Wednesday, September 8, 2010

The economic impact of going home Lebaran

Flows back and forth (and back) for one week before and after Idulfitri already a yearly ritual. The virtue of the holy month of Ramadan for Indonesian Muslims are truly extraordinary.

Not only makes the 'atmosphere' so solemn worship to 'pierce the throne seven layers of heaven, but also encourage economic impact on the state of the earth so violently in the archipelago.

The problem is, whether the economic dimension mudik impact multiplier (multiplier), which means for the economy and rural areas? Or going home is only the phenomenon of "seasonal" a moment which caused the flow of people and goods rose slightly compared with other months?

Purwakananta Arifin, Director Dhuafa Wallet, estimated USD. 80.9 trillion flowing from the travelers while doing back and forth. When the number of travelers to reach 56% of the population of the city, the funds of Rp. 80.9 trillion will flow through the transportation used by travelers, generosity to family, and for tourism.

I try to check the data of Bank Indonesia funds back and forth about this. The amount of funds flow back and forth at least reflected by the non-cash payment transactions through RTGS transfer (real time gross settlement) from city X to city Y, or data Kartal withdrawals in each office in the area of BI. The use of RTGS still dominate the non-cash payments of more than nominal value from 95% of the total transaction value nontunai. RTGS system users most often committed by customers of the bank for the amount of the transaction from outside Jakarta to Jakarta. RTGS transaction value in the second quarter 2010 report in DKI Jakarta alone reached Rp82, 55 trillion per day and as many as 22 247 in terms of volume of transactions per day.

In Central Java, which is one forth the objectives noted an interesting flow of funds. Currency flow development in second quarter-2010 in Central Java (Semarang KBI, KBI Solo and Purwokerto KBI) experienced a net inflow (inflow or the flow of money coming in is greater than the outflow or the flow of money out), with a total net inflow of Rp3, 29 trillion.
When a net positive inflow means a lot of money coming into the area. In the third and fourth quarter impact of causing the amount of net inflow forth will be higher. 

Data in DKI Jakarta and Central Java is simply estimate the amount of flow of funds into and out of an area. Clearly, all businesses ranging from small and medium businesses (such as food, beverages, apparel, equipment service, rental car) to large businesses (such as transportation, telecommunications, motor vehicles, insurance, banking) experience spikes in demand since the beginning of Ramadan.

Economic impact on the state is always reached a peak at the end of Ramadan when there is activity going home to celebrate Idul Fitri Idulfitri in their respective homelands. According to data from Indonesia and the Ministry of Transportation Community Transportation, travelers in the year 2010 is estimated to reach 17 million people.

This amount is almost equal to the total population of the continent of Australia which reached 20 million. Of the total 17 million travelers, is expected to use different transportation modes: 7.2 million motorbikes, 2.6 million car users, 1.97 million users of the aircraft, ships 3 million users, and four million users of railway and public buses. 

Not surprisingly, the estimated population can Lebaran big cities most only live for around 20% -30% of the population compared with normal days.

The phenomenon of going home is the fruit of urbanization and agglomeration economies. Urban can occur in the process of economic development of Indonesia. Model of development that could affect the concentration of city workers and residents, especially in metropolitan cities and large become the center of government, industry and trade.

These cities are transformed into extraordinary magnet for labor, industry, services, shopping malls, and corporations. Centripetal effect of agglomerate strength caused economic activity is geographically concentrated in metropolitan cities and big. In 2000, the percentage of population residing in urban (read: urban), Indonesia reached 42%. In 2015, the urbanization rate is estimated at 57.8%.

The flow of funds that brought the travelers must have if allocated to a productive business that can have a tremendous multiplier effect. In addition to funds for travel costs absorbed back home, in the area of destination travelers, mostly rural, also disbursed funds involved. With the existence of such back and forth at least the rural economy can be stretched for a moment.

Had the money that must be held by their respective travelers average approximately five million rupiah, and the number of travelers are assumed to approximately 17 million people, the money supply was around Rp 85 trillion. This does not include RTGS transactions. Just imagine, if the travelers with the intention of setting aside funds for charity, infaq, charity (ZIS) at the minimum of USD 100 thousand as of travelers, it collected at least Rp 1.7 trillion. This amount can be used to establish a regional credit guarantee companies (Jamkrida) who just need an initial capital of USD 50 billion or so of thousands of scholarships to finance students.

The amount of funds that are spread in a period stretching back and forth not only the rural economy, but also boost the urban economy. This fact caused by a period of Lebaran, the consumptive nature of society has increased so the rate of spending the funds can radiate in all directions.

To prove the success of life in the city, the travelers usually buy motorcycles, TVs, refrigerators, mobile phones, Play Station, muslim clothes, shoes and other. Giving money to families in rural areas often also allocated to purchase these items. 

It's a shame if the flow of funds back and forth from being used for local development. Or did we just watch and be a contributing travelers jam roads? The purpose is to ward off fast (Sura 2: 183).

One feature of the righteous are those who spend (freely) whether in prosperity or in adversity (Sura 3: 134). Well .... let's take advantage of the momentum back and forth as well as to develop our homeland economy.


By Mudrajad Kuncoro
Professor & Head of the Department of Economics, Faculty of Economics and Business UGM
Source: Bisnis Indonesia Online
 

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