EKONOMIKA MAKRO TENTANG:

“ANALISIS STAGNASI PERTUMBUHAN EKONOMI DI LUAR

NEGERI DAN PENGARUHNYA TERHADAP
PEREKONOMIAN INDONESIA”

OLEH:
MOH. RIZAL D. PADE
931418085
KELAS A MANAJEMEN
FAKULTAS EKONOMI
2019
 JURNAL NASIONAL

1. TANTANGAN TURBULENSI EKONOMI GLOBAL TERHADAP EKONOMI POLITIK

INTERNASIONAL INDONESIA

1. PENDAHULUAN

Situasi ekonomi global dalam beberapa tahun ke depan diprediksi semakin sulit untuk
bangkit. Meski diprediksi meningkat akan tetapi peningkatannya tidak begitu signifikan dalam
mengatasi masalah ekonomi global. Setidaknya dalam mengatasi masalah ekonomi dengan
pertumbuhan, inflasi dan suku bunga yang rendah akan berlangsung stagnan dan dalam waktu yang
cukup lama seperti di negara-negara maju, atau yang lebih dikenal sebagai secular stagnation.
Melambatnya pertumbuhan ekonomi terutama setelah resesi ekonomi 2008 terus membawa
ekonomi global dalam ketidakpastian atau apa yang disebut sebagai Volatility, U certainly,
Complexity, Ambiguity (VUCA). Faktornya tidak hanya didasarkan pada ekonomi internasional akan
tetapi juga diakibatkan karena perubahan politik internasional, keamanan intenasional dan
geopolitik global.

Aspek ekonomi internasional seperti berakhirnya harga komoditas mahal (boom

commodity), nomalisasi ekonomi China dan pelambatan ekonomi Amerika Serikat membuat
perbaikan ekonomi global terus tertekan. Sepanjang tahun 2016 misalnya, pertumbuhan ekonomi
global tumbuh negatif menjadi 2. dari tahun 2015 yang mampu tumbuh 2.7. Kebangkitan aliran
kanan di Amerika Serikat dan Eropa menjadikan dunia bergeser sangat proteksionis. Keputusan
Inggris keluar dari Uni Eropa (Brexit) dan kemenangan Donald Trump dalam pemilihan umum
presiden Amerika Serikat merubah konstelasi kebijakan ekonomi internasional, serta menghambat
agenda pertumbuhan ekonomi dan stabilitas. Meskipun Bank Dunia memproyeksikan di tahun
2017 ekonomi global mampu tumbuh 2,7 akan tetapi proyeksi pertumbuhan ekonomi global sampai
dengan 2019 hanya mampu tumbuh sebesar 0,2 menjadi 2.9.

Melemahnya lokomotif ekonomi global seperti AS, China dan Uni Eropa diperparah dengan
absennya alternatif penyangga ekonomi global. Negaranegara emerging market seperti Brazil,
Rusia, India, China dan Afrika Selatan (BRICS) atau negara Asia yang diprediksi mampu menjadi
pengganti lokomotif baru ekonomi global juga mengalami pelambatan ekonomi. Lambatnya
pertumbuhan ekonomi negara emerging market tidak hanya didasarkan pada buruknya
fundamental ekonomi (misalnya ketergantungan tinggi pada komoditas seperti Rusia yang
mengalami beban fiskal tinggi di saat harga minyak turun dalam waktu lama), tapi juga karena
instabilitas politik (misalnya di Brazil, India, Thailand dan Filipina) yang mengakibatkan tertekannya
kinerja ekonomi.

Memburuknya kinerja ekonomi negara juga membuat kinerja korporasi negara-negara maju
dan emerging market juga bermasalah. Sepanjang tahun 2016 misalnya, peningkatan rasio hutang
swasta yang tak terkendali serta peristiwa vonis pengadilan Amerika Serikat atas Deutche Bank di
akhir tahun 2016 menjadi kabar buruk bagi ekonomi global. Masalah hutang swasta di China
secara mengejutkan terus meningkat bahkan rasio hutang swasta China terhadap GDP negara lebih
dari 250 persen pada tahun 2015, selain itu sepanjang 2015-2016, Bursa Saham Shanghai (Shanghai
Composite Index) mengalami volatilitas yang cukup tinggi. Forbes mencatat setidaknya dalam kurun
waktu 2015 terjadi tiga kali volatilitas yang cukup tajam pada 12 Juni 2015, 27 Juli 2015, dan 24
Agustus 2015 serta pada 4 Januari 2016 dan 7 Januari 2016 dan 14 Juni 2016. Tercatat Shanghai
Composite Index terus mengalami koreksi dan yang paling tajam terjadi pada 24 Agustus 2015 yaitu
sebesar 30 persen.

Situasi yang mengkhawatirkan tidak hanya datang dari China, tetapi juga dari Jerman.
Dengan kinerja ekonomi yang cukup bagus dan menjadi motor ekonomi Eropa dengan
pertumbuhan ekonomi per Juli 2016 sebesar 3,1 persen dengan rata-rata pertumbuhan Eropa di
angka 1,6 persen, ancaman krisis yang berasal dari dari Jerman membuat ekonomi global semakin
tertekan. Sangsi Pengadilan Amerika Serikat menjatuhkan denda sebesar sebesar US$ 14 miliar atas
Deutsche Bank karena menjual kredit perumahan murah (subprime mortgage, yang mengkibatkan
krisis 2008). Terancam bangkrut, saham Deusche Bank turun sebesar 7 persen pada 2016 dan
mengakibatkan pasar keuangan global juga terkena dampak meski hanya bersifat sementara. Indeks
saham Eurostoxx di Uni Eropa misalnya terkoreksi 1,86 persen di angka 2975,88. Selain itu Indeks
Harga Saham Gabungan, Bursa Efek Indonesia juga tertekan di angka 36,76 poin atau setara dengan
0,68 persen di angka 5.352,13.3 Peristiwa Deutsche menjadi alarm akan terjadinya krisis ekonomi di
tahun 2016 sebagaimana katogori IMF yang menyebutkan Deutsche sebagai bank dengan skala
global yang berpotensi resiko sistemik terhadap ekonomi global, meskipun pada akhirnya sangsi
bisa dikompromikan dengan pengurangan jumlah denda oleh pengadilan Amerika Serikat sehingga
dapat menghindari kebangkrutan Deutsche Bank.

Kekhawatiran kedua potensi sumber krisis baru jelas menjadikan prospek pertumbuhan
ekonomi global kedepan menjadi sangat terjal. Setidaknya sepanjang tahun 2016 peristiwa besar
global seperti keluarnya Inggris dari Uni Eropa, melemahnya harga minyak global yang berjalan
cukup lama, normalisasi ekonomi Tiongkok dan Amerika Serikat sebagai ‘motor’ utama ekonomi
global mengakibatkan pertumbuhan ekonomi global terus terkoreksi dari 3,4 persen menjadi 3,2
persen di tahun 2016. Selain itu peristiwa di 2017 seperti serangan Amerika Serikat ke Suriah, dan
ancaman perang dengan Korea Utara akan menambah beban pemulihan ekonomi global dari gejala
secular stagnation. Tanda-tanda terjadinya krisis baru sangat mungkin terjadi mengingat situasi
dunia hari ini berada dalam ketidakpastian dan ambiguitas. Berdasar situasi ekonomi global di atas,
kajian ini akan mengkaji bagaimana cara Indonesia menghadapi VUCA ekonomi global, serta apa
yang harus dilakukan Indonesia dalam merespon pelemahan ekonomi global.

2. TINJAUAN PUSTAKA

Alesina et al (1996) dalam Political Instability and Economic Growth menyatakan bahwa
ketidakstabilan politik berpengaruh atas pertumbuhan ekonomi terutama aspek kudeta. Hubungan
politik dan ekonomi sangat mempengaruhi satu sama lain. Berdasarkan Alesiana et al (1996),
setidaknya dapat disimpulkan beberapa hal yaitu bahwa: perubahan negara yang sifatnya
sementara akan mempengaruhi pertumbuhan ekonomi; tidak adanya korelasi antara sistem negara
(otoritarian atau demokrasi) terhadap pertumbuhan ekonomi; serta, faktor yang paling penting
adalah stabilitas politik terhadap pertumbuhan ekonomi. Riset Alesina menyimpulkan bahwa dari
113 negara (periode 1950-1982) dengan instabilitas politik yang tinggi (bahkan menuju negara
gagal), mengalami penurunan pertumbuhan ekonomi yang cukup signifikan. Negara-negara di
Timur Tengah dan Asia Selatan mengkonfirmasi temuan Alesina et al. Dengan volatilitas perubahan
rejim yang cukup besar (istabilitas politik), mengakibatkan performa ekonomi menurun. Thailand
contohnya, perubahan rezim melalui kudeta mengakibatkan instabilitas politik yang berdampak
pada pertumbuhan ekonomi negatif.

