosophy of the Thai economic system in Indonesia, it
is necessary to adapt that take a long time because of the size of Indonesia, which is very
large and spacious, as well as the number of societies. The larger number of people then it
will cause the more difficult Philosophy of Sufficient Economy can be applied. Population’s
number will affect the effectiveness of philosophy in achieving one of its goal, fulfill food
needs of society.

Problems that happening in Indonesia are complex, but those do not mean there will
be no strategy that can be done to achieve economic sustainable development. The root of the
problems in Indonesia are closely related to the mentality. President of the Republic of
Indonesia, Jokowi Widodo (Jokowi), since he was selected has been promoted the mental
revolution slogan. Jokowi instill mental revolution starting from the most basic sectors and
main, education. Students in Indonesia started to learn anti-corruption education, character
education, and moral education. This is expected to improve morality of the nation's next
young generation and prevent problems that preclude the national development. Mental
revolution concept that has been brought by Jokowi actually goes linearly with the
application of Sufficient Economy. Economic democracy that adopted by Indonesia bring the
message of normative core of democratic economy, human rights, individuality, and
creativity of community members (Bob Widyahartono, 2011). According to the King’s
philosophy and Indonesia economic system, we have a conclusion that these two systems are
alike. One of the prove that Philosophy of Sufficient Economy is adaptive, even it can not be
fully injected into the economic system of Indonesia because of its size and problems in it,
but the philosophy can be integrated or modified so it will accordance to the conditions of the
Indonesia nation. Finally, when all the components in a nation already well planted with the
economic system or philosophy that adopted, government will have an optimal role and
society’s welfare can be fulfilled, so sustainable development can be achieved.
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