Diplomasi ekonomi merupakan bagian dari pemenuhan kebijakan luar negeri. Yaitu cara
negara menjalankan kebijakan luar negeri melalui kegiatan ekonomi, baik berupa sangsi maupun
keuntungan dari aktifitas ekonomi. Lebih lanjut diplomasi ekonomi merupakan kebijakan terkait
produksi, perpindahan barang dan jasa, investasi, dan kerjasama ekonomi. Perwujudan kepentingan
nasional merupakan tujuan akhir dari diplomasi ekonomi. Cakupan dalam diplomasi ekonomi,
menurut Perwita (2008) setidaknya ada tiga isu penting: pertama, hubungan antara ekonomi dan
politik, kedua hubungan antara lingkungan serta aneka tekanan domestik dan internasional dan
yang terakhir hubungan antara aktor negara dan nonnegara (aktor privat/ swasta). Cakupan
diplomasi yang melibatkan tidak hanya aktor non negara menempatkan diplomasi ekonomi ke
dalam multi track diplomasi dalam kajian diplomasi. Aktor dalam diplomasi ekonomi tidak hanya
dimonopoli oleh aktor negara tapi juga berlaku untuk swasta seperti multinational corporation,
kamar dagang, maupun perorangan. Implementasi dari diplomasi ekonomi bermuara pada
kepentingan nasional, yaitu bahwa diplomasi ekonomi ditujukan untuk mencapai kepentingan
nasional melalui kebijakan luar negeri.

3. METODE PENELITIAN

Penelitian ini menggunakan metode kualitatif, yaitu untuk menghasilkan data deskriptif,
yaitu ucapan atau tulisan, atau perilaku yang dapat diamati dari subjek itu sendiri (Fuchran, 1998).
Pendekatan penelitian ini adalah analisis wacana kritis (critical discourse analysis). Menurut Badara
(2012) analisis wacana kritis yaitu suatu pengkajian secara mendalam yang berusaha mengungkap
kegiatan, pandangan, dan identitas berdasarkan bahasa yang digunakan dalam wacana. Data yang
disajikan dalam kajian ini adalah data sekunder. Metode pengumpulan data menggunakan studi
literatur, baik jurnal, buku, maupun berita.

4. ANALISIS DATA DAN PEMBAHASAN

Absennya Alternatif “Lokomotif” Ekonomi Global dan Masalah Emerging Market

Negara - negara berkembang yang tumbuh positif sangat dipengaruhi oleh hadirnya
lokomotif ekonomi global seperti China, Amerika, Jepang, dan Uni Eropa. ASEAN misalnya (dengan
porsi ekspor utama ke China dengan 15,2 persen, Jepang 10,5 persen, Uni Eropa 10 Persen dan
Amerika Serikat 9,3 persen) ikut tertekan dan tidak mampu menjadi alternatif “lokomotif” ekonomi
global, ketika “lokomotif” ekonomi global mengalami turbulensi ekonomi. Melambatnya ekonomi di
negara maju (Advanced Industrial Country) –seperti AS, UE, Jepang serta China– memberi
kesempatan kepada negara peripheral untuk menggantikan peran menjadi negara industri seperti
Brazil, Rusia, India, China, South Africa (BRICS). Dengan porsi ekonomi kelima negara yang setara
dengan 43 persen populasi dunia, 30 persen GDP serta 17 persen total perdagangan global, BRICS
sangat layak sebagai alternatif “lokomotif” ekonomi global dan diproyeksikan mampu menghasilkan
GDP sebesar USD 128.4 triliun pada tahun 2050. Tepat pada pertemuan ke delapan BRICS pada 15-
16 Oktober 2016 di Goa – India, tahun 2016, Kondisi BRICS berbalik arah, Brazil, Afrika Selatan dan
Rusia mengalami pelambatan ekonomi bahkan tumbuh negatif karena harga komoditas yang turun
di pasar global.

Dengan pondasi ekonomi yang masih bergantung pada sektor komoditas, Brazil dan Rusia
sangat tertekan ketika harga minyak anjlok di luar prediksi (bahkan hingga 20 Dollar per barel).
Melemahnya ‘mesin’ ekonomi global dan dengan kemampuan militer yang dimiliki negara BRICS
memberi peluang bagi munculnya negara superpower baru. Akan tetapi, tidak hanya aspek
turbulensi ekonomi global, namun juga konflik internal (dan transnasional) serta stabilitas dalam
negeri, masalah yang terus terus mendera BRICS saat ini berkembang menjadi, seperti, separatisme
dan terorisme. Problem emerging market dengan tingginya instabilitas politik menjadikan BRICS
yang dalam pembentukanya digadang-gadang mampu menjadi lokomotif ekonomi global harus
surut sebelum mampu menjadi negara superpower. Motor utama BRICS, China misalnya terus
menunjukkan koreksi ekonomi yang cukup tajam. Bank Dunia mengoreksi pertumbuhan China dari
tahun 2015 sebesar 6,9 persen menjadi 6,7 persen di tahun 2016. Normalisasi ekonomi China
diprediksi akan terus berlangsung lama. Selain itu China masih terkendala berbagai macam stabilitas
politik domestik seperti kisruh dengan Taiwan, serta konflik di Laut China Selatan dengan beberapa
negara ASEAN.

Sikap ‘anarkis’ China tidak hanya berpotensi memperlambat kinerja pemulihan ekonomi,
tapi juga berpotensi mengurangi aliansi China di kawasan. Begitu juga yang terjadi pada Rusia dan
Brazil, pertumbuhan ekonomi Rusia terkoreksi minus 1,2 persen dan Brazil yang minus 4,0 persen.
Keduanya terus terpukul atas menurunnya harga minyak global karena struktur ekonomi yang
masih tergantung dengan ekonomi berbasis komoditas. Praktis hanya India yang menunjukkan
kinerja ekonomi yang cukup impresif dengan tumbuh 7.6 persen di tengah terus terkoreksinya
pertumbuhan ekonomi global di angka 2.4 persen. Beban berat BRICS tidak hanya dikarenakan
kinerja ekonomi yang terus menurun tetapi juga ketidakstabilan politik dan keamanan di dalam
negeri BRICS. Brazil mengalami ketidakstabilan karena pemakzulan Dilma Rousseff. Pembelahan
sosial akibat proses pemakzulan mengganggu legitimasi pemerintahan Michel Temer. Hal serupa
terjadi di Rusia, meski dalam negeri relatif stabil, tetapi konflik Ukraina dan serangan Rusia ke
Suriah menjadi hambatan pemulihan ekonomi akibat rendahnya harga minyak dunia. India juga
harus berhadapan dengan ancaman domestik dan kawasan. Konflik Thamil serta yang terakhir
Nerenda Modi menyebut Pakistan sebagai mother of terorism masih menjadi ancaman atas proses
reformasi ekonomi India.

Alternatif Pasar Bagi Indonesia

Pelajaran Krisis ekonomi pada 2008 memberi gambaran dan pelajaran. Sebagian besar
analis menyimpulkan bahwa ekonomi Indonesia akan tahan terhadap dampak krisis 2008, salah
satunya karena ekonomi Indonesia tidak begitu terintegrasi dengan ekonomi global secara kuat dan
mendalam. Akan tetapi tidak bisa dipungkiri krisis 2008 tetap mengirim sinyal krisis sistemik,
khususnya di sektor finansial pasca gagal kliring Bank Century. Cara Indonesia memitigasi ancaman
krisis sangat jelas sulit diprediksi. Tetapi setidaknya dapat menengok situasi ekonomi global 2008.
Ancaman krisis Deutsce Bank dan hutang China jelas sangat mengkhawatirkan, pertama Deutcsce
akan memukul sektor finansial yang berpotensi sistemik sedangkan krisis hutang China akan
memukul perdagangan Indonesia karena ekonomi Indonesia terintegrasi cukup kuat dengan
ekonomi China. Setidaknya Indonesia masih menghadapi masalah krusial di sektor keuangan yaitu
memitigasi dampak suku bunga The Fed atau Quantitaive Easing (QE) Amerika Serikat yang
berpotensi mengakibatkan uang keluar cukup besar di sektor keuangan.10 Mitigasi normalisasi
ekonomi AS menjadi penting baik melalui kebijakan moneter yang moderat. Ketergantungan yang
cukup tinggi terhadap China serta negara-negara maju, menjadikan Indonesia juga mengalami
tekanan ekonomi internasional. Melemahnya negara industri maju dan BRICS sebagai alternatif
penyangga ekonomi global mengharuskan Indonesia memperluas pasar ekonomi internasional.
Pertumbuhan ditargetkan tumbuh 5,4 persen seperti disampaikan Presiden Joko Widodo dalam
pidato pengantar Nota Keuangan RAPBN 2018 di parlemen. Nota keuangan RAPBN 2018 di satu sisi
memberikan sikap optimistis dan ambisius dengan proyeksi pertumbuhan 5,4 persen, akan tetapi
disisi lain memberikan pesan bahwa pemerintah memproyeksikan target yang konservatif.

Indonesia masih optimis karena di tengah melemahnya ekonomi global masih terus mampu
mengakselerasi kinerja ekonominya, akan tetapi disisi lain proyeksi pertumbuhan ekonomi memberi
pesan bahwa pemerintah sangat konservatif. Dengan target penerimaan pajak yang dipatok 9
persen dari sebelumnya memberi proyeksi penerimaan pajak pada RAPBN 2017 sebesar 18,4
persen untuk realisasi setoran pajak sepanjang 2016. Yang bisa dilakukan pemerintah adalah
meningkatkan konsumsi domestik sebagai penopang struktur ekonomi, serta perdagangan
internasional sebagai aspek penting mengakselerasi pertumbuhan ekonomi. Basri, Rahardja dan
Fitrania (2016) mengungkapkan bahwa untuk meningkatkan status Indonesia sebagai negara maju,
jalan keluarnya adalah proses industrialisasi. Indonesia harus melakukan transisi dari ekonomi
berbasis komoditas ke manufaktur. Pertumbuhan ekonomi yang selama 2003 sampai 2009 ditopang
oleh komoditas mendapatkan momentum ketika harga komoditas di pasar internasional sangat
mahal, akan tetapi mengalami penurunan pada 2011 hingga sekarang.

Ekonomi China mulai mengalami penurunan pertumbuhan ekonomi yang mengakibatkan

melemahnya permintaan komo-ditas global. Melemahnya lokomotif utama ekonomi global seperti
China, AS dan Uni Eropa telah memukul kinerja ekspor Indonesia. Jalan keluarnya adalah membuka
pasar baru untuk memperluas pasar ekspor Indonesia. Tidak ada alternatif lain selain mencari pasar
baru ketika melihat prospek ekonomi global ke depan dengan menggunakan prediksi Bank Dunia
(ekonomi global tumbuh 2,7 persen. negara maju tumbuh 1,8 per-sen, dan China stagnan pada
kisaran 6,5 persen). Di luar itu, tantangan yang bersifat politik seperti Brexit, ketidakpastian
kebijakan Donald Trump, serta menguatnya populisme kanan Uni Eropa (yang membawa
kepentingan nasional yang inward looking dengan slogan proteksionis) menjadi tantangan bagi
ekonomi global (dan Indonesia). Ekonomi internasional Indonesia yang masih tergantung pada
permintaan di negara-negara utama seperti China, Jepang, UE dan AS, jelas sangat tertekan dengan
situasi yang terjadi. Badan Pusat Statistik (BPS) mencatat bahwa ekspor pada tahun 2016 turun 3,95
persen atau US$ 144,43 miliar (YoY). 13 Opsi memperluas pasar adalah jalan keluar di tengah
melambatnya ekonomi dan dinamika geopolitik di negara utama (major country). Momentum
Perluasan Pasar Dunia selatan menjadi alternatif pasar baru bagi Indonesia. Rilis Harvard's Centre
for International Development (CID), Atlas of Economic Complexity, memprediksi bahwa pada
tahun 2024 India akan tumbuh 7 persen, dan Afrika Timur (di antaranya Uganda dan Kenya) tumbuh
6 persen. Selain India dan Afrika Timur, Asia Tenggara diprediksi akan menjadi “lokomotif” baru
ekonomi global sedangkan China diprediksi hanya tumbuh 4,3 persen. 14 Situasi ini setidaknya
dalam konteks hubungan internasional memberi keuntungan bagi Indonesia baik karena faktor
historis maupun faktor ekonomi politik.

Mengacu pada sejarah, Indonesia dan negara-negara selatan memiliki persahabatan dan
diplomasi panjang seperti Konferensi Asia Afrika. Momentum menghidupkan diplomasi Asia Afrika
dengan dunia selatan setidaknya mendapatkan momentum pada peringatan ke 60 tahun Konferensi
Asia Afrika pada 2015, tapi sayangnya gelaran multilateral yang sangat strategis untuk memperkuat
diplomasi dengan negara selatan tersebut hanya sebatas seremonial. Posisi strategis India dan
Indonesia pada konferensi Asia Afrika seharusnya dapat menjadi “lokomotif gerbong”
pembangunan negara-negara di Asia Selatan dan Afrika. Selain itu, pertemuan seperti Konferensi
tingkat tinggi (KTT) negara-negara lingkar Samudera Hindia atau Indian Ocean Rim Association
(IORA) seperti yang diadakan pada 7 Maret 2017 di Jakarta seharusnya menjadi pertemuan yang
strategis dalam memperluas akses pasar. Selain faktor historis, faktor ekonomis menjadi faktor
penting dalam membangun hubungan dagang dengan negara-negara selatan. Pertumbuhan
ekonomi Asia Selatan yang diprediksi tumbuh 7,3 persen, serta Afrika Timur di angka 5-8 persen
pada tahun 2017 menjadi pasar yang cukup potensial bagi Indonesia. 15 Meski memiliki kesamaan
sebagai negara yang menggantungkan pada barang-barang komoditas, Indonesia masih memiliki
keunggulan komparasi serta dapat menggenjot ekspor Industri Mesin Logam Dasar dan Elektronika
(IMEDE). Dengan pertumbuhan ekonomi Asia selatan dan Afrika timur yang mengesankan di atas
pertumbuhan ekonomi global, pasar Industri Mesin Logam Dasar dan Elektronika cukup
menjanjikan seperti yang dilakukan PT. PINDAD dengan mengekspor Anoa, dan ekskavator ke
beberapa negara Asia selatan dan Afrika seperti Pakistan dan Senegal, serta PT INKA yang memasok
250 gerbong kereta api ke Bangladesh Railways.

Kesuksesan terbang N-219 juga menjadi momentum memperluas pasar ke Afrika dan Asia
Pasifik yang terus mengalami kenaikan rute perintis dengan kebutuhan pesawat model N219.
Tantangan: Problem domestik dan Emerging Market Dua tahun pemerintahan dengan agenda
reformasi ekonomi yang terus didorong pemerintah ekonomi melalui paket kebijakan ekonomi
serta ekspansi belanja pemerintah dalam infrastruktur menandakan pemerintah terus memacu
mesin ekonomi Indonesia, tapi pekerjaan rumah yang sangat fundamental masih menjadi tantangan
bagi pemerintah. Pekerjaan rumah yang krusial adalah merubah ketergantungan pada komoditas
yang besar dalam perdagangan internasional menuju ekonomi berbasis manufaktur. Secara makro,
struktur perdagangan internasional Indonesia masih didominasi komoditas sebesar 79,6 persen,
manufaktur sebesar 8,6 persen, dan jasa sebesar 11,8 persen (2015). Laporan World Bank Kuartal II
(2016) misalnya, menyebutkan agregat perdagangan internasinal Indonesia ke pasar global selama
15 tahun hanya mencatatkan nilai sebesar 0,6 persen.16 Meski mengalami ancaman non-
tradisional seperti terorisme dan instabilitas kawasan akan tetapi secara keseluruhan masih
tergolong relatif aman. Yang justru menguras energi adalah instabilitas politik domestik.
Serangkaian kegaduhan di akhir tahun seperti aksi demonstrasi 212 serta ancaman upaya kudeta
memberikan pesan buruk bagi upaya reformasi ekonomi. “Kegagapan” pemerintah dalam
meredakan kondisi politik domestik akan semakin memperberat upaya perbaikan ekonomi.

5. KESIMPULAN, IMPLIKASI, SARAN, DAN BATASAN

Ketidak menentuan ekonomi global membutuhkan respon kebijakan ekonomi politik

internasional Indonesia agar dapat memitigasi ancaman krisis baru. Selain itu ditengah melemahnya
kinerja ekonomi negara maju yang notabene adalah pasar utama ekspor Indonesia seperti China,
Amerika Serikat, Uni Eropa, dan Jepang memberikan momentum bagi Indonesia untuk memperluas
pasar ekspor non tradisional ke kawasan selatan seperti Asia Selatan dan Afrika yang diprediksi akan
terus mengalami pertumbuhan ekonomi yang tinggi diatas pertumbuhan ekonomi global. Perluasan
pasar ke kawasan selatan tidak hanya secara ekonomi menguntungkan akan tetapi juga secara
historis dan politik internasional memberikan dampak bagi Indonesia. Indonesia memiliki modal
sejarah hubungan yang relatif baik dengan kawasan selatan melalui Konferensi Asia Afrika.

Tantangan memperluas agenda perluasan pasar Asia Selatan dan Afrika memiliki resiko yang
cukup besar terkait stabilitas politik yang akan mempengaruhi kinerja ekonomi. Masih kuatnya
instabilitas politik domestik dan ancaman konflik membuat ketidakmenentuan kinerja ekonomi.
Pada kondisi yang demikian perluasan pasar ekspor Indonesia diluar negaranegara maju seperti Asia
Selatan dan Afrika tetap menjadi pasar alternatif bagi ekspor Indonesia.
 JURNAL NASIONAL

2. PEREKONOMIAN INDONESIA DI TENGAH BAYANG - BAYANG PERLAMBATAN

GLOBAL

1. Pendahuluan

Kinerja perekonomian Indonesia sepanjang tahun 2015 menunjukkan tanda-tanda

pelambatan yang cukup nyata. Perekonomian global yang belum menunjukkan tanda-tanda pulih
memberikan imbas yang cukup signifikan pada pertumbuhan ekonomi Indonesia yang terus
melambat serta menyebabkan tren depresiasi rupiah yang cukup persisten. Sementara itu secara
internal, belum tuntasnya infrastruktur pendukung produksi juga turut menyumbang melambatnya
kinerja ekspor yang pada gilirannya turut memberikan tekanan yang berlebihan pada rupiah.

2. Pertumbuhan Ekonomi

Efek perlambatan krisis global rupanya masih ikut membayangi melambatnya pertumbuhan
ekonomi di Indonesia. Berdasarkan data yang direlease oleh BPS menunjukkan bahwa pada kuartal
II tahun 2015 ini angka pertumbuhan ekonomi tidak menunjukkan kinerja yang memuaskan yaitu
hanya mampu mencapai level 4.67% (yoy). Angka ini lebih rendah dari pencapaian kuartal
sebelumnya yaitu 4.72% dan di bawah angka pertumbuhan ekonomi periode yang sama tahun 2014
yang mencapai 5.03%.

Stagnasi yang melanda di negara-negara yang menjadi mitra dagang Indonesia menjadi
salah satu faktor yang turut mempengaruhi perlambatan tersebut. Perlambatan ekonomi yang
terjadi di Tiongkok berpengaruh signifikan terhadap perekonomian Indonesia, apalagi pada saat ini
Indonesia sedang hangat-hangatnya menjalin kerjasama dengan Negeri Tirai Bambu tersebut.
Perlambatan ekonomi di Tiongkok berdampak pada sektor riilnya sehingga membawa dampak
terhadap turunnya harga komoditas di pasar internasional.

Selain itu, gejolak yang terjadi di pasar keuangan akibat ketidakpastian paket kebijakan the
Fed yang akan dikeluarkan selanjutnya. Turunnya angka pengangguran di AS secara signifikan
mengurangi ekspektasi terhadap kenaikan suku bunga yang akan diumumkan bulan September.
Kondisi ini masih ditambah dengan efek tidak langsung resminya Yunani dinyatakan sebagai negara
yang bangkrut.

Angka pertumbuhan ekonomi dari sisi produksi pada kuartal II ini ditopang oleh
pertumbuhan yang terjadi di sektor jasa. Masih rendahnya harga minyak juga menjadi faktor
koreksi yang mempengaruhi pertumbuhan ekonomi dari sektor pertambangan dan penggalian.
Sedangkan dari sisi pengeluaran, karakter masyarakat Indonesia yang cenderung konsumtif
mendorong konsumsi RT menjadi faktor penopang pertumbuhan yang paling tinggi jika
dibandingkan dengan komponen lainnya.

Meskipun demikian melambat, akan tetapi jika dibandingkan dengan negara-negara lain
seperti AS, Tiongkok dan Singapura yang cenderung stagnan dan mengalami penurunan
pertumbuhan, perekonomian Indonesia sebenarnya masih menunjukkan kinerja menuju ke arah
yang semakin baik. Ekspansi fiskal melalui pengeluaran pemerintah diharapkan semakin meningkat
pada periode selanjutnya sehingga diharapkan dapat menjadi stimulus positif untuk menggerakan
perekonomian.
 Hasil proyeksi dari RPM FEB UI dalam RPM FEB UI Economic Forecast menunjukkan bahwa
pertumbuhan GDP pada kuartal III dan IV tahun 2015 akan meningkat dari dua kuartal sebelumnya.
Pertumbuhan GDP pada kwartal III dan IV diprediksikan dapat mencapai angka 5.09 % dan 5.29 %.
Hal ini seiring dengan prediksi serapan APBN yang semakin membaik serta perbaikan pada level
permintaan masyarakat jelang akhir tahun. Sehingga di tahun 2015 ini, pertumbuhan ekonomi
secara keseluruhan diperkirakan akan mencapai angka 4.93%.

Salah satu indikator makro ekonomi yang menjadi perhatian dan menimbulkan
kekhawatiran banyak pihak adalah pergerekan Rupiah yang terus mengalami tekanan. Badai yang
menghantam nilai tukar Rupiah terhadap Dolar diprediksikan masih akan terus berlangsung seiring
kondisi global yang belum pulih dan perhatian dunia terhadap perkembangan perekonomian AS.

Menurut data dari Bank Indonesia dalam 3 bulan terakhir ini, Rupiah telah mengalami
depresiasi sebesar 2.47% ( q to q). Dengan semakin terbukanya perekonomian Indonesia maka
akan semakin rentan terhadap gejolak eksternal khususnya dalam pergerakan nilai tukar. Tekanan
terhadap Rupiah juga merupakan imbas dari sikap investor yang mulai berjaga-jaga untuk
mengantisipasi rencana kenaikan suku bunga the Fed. Kebijakan Tiongkok untuk melakukan
devaluasi terhadap Yuan menimbulkan reaksi secara global sehingga menyebabkan hampir semua
mata uang mengalami depresiasi. Akan tetapi jika diamati, Rupiah mengalami pekembangan yang
cukup dalam dan dapat dikatakan bahwa kondisinya saat ini berada di bawah nilai fundamentalnya
atau undervalue. Dari sisi domestik, tekanan lebih banyak disebabkan oleh naiknya permintaan di
pasar valas sebagai akibat mulai jatuh temponya pembayaran utang dan pembayaran deviden.

Pemerintah melalui Bank Indonesia terus berusaha menjaga kestabilan nilai tukar Rupiah
diantaranya dengan tetap menjaga tingkat suku bunga acuan sebesar 7.5%. Jelang akhir bulan
September Rupiah ditutup menguat pada Rp 14653/Dolar AS dan menguat sebesar 0.26%
dibandingkan dengan penutupan hari sebelumnya. Mulai menghijaunya bursa saham di Wall Street
membawa dampak positif terhadap pasar bursa Asia berupa masuknya aliran dana yang mendorong
terjadinya apresiasi Rupiah bersama dengan mata uang lain. Paket kebijakan moneter bank
Indonesia yang diumumkan 30 September diharapkan dapat membawa Rupiah bergerak ke posisi
yang lebih kuat.

Sementara itu, RPM FEB UI memprediksikan bahwa rupiah akan mengalami tren depresiasi
yang cukup persisten, dimana rupiah bisa mencapai titik terendahnya di bulan september hingga
oktober dan berada pada rentang rata-rata Rp14.650 per dolar AS hinggga Rp14.850 per Dolar AS.
Sementara itu di penghujung tahun 2015, posisi Rupiah diprediksikan akan mengalami apresiasi
dalam rentang ratarata 13.900 hingga 14.300 per Dolar AS. Meskipun demikian, RPM FEB UI masih
melihat rupiah dalam posisi yang undervalue karena tekanan berlebihan dari faktor eksternal
(devaluasi yuan dan fenomena strong dollar) yang membentuk ekspektasi negatif dari masyarakat.
Menurut perhitungan kami, tanpa adanya ekspektasi negatif tersebut, rupiah seharusnya berada di
level 13. juga menjadi salah satu faktor yang menyeret pergerakan IHSG berada di zona merah.
Keputusan pemerintah menaikkan tarif impor barang konsumsi seperti makanan dan minuman
justru menjadi bumerang yang akan menurunkan daya beli masyarakat. Kebijakan yang dilakukan
pemerintah pun dan berkurangnya kepercayaan investor terhadap kredibilitas pemerintahan yang
sedang berjalan membuat persepsi negatif terhadap pasar sehingga berdampak terhadap
penurunan IHSG. Keadaan ini masih ditambah dengan ketidakpastian kebijakan suku bunga The
Fed. Bergejolaknya bursa saham di Tiongkok sebagai akibat terjadinya spekulasi besar-besaran
membuat saham-saham di negara tersebut berjatuhan. Kejatuhan ini tentunya akan membawa
imbas bagi pergerakan saham di bursa saham lainnya tak terkecuali Indonesia. Pada pekan akhir di
bulan Juli, IHSG ditutup pada level sebesar 4856.59 atau turun sebsar 0.94% bila dibandingkan
dengan penutupan pada pekan sebelumnya.

Rupanya bulan Agustus masih belum membawa angin yang positif bagi pergerakan IHSG di
bulan Agustus ini. IHSG kembali ditutup pada level yang lebih rendah daripada bulan sebelumnya
yaitu berada pada angka sebesar 4509. Pergerakan negatif IHSG masih dibayangi dengan semakin
terpuruknya nilai Rupiah yang mulai menyentuh kisaran 14.000 per Dolar AS sebagai akibat
devaluasi Yuan yang dilakukan oleh pemerintah Tiongkok.

Hingga akhir September kinerja bursa saham di Indonesia juga masih belum menunjukkan
aura positif yang kuat. Meski sempat ditutup menguat pada akhir September ini akan tetapi gejolak
baik yang bersifat internal maupun eksternal masih akan terus membayangi fluktuasi nilai saham
selama beberapa waktu ke depan.

3. Inflasi

Berdasarkan data inflasi yang diumumkan oleh BPS,pada bulan Juli lalu inflasi tercatat
berada pada angka 0.93% atau naik dari bulan sebelumnya yang mencapai angka sebesar 0.54%.
Meskipun demikian, jika dibandingkan dengan periode yang sama tahun lalu, angka ini rupanya
memiliki besaran yang sama persis.

Meskipun demikian angka tersebut masih tergolong masih terkendali karena angkanya
berada di bawah level 1%, mengingat bahwa pada bulan Juli tingginya angka inflasi didominasi oleh
inflasi yang terjadi di sektor transportasi dan bahan makanan. Hal ini tentu tidak mengejutkan
karena bulan Juli adalah bulan Ramadhan dan sekaligus momen lebaran sehingga tradisi
masyarakat Indonesia yang melalukan mudik setiap lebaran tentunya memicu terjadinya inflasi di
sektor transportasi. Naiknya permintaan terhadap bahan makanan dalam rangka merayakan
lebaran juga turut menyumbang angka inflasi di bulan Juli ini.

Sedangkan pada bulan Agustus,inflasi mengalami penurunan. Inflasi bulanan berdasarkan

angka BPS tercatat sebesar 0.39% dan 4.92% (yoy). Pasca lebaran membuat lonjakan inflasi yang
sebelumnya didominasi dari sektor transportasi kembali ke posisi yang normal. Turunnya tarif
angkutan umum di bulan Agustus menjadi faktor yang menahan laju inflasi. Sedangkan pemicu
inflasi di bulan Agustus sebagian besar berasal dari komoditi pangan dan sektor pendidikan seiring
dimulainya tahun ajaran baru.

Inflasi tahun 2015 diproyeksikan akan berada dalam rentang 3,9% hingga 4,4 % yang artinya
masih berada dalam range target Bank Indonesia sebesar 4 +/- 1 persen. Rendahnya inflasi
sepanjang tahun 2015 ini merupakan sumbangan dari melemahnya permintaan domestik sebagai
akibat dari pelambatan pertumbuhan ekonomi.

4. Ekspor-Impor

Pada bulan Juli 2015, Indonesia masih mencatat surplus pada neraca perdagangan. Surplus
kali ini merupakan surplus yang terbesar sepanjang tahun 2015 ini. akan tetapi jika dibandingkan
dengan bulan sebelumnya yaitu bulan Juni, sebenarnya pada bulan Juli terjadi penurunan baik dari
sisi ekspor maupun dari sisi impor. Nilai impor pada bulan ini menyusut sebesar kurang lebih 22.4%
bila dibandingkan dengan bulan sebelumnya. Angka impor ini termasuk yang paling rendah dalam
kurun waktu 5 tahun terakhir. Sedangkan bila dibandingkan dengan bulan sebelumnya, nilai ekspor
menurun pada kisaran 15.5%.
 Surplusnya neraca perdagangan Indonesia sebenarnya bukan berasal dari perbaikan kinerja
ekspor, melainkan berasal dari semakin kecilnya angka impor. Surplus perdagangan bisa menjadi
hal yang positif bagi indikator makroekonomi. Akan tetapi kecilnya angka impor bisa jadi
merupakan indikasi bahwa sektor industri di dalam negeri sedang menahan diri untuk tidak
melakukan ekspansi atau justru bahkan mengurangi produksinya. Karena proporsi impor sebagian
besar merupakan impor barang modal dan bahan baku. Oleh karena itulah, diharapkan dengan
paket kebijakan yang dikeluarkan oleh pemerintah baik kebijakan seri I maupun seri II diharapkan
dapat menjadi stimulus yang akan berdampak positif terhadap perekonomian. Paket kebijakan II
yang lebih menekankan pada perbaikan birokrasi dan perijinan diharapkan dapat memperbaiki iklim
usaha di Indonesia sehingga dapat menjadi faktor penarik investor untuk menanamkan modalnya
dan dalam setengah semester ke depan bisa mendorong pertumbuhan ekonomi menuju target
yang diharapkan.
 JURNAL NASIONAL

3. KERUGIAN STAGNASI PEREKONOMIAN LUAR NEGERI TERHADAP INDONESIA.

1. Pendahuluan
Tahun 2016 akan menjadi sebuah tantangan besar bagi Indonesia. Berbagai isu domestik
dan internasional akan terus menghantui kinerja perekonomian Indonesia kedepan. Kabar baiknya
adalah, Tekanan inflasi sudah mulai melunak sebagai konsekuensi dari turunnya tren harga-harga
komoditas di pasar internasional. Perekonomian global yang belum menunjukkan tanda-tanda pulih
memberikan imbas yang cukup signifikan pada pertumbuhan ekonomi Indonesia yang terus
melambat serta menyebabkan tren depresiasi rupiah yang cukup persisten. Sementara itu secara
internal, belum tuntasnya infrastruktur pendukung produksi juga turut menyumbang melambatnya
kinerja ekspor yang pada gilirannya turut memberikan tekanan yang berlebihan pada rupiah.

Menurut hasil proyeksi Research Intelligence Unit (RIU) FEB UI, pertumbuhan ekonomi
sepanjang tahun 2016 nanti diprediksikan bouncing hingga 5.25 persen dimana pada kwartal
pertama 2016 ekonomi akan tumbuh sebesar 5.08 persen, di kwartal kedua tumbuh sebesar 5.21
persen dan tetap konsisten tumbuh pada kwartal ketiga dan keempat sebesar bertutut-turut 5.31
dan 5.38 persen, namun angka ini dapat saja terkoreksi dari adanya ekonomi dunia yang tampaknya
masih membayangi pertumbuhan ekonomi di Indonesia. Beberapa hal yang mempengaruhi
pertumbuhan ekonomi Indonesia sepanjang tahun 2016 adalah sebagai berikut:

a. Kemungkinan berakhirnya stimulus moneter di Amerika Serikat

Diakhirinya stimulus moneter di Amerika Serikat (tapering off) akan memicu terjadinya
peningkatan dari BI rate untuk mencegah terjadinya sudden reversal. Kenaikan dari BI rate tersebut
tentunya akan menjadi hambatan dalam melakukan ekspansi bisnis kedepan. Hal ini tentunya akan
semakin membatasi geliat pertumbuhan ekonomi sepanjang tahun 2016.

b. Melambatnya Ekonomi Mitra dagang Utama

Stagnasi yang melanda di negara-negara yang menjadi mitra dagang Indonesia menjadi
salah satu faktor yang turut mempengaruhi perlambatan tersebut. Perlambatan ekonomi yang
terjadi di Tiongkok berpengaruh signifikan terhadap perekonomian Indonesia, apalagi pada saat ini
Indonesia sedang hangat-hangatnya menjalin kerjasama dengan Negeri Tirai Bambu tersebut.
Perlambatan ekonomi di Tiongkok berdampak pada sektor riilnya sehingga membawa dampak
terhadap turunnya harga komoditas di pasar internasional.

Sepanjang tahun 2016, perekonomian Cina akan mengalami pelambatan yang cukup
persisten yang dipicu oleh adanya kondisi rapid aging society. Data sepanjang tahun 2015 telah
menjustifikasi terjadinya pelambatan tersebut. Bahkan IMF terus melakukan koreksi atas
pertumbuhan ekonomi Cina sepanjang tahun 2015 dimana Cina hanya tumbuh sebesar 6.7 persen
saja. Di tahun 2015, pelambatan tersebut tampak semakin nyata dan persisten. Mengingat Cina
merupakan partner dagang terbesar untuk Indonesia (lebih dari 20 persen dari total ekspor
Indonesia), maka pelambatan dari ekonomi Cina juga memberikan pengaruh terhadap pelambatan
ekonomi di Indonesia.

Sementara itu, RIU FEB UI juga melakukan proyeksi pertumbuhan ekonomi tahunan hingga
tahun 2019. Pada tahun 2019 nanti, tingkat pertumbuhan ekonomi nanti diprediksikan tidak
mampu mencapai 7 persen, sebagaimana ditargetkan oleh pemerintah. Menurut proyeksi dari RIU
FEB UI, ekonomi Indonesia hanya akan tumbuh tidak lebih dari 6 persen. Hal ini tentunya Patut
menjadi catatan bahwa faktor-faktor utama yang dewasa ini berkontribusi terhadap pertumbuhan
ekonomi sangat rentan akan shock. Meskipun mengalami melambat, akan tetapi jika dibandingkan
dengan negara-negara lain seperti AS, Tiongkok dan Singapura yang cenderung stagnan dan
mengalami penurunan pertumbuhan, perekonomian Indonesia sebenarnya masih menunjukkan
kinerja menuju ke arah yang semakin baik. Ekspansi fiskal melalui pengeluaran pemerintah
diharapkan semakin meningkat pada periode selanjutnya sehingga diharapkan dapat menjadi
stimulus positif untuk menggerakan perekonomian..

2. Nilai Tukar Rupiah

Berakhirnya stimulus moneter di Amerika serikat berpotensi memicu terjadinya arus model
keluar dalam jangka pendek. Hal ini tentunya sangat menekan nilai tukar rupiah dimana RIU FEB UI
memproyeksikan terjadinya depresiasi rupiah sepanjang tahun 2016. Pada kwartal pertama, nilai
rupiah akan bergerak di level 14.100 an terhadap Dolar Amerika Serikat. Pelambatan cukup
persisten akan terjadi di kwartal 2 hingga kwartal 4 dimana rupiah mencapai pelemahan
terburuknya dengan rata-rata 14.700 an. Secara umum pada tahun 2016 nanti rupiah akan
mengalami depresiasi sebesar 7.2 persen secara year on year. Dengan semakin terbukanya
perekonomian Indonesia maka akan semakin rentan terhadap gejolak eksternal khususnya dalam
pergerakan nilai tukar. Tekanan terhadap Rupiah juga merupakan imbas dari sikap investor yang
mulai berjaga-jaga untuk mengantisipasi rencana kenaikan suku bunga the Fed.
 JURNAL INTERNASIONAL

1. THE US ECONOMY SINCE THE CRISIS: SLOW RECOVERY AND SECULAR

STAGNATION

1 INTRODUCTION

The recovery from the Great Recession of 2008–9 has been the slowest and longest of any
cyclical upturn in the US economy since the Great Depression of the 1930s. This slow and prolonged
recovery was partly a result of the severity of the financial crisis that provoked the recession and
the need to repair balance sheets in its aftermath (Koo 2013) as well as inadequate policy responses
that failed to provide sufficient stimulus. Nevertheless, the sluggish recovery since 2009 also
reflects a continuation of a longer-term growth slowdown, which was evidenced earlier in the
jobless recovery and weak expansion after the milder recession of 2001. These two slow cyclical
recoveries are symptomatic of underlying structural changes that have created a tendency toward
secular stagnation in the US economy. I will argue that this tendency pre-dates the financial crisis,
but its emergence was partly obscured by the financial bubbles and debt-led boom that preceded
(and ultimately sparked) the crisis.

Before proceeding further, I would like to clarify that I am using the term ‘secular
stagnation’ here in a descriptive sense, i.e. to refer to a long-term tendency toward chronically slow
average growth as opposed to (or in addition to) a sharp short-run downturn or slow cyclical
recovery. In regard to theories of stagnation, my analysis is largely consistent with the ‘Steindlian’
theoretical perspective discussed by Hein (2016). I specifically do not mean to endorse the
neoclassical view of secular stagnation in Summers (2014, 2015), which focuses on a supposedly
negative ‘natural’ (equilibrium, real) interest rate based on a loanable funds approach (see also
Backhouse/Boianovsky 2016) – although my analysis does share some common ground in regard to
hysteresis effects and underlying causes (especially on the demand side). However, a full discussion
of alternative theoretical perspectives on stagnation would be beyond the scope of this paper.

The rest of this article is organized as follows. Section 2 presents data that demonstrate the
existence of a tendency toward secular stagnation in the US economy. Section 2 analyses the
underlying causes of this tendency. Section 3 briefly discusses the implications of this tendency for
the global economy. Section 4 concludes.

2 INDICATORS OF SLOWER RECOVERIES AND STAGNATION TENDENCIES

In arguing for the existence of a stagnation tendency in the US economy, I do not mean to
deny that post-crisis US economic performance looks relatively good according to certain
comparative benchmarks.

First, the US economy did recover from the financial crisis of 2008 better than it did
following the stock market crash of 1929, as emphasized by Bernanke (2015) and Furman (2015). As
a result of the financial bailouts, temporary fiscal stimulus and strong monetary policy responses –
however much these may be legitimately criticized for various reasons (some of which are
discussed below) – the US averted another Great Depression, and that is no small accomplishment.
Nonetheless, avoiding a deep depression could be considered a low standard for modern economic
performance, and does not preclude the possibility that the US has entered into a period of a
chronically lower trend rate of growth.

Second, the US economy has recovered more quickly and more fully than most other
advanced economies (especially Europe and Japan) since 2008–9. Furman (2015) shows that US
civilian employment and private domestic final purchases (the sum of consumption plus
investment) had both recovered beyond their pre-recession peaks by 78 months after the recession
began (January 2008), while the corresponding variables in the Euro Area still remained below their
January 2008 levels after the same amount of time. But this too is a low bar, given the abysmal
performance of the European and Japanese economies in recent years and their dysfunctional
policy regimes (De Grauwe 2013; De Grauwe/Ji 2016; Garside 2016).

In terms of its own historical performance, however, the deterioration of US growth in

recent years compared with earlier periods becomes apparent. Each US business cycle since the
early 1980s has exhibited slower growth in the recovery and expansion phases than the one before
it, whether we measure this by the initial recovery, trough-to-peak, or peak-to-peak. Moreover, the
cyclical performance of employment has worsened even more than that of output. Employment has
taken much longer to recover to its pre-recession peaks in the last several business cycles (all of
those since the early 1980s) compared with gross domestic product (GDP), which is why these
episodes (starting with the 1990–91 recession) have often been called ‘jobless recoveries’
(Papadimitriou et al. 2013). Although the 2001 recession was relatively shallow and short in terms
of GDP, which took only 3 quarters to recover, employment took 16 quarters to recover to its pre-
recession peak. The 2008–9 recession was, of course, much deeper and more prolonged in terms of
output, but also involved the slowest recovery of employment since the Great Depression (25
quarters or more than six years, compared with 15 quarters or almost four years for GDP). The
worsening performance of employment compared with output is not simply a matter of
employment being a lagging indicator in the business cycle (although it often is).

The slower recovery of employment in the last few cycles is also symptomatic of a deeper
and more long-term malaise affecting the US job market. Total US nonfarm employment grew by an
average of 1.8 million per year in 1960–79 and 2.0 million per year in 1980–99. From 2000 through
2015, however, the average increase in employment was only about 762,000 jobs per year, or
roughly two-fifths of the rate achieved during the previous four decades.

Thus, the stagnation in US employment began seven years before the financial crisis broke
out in 2007. The reduced rate of job creation is also reflected in the drop in the
employmentpopulation ratio for prime working-age workers (ages 25–54), which fell by 4.3
percentage points (from 81.5 to 77. percent) between 2000 and 2015 (BLS).2 Also, the real income
of the median US household began to grow more slowly in the 1970s than it had in the previous
two decades, and trended downward over the whole period 2000–13.3

Thus, the deteriorating cyclical performance of the US economy since around 2000 –
especially in the labour market – has already translated into slower long-term growth trajectories
for output, employment and family incomes. If one follows Kalecki’s (1971: 165) dictum that ‘the
long-run trend is but a slowly changing component of a chain of short-period situations; it has no
independent entity’, then the succession of ever-worsening cycles (in terms of falling GDP growth
rates and slower recovery of employment) implies a corresponding worsening of the long-term
trend. Even if one takes the most conventional measure of average annual GDP growth, this
registered only a 1.9 percent rate from 2000–15 compared with 3.3 percent in 1980–99 and 3.9
percent in 1960–79 (BEA)4 – and, as noted above, the long-term trends in employment and median
family incomes have deteriorated even more.
 Alternatively, if one views long-run growth as driven by the creation of productive capacity
on the supply side, as in most classical and neoclassical theories, then one has to confront the
mounting evidence for what has become known as ‘hysteresis’: i.e. the protracted period of
depressed actual growth has diminished the growth of potential output for theforeseeable future. A
team of Federal Reserve economists (speaking of course for themselves and not for the Board of
Governors of the Federal Reserve System) has stated flatly that ‘a significant portion of the recent
damage to the supply side of the economy plausibly was endogenous to the weakness in aggregate
demand’ (Reifschneider et al. 2015: 71). They and other economists (e.g. Ball 2014; Blanchard et al.
2015) have attributed these hysteresis effects to depressed investment in both physical and human
capital since the 2008–9 crisis.

According to these analyses, such persistent effects of the slow recovery from the crisis underlie the
dramatically lowered projections of future full-capacity output by economic forecasters, with the
implication that depressed aggregate demand has endogenously limited the expansion of aggregate
supply.

3 CAUSES OF SECULAR STAGNATION

3.1 Demand-side causes

In terms of underlying causes, the prime culprit in the weakening of aggregate demand is
the worsening of inequality in US society, which impacts the largest component of GDP:
consumption. Over the past few decades, inequality has increased along multiple dimensions,
including larger gaps between more and less educated workers, a falling labour share of national
income and a widening of the gaps between different quintiles or percentiles in the household
distribution of income (Mishel et al. 2012). One important driver of widening inequality is the
slower growth of real wages and benefits compared to labour productivity. Real hourly
compensation closely tracked output per hour until the 1970s, but has grown at a much slower rate
than productivity since then (BLS). As a result, there has been a tendency for the labour share of
corporate income to decline, although this tendency did not clearly emerge until somewhat later as
a result of differences in the price indexes used in calculating real output and compensation. The
nonfinancial corporate labour share in nominal terms exhibited the standard ‘stylized fact’ of
cyclical variations along a roughly constant trend up to the late 1990s, but has declined sharply
since 2000 (BLS).

In regard to the personal distribution of income, family income tended to increase at

roughly equal rates for all quintiles during the period 1947–79. Since then, however, the changes
have been entirely in a disequalizing direction, as income growth rates have been higher in each
higher quintile compared with the one below it – and highest for the top 5 percent (Mishel et al.
2012). From 2007–13, only the top 5 percent had any positive gains whatsoever; all other quintiles
lost, and the lower the quintile, the greater were the income losses.7 Also, the data in Piketty
(2014) reveal the tremendous increases in the income shares of the top 1 percent and top 0.01
percent in the US since the 1970s. Based on post-Keynesian or neo-Kaleckian theory, such
increasing inequality would be expected to have a depressing effect on consumption, which is the
largest component of aggregate demand.

Many studies (e.g. Onaran et al. 2011; Onaran and Galanis 2012) have confirmed that US
consumption is an increasing function of the wage share of national income. In addition, Cynamon
and Fazzari (2015) have shown that, by correcting the US national income accounts for various
misleading imputations and focusing on actual expenditures of households for consumption and
housing, a clear correlation emerges between income distribution and expenditure rates.
Specifically, Cynamon and Fazzari show that worsening inequality between the top 5 percent and
the bottom 95 percent has contributed to a sharp weakening of correctly measured household
spending.

Of course, US consumption expenditures remained quite robust throughout the 1990s and
up until the outbreak of the financial crisis in 2007. However, the negative impact of widening
inequality on consumption was offset in the late 1990s and early 2000s by massive increases in
household debt, which permitted middle-class families to increasing their spending in spite of
stagnant incomes, as argued by numerous economists (see Palley 2012;

Hein/Mundt 2013; Setterfield 2013; Cynamon/Fazzari 2015; among others). Most of the growth in
household debt occurred in residential mortgages, which contributed to the housing boom/bubble,
but some of the funds borrowed against home equity could be used directly or indirectly to pay for
additional consumption. Meanwhile, real housing prices climbed by 60 percent in the decade
leading up to their peak in 2006 and then cratered during the ensuing financial crisis (Blecker 2014:
702). This debt-led consumption-and-housing boom was of course unsustainable, and the financial
crisis put an end to the ability of US households to sustain such high levels of consumption and
housing expenditures via borrowing.

Now, one might think that the rise in the profit share in the 2000s (which is the mirror
image of the fall in the wage share discussed earlier) might have led to increases in investment that
could have compensated for the weakness of consumption, especially during the recovery from the
2008–9 crisis. In reality, however, the share of gross business fixed investment in GDP has trended
downward since 2000, in spite of a sharp increase in the profit share of corporate value added since
that time. Of course, investment does follow profitability in terms of short-run cyclical fluctuations,
with some lags, but the longerterm trends in these two variables are moving in opposite directions,
and investment has not shown the same kind of robust increase during the post-2009 recovery that
one sees in profits.

Furthermore, this weakening of investment has occurred despite interest rates that have
been at record lows as well as profits that have soared to record highs. Evidently, firms are
responding mostly to the lack of demand growth in making their investment decisions, which shows
that a strong accelerator effect dominates in the investment function over profitability or cost-of-
capital factors, especially in the long term (see Chirinko et al. 2011; Schoder 2013).

Meanwhile, housing investment – which is generally more sensitive to interest rates than
business investment – had only recovered to levels that would normally be typical of a recession as
of 2014–15.8 The still-depressed level of residential construction is, of course, a reflection of the
severity of a financial crisis in which the housing sector was the epicentre. But the continued
weakness of housing and business investment combined also demonstrates the weak impact of the
monetary policies (both conventional policies, which reached the ‘zero lower bound’ for short-term
interest rates until December 2015, and ‘quantitative easing’ policies designed to lower long-term
yields) that have been the main instruments for trying to restore economic growth since the crisis.
While those policies may have helped to rescue the financial sector and prevent a more severe
depression, they have failed to engender a robust recovery of either business investment or
housing construction.

Unfortunately, fiscal policy has not stepped up to compensate for the weaknesses of private
spending and the relatively ineffective monetary stimulus during the post-crisis period. Of course,
automatic fiscal stabilizers continued to operate, as seen especially in the sharp rise in the US
budget deficit in 2008–9. But only small and short-lived fiscal stimulus policies were adopted under
both the Bush and Obama administrations (although the Obama stimulus of 2009–10 was larger
and more consequential than the minuscule Bush tax rebate of 2008). The government deficit
peaked at about 13 percent of GDP in the third quarter of 2009 (BEA), mostly as a consequence of
the recession rather than the Obama stimulus. Although this surely helped to prevent the economy
from falling into a worse depression, it also led to a political reaction that brought ultra-
conservative Republicans into a dominant position in the Congress following the 2010 elections.
Democrats were not immune to the anti-deficit hysteria, but focused on raising tax rates for the
wealthy rather than cutting spending.

From 2011–15, various austerity measures (spending cuts or ceilings, including but not
limited to the infamous ‘sequester’, as well as reversals of some earlier tax cuts) were imposed as a
consequence of a series of politically-provoked legislative crises and last-minute compromises
reached between Congressional Republicans and the Obama administration. As a result, real federal
government spending actually fell below pre-recession peak levels in 2012–15, unlike in any other
recent recovery period. Thus, austerity policies started putting a severe fiscal drag on the US
economy at a time when the recovery was far from complete.

3.2 Structural causes

Not all of the causes of stagnation tendencies in the US economy lie on the demand side,
and some of the demand-side shifts may reflect deeper underlying causes. Especially, the rise in
inequality and the increasing gap between output and employment growth need to be explained. A
full analysis of the causes of the rise in inequality would be beyond this scope of this article.
However, there are certain structural changes in the US economy that have been important
contributing factors to both the rise in inequality and the emergence of stagnation tendencies,
especially in regard to employment and wages. The most relevant type of structural change in this
regard is the decline in US manufacturing production and the concomitant rise of the service sector.
Declining employment in manufacturing has been driven by a worsening trade deficit in
manufactured goods and the vertical disintegration of manufacturing production – the offshoring of
intermediate goods and assembly operations to lower-wage locations (see Palley 2014). The US
trade deficit in manufactures, which averaged about 6 percent of domestic value added in the
manufacturing sector in the 1980s, fell to an average of 25 percent in the period 2000–14.9 What
remains of US manufacturing needs relatively little labour, as the most labour-intensive operations
have been offshored to other countries as much as possible.

This transformation of the US manufacturing sector has a two-sided effect on labour

markets and inequality. On the one hand, it puts downward pressure on wages, especially because
most of the growth in manufactured imports has come from lower-wage countries such as China
and Mexico. On the other hand, the offshoring of manufacturing jobs directly contributes to the
decline in employment in this sector, which has fallen by 5 million or nearly 30 percent since 2000
(BLS). One recent study finds that increased imports from China alone cost the US somewhere in
the range of about 2.0–2.4 million jobs between 1999 and 2011 (Acemoglu et al. 2016; see also
Scott 2011; Autor et al. 2016). Because manufacturing jobs tend to pay better than jobs in other
sectors on average, it is mainly high-wage employment that is reduced as manufacturing shrinks
and service activities expand. Most of the expansion in services employment in recent years has
been concentrated in lower-paying occupations. In addition, there are two other ways in which the
rise of services as a share of GDP has contributed to weakening the employment impact of output
growth. In regard to business cycles, Olney and Pacitti (2015) argue that a growing proportion of
service industries implies a slower recovery of employment after a recession for two reasons: (1)
service producers don’t need to restock inventories in anticipation of increased demand during a
recovery; and (2) many services are nontradeable, which implies that exports don’t provide as big a
boost in the recovery as they do for goods producers. Using US state-level data, Olney and Pacitti
find that a rising share of nontradeable services has contributed significantly to longer recoveries of
employment after a cycle trough.

For the longer term, Basu and Foley (2013) observe that different service sectors are not
equivalent in terms of their contributions to output and employment. The service sectors that have
‘measureable value added’ create jobs in some proportion to their value added as reported in the
national income accounts. But other services don’t have measurable value added; instead, their
output is imputed in the national income accounts based on income received and is not closely
related to the amount of employment generated. The service sectors without measureable value
added (including, notably, financial services) have grown to the point where they now account for
more than half of GDP. When these sectors’ reported output grows, they don’t necessarily create
jobs in proportion. As a result, employment growth is increasingly delinked from reported output
(GDP) growth. According to Papadimitriou et al. (2013: 10), a one percent increase in US GDP led to
an 0.528 percent increase in employment in the period 1982Q4–1990Q2, but only an 0.42 percent
increase in the latter in 2001Q4–2007Q3 and 0.288 percent in 2009Q2–2012Q4.

4 GLOBAL REPERCUSSIONS

Before the 2008–9 crisis, global growth was sustained by a triangular pattern of trade
imbalances, financial flows and demand transmission among three groups of countries: the deficit
countries or net demand generators (e.g. US, UK), the manufacturing exporters (e.g. China,
Germany) and the primary commodity exporters (e.g. Russia, Brazil). Of course, there were also
reciprocal demand flows in the opposite directions between these various groups of countries as
well as within them (including major imbalances within the euro area), but at a global level net
excess demand largely flowed from the deficits (and borrowing) of the main demand-generating
countries toward the surplus countries that were the chief exporters of manufactured goods and
primary commodities (Blecker 2013, 2014).

During the pre-crisis boom, the manufacturing exporters as well as the resource exporters
ultimately relied on debt-driven household demand from the deficit countries to support their
export-led growth (Hein/Mundt 2013; Palley 2014). The fallacy in this strategy is that it eventually
weakened the very source of its own dynamic by undermining employment and incomes in the
deficit nations that ultimately generate the demand, especially through the reductions in
manufacturing employment and downward pressures on wages noted earlier. Using the US current
account deficit as a measure of the net demand impulse that the US imparts to the rest of the
world, this deficit decreased to about 2–3 percent of GDP in 2014–15, only about half as much as in
2006–7 before the crisis (BEA). The US deficit has been reduced partly because of weak domestic
demand, and also because the large trade deficit in manufactures has been partly offset by
increased surpluses in services and investment income. Smaller US current account deficits imply
less transmission of demand stimulus to the rest of the world. For all the reasons discussed here,
the US is not likely to be as strong a generator of global demand in the foreseeable future as it was
before 2008.

Moreover, the current (as of 2016) slowdown in growth in many regions that are major
markets for US exports (e.g. Euro Area, Latin America) is having negative repercussion effects on US
growth prospects. To avoid sustained global deflationary pressures, therefore, the surplus countries
will need to generate more of their own demand (both internally and reciprocally) and not rely so
much on the US or other deficit countries to be the locomotives of growth in the foreseeable
future.

5 CONCLUSIONS

The US economy is currently locked into a trajectory that implies a tendency toward secular
stagnation as a result of the following (closely interrelated) factors:

• The underlying weakness of household demand due to stagnant real wages and increasing

inequality, no longer offset by unsustainable borrowing;

• Structural changes leading to reduced employment generation in proportion to output growth

and a shrinkage of high-wage manufactures;

• Weak private sector domestic investment in spite of record profits and low interest rates;

• Political gridlock and the imposition of austerity in fiscal policy; and

• Reverberations from foreign slowdowns – especially in the euro area and the resource exporters,
which are key destinations for US exports.

However, there is an important difference between identifying a tendency toward secular

stagnation and making a prediction that (or when or for how long) it will actually occur. Any such
prediction must always be conditional on the absence of counteracting forces. For example, we
cannot discard the possibility of a new technological wave that generates an economic boom, or
the alternatives of a new financial bubble or renewed debtled spending. Indeed, we should not
underestimate either the ingenuity of Wall Street (which was rescued by the bailouts and largely
untamed by post-crisis ‘reforms’) or the short memories of lenders, borrowers and policy makers.
Of course, such a transitory boom would not be any more sustainable than the previous bubbles or
debt-led expansions.

We must also recognize that long-term trends can be interrupted by short-term deviations.
As of early 2016, there were conflicting signals about US economic prospects. On the one hand,
there were some signs that the US had finally entered a self-sustaining expansion, which had
motivated the Federal Reserve’s decision to start raising short-run interest rates in December 2015.
On the other hand, there appeared to be increasing risks of a new recession because of factors such
as the rising value of the dollar (itself partly a function of US monetary tightening), slowing growth
in other countries including major US export markets, and volatility in global stock markets.
Normally complacent institutions such as the Organisation for Economic Co-operation and
Development (OECD) were giving dire warnings of a worsening global slowdown in the absence of
new fiscal stimulus policies (OECD 2016).

One factor that provides some glimmer of hope is the emergence of pressures for an
enhanced role for the public sector on the centre-left of the US body politic. Both progressive forces
and some mainstream elements in the Democratic Party are calling for a new program of fiscal
expansion focused on expenditures on infrastructure investment, solar and wind energy, public
education, and other social and environmental needs. On the other hand, Republican politicians
continue to rehash various conservative schemes for slashing social spending and benefits while
further cutting the taxes of the wealthy and bolstering military spending; as usual, most of these
‘plans’ don’t add up in terms of the claimed deficit reduction. Thus, much depends on the outcome
of the presidential election in November 2016 and the specific fiscal policies pursued thereafter. But
renewed fiscal expansion and increased public investment – even if implemented – will not make a
dent in the long-term trends in inequality and stagnation unless they are sufficient to create a
period of sustained high employment leading to a recovery of wages relative to productivity, and
unless complementary measures are taken to counteract the structural changes that have fostered
greater inequality and jobless growth.
 JURNAL INTERNASIONAL

2. The Japanese Economy: Stagnation, Recovery and Challenges

Japan’s economy is gradually recovering from an era of economic stagnation. It appears to

be back on a path of expansion, albeit one of moderate growth. Trend growth in real GDP and real
GDP per capita has slowed markedly over the past decades. Japan has suffered from decades of low
inflation and actual deflation (Akram 2014, Bernanke 2003, and Garside 2012).

This paper analyzes Japan’s economic challenges in light of the current recovery after the
protracted stagnation and liquidity trap (Akram 2016), ongoing demographic changes, the reforms
of Abenomics and globalization. Section II analyzes Japan’s long stagnation and the recent recovery.
Section III discusses the recent policy challenges.

Section II: An Analysis of Japan’s Stagnation and Recovery

Japan’s economy is undergoing a modest recovery, as evidenced by a nominal GDP (nGDP)

that has been rising since 2013. The country’s nGDP had been essentially flat from the late 1990s to
2007. During the global financial crisis, Japan’s nGDP actually declined, and it remained at this
reduced level until the gradual recovery that started in 2013. This protracted weakness of nGDP in
Japan owes to both weak growth in real GDP and low inflation, or even deflation. Japan’s trend
growth rates of real GDP and real GDP per capita have slowed.

War II until the mid-1990s. Growth rates fell sharply following the bursting of the country’s
asset bubbles in equity and real estate in the mid-1990s, which had been fueled by increased
leverage.

The growth slowdown occurred due to slower growth in employment and labor
productivity. and labor productivity growth have contributed to slower real GDP growth in recent
decades. Growth in labor productivity has declined, whether measured as output growth per
person employed or as output growth per hours worked. Growth in total factor productivity has
also declined. This is the growth in output that is not explained by increases in labor and in capital.
It is generally considered a useful indicator of economic efficiency.

Since 2013, businesses have turned somewhat more optimistic about the future. Machinery
orders and real private nonresidential investment have been

gradually improving. Despite this recovery, Japan’s industrial production is still below the peak it
attained just before the global financial crisis. The country’s industrial production dropped
considerably at the time of the global financial crisis as global demand for advanced manufacturing,
particularly electronics and motor vehicles, fell sharply. Industrial production also fell in the
aftermath of the Tohoku tsunami. The industrial production recovery in Japan has been weak for
many reasons, including the shifting of production and increased competition from other Asian
countries, including China. Manufacturing capacity and capabilities in other Asian countries has
risen significantly. The growth of these markets—and the higher cost of production—makes Japan
less competitive for production and investment. For these reasons, many Japanese corporations
prefer to expand capacity overseas.

Since the mid-1990s, the Japanese economy has been trapped in low inflation and deflation.
The price level, as measured by implicit price deflators for GDP and domestic demand, has declined
from the late 1990s until 2013. Since then, price levels have increased slightly, but core inflation is
still low—markedly below the Bank of Japan’s (BoJ) target of 2.0% annual inflation on a sustained
basis. Core inflation is just barely positive as of late 2018. Occasionally, core inflation rose during
the past decades, but only due to a sales tax rise in late 1998 and again in 2009. As the base effect
of such tax increase wore off, core inflation fell sharply.

Another factor in the lackluster core inflation in Japan has been the weakness of effective
demand. Muted wage growth has also been responsible for the country’s low inflation and
deflation. Prices are a function of wages, markup and labor productivity. Restraints in wage growth
and improvement in productivity have led to low core inflation and deflationary trends in the
Japanese economy. Low inflation and deflationary trends tend to increase the burden of debt.
These trends discourage businesses from borrowing and financial institutions from lending, which in
turn adversely affects investment, business formation, entrepreneurial risk-taking and innovation.

Japan’s population is declining. Its peak population was 127 million in 2009; it is expected to
be less than 108 million by 2050. The country’s population is also aging rapidly. This, combined with
low fertility rates and a fairly limited openness to immigration, is causing Japan’s population to
decline. With an aging and declining population, the country’s working-age population is likely to
decrease as well in the coming years. The fertility rate (i.e., births per woman) in Japan is one of the
lowest among advanced countries. Japan’s fertility rate is less than 1.4 per woman as of 2015,
whereas in the U.S. the rate is around 1.8, and in France it is nearly 2.0. The number of foreign-born
population, as a share of the country’s population, is also very low, reflecting the lack of openness
to immigration. Less than 2.0% of the population in Japan is foreign-born, whereas in the U.S. it is
about 14.5%, and in Australia it is a bit more than 28.0% of the population.

In the past five years, employment growth has exceeded labor force growth. As a result, the
unemployment rate has declined precipitously—to well below 2.5% as of September 2018. The
total labor force participation rate has been falling since the late 1990s. The decline is likely to
continue due to the rapid aging of the population. However, in the past couple years, the labor
force participation rate has risen modestly thanks to a higher female labor force participation rate.
Despite the tight labor market, wage growth has been tepid for several reasons, namely: the
increased flexibility of the labor market; the weaker bargaining position of the trade unions; the rise
of the service sector; the offshoring of production; the globalization of manufacturing; and a rise in
female labor force participation rate, albeit with a persistent male-female wage gap.

Real private consumption has been weak in Japan. Since the mid-1990s, private
consumption has risen an average of merely 0.8% on a year-over-year basis. This is mainly due to
feeble growth in household real disposable income and labor compensation weakness. The increase
in sales taxes from 5% to 8% in April 2014 led to a fall in real private consumption, particularly real
retail sales, following the initial rise right before the hike. The earlier experience of a sales tax
increase in April 1997 had a similar effect, but the decline in 2014 was more severe.

Starting in the mid-1990s, gross fixed capital formation had been flat. Indeed, in the years after the
global financial crisis, gross fixed capital declined. Since 2013, however, fixed capital formation has
shown a gradual and moderate recovery. Japanese corporations do have plenty of cash but have
been reluctant to undertake domestic investment because of the weakness of effective demand,
the deflationary environment, low inflation, heightened uncertainty and diminished expectations of
market growth (Akram 2016). A plausible explanation for the rise of corporate profits amid stagnant
nGDP is that low inflation and deflation has been accompanied by subdued wage growth, along
with a rise in productivity. As a result, labor costs have been held in check and, in fact, sometimes
declined.
 An additional hike of sales taxes from 8% to 10% has been postponed until October 2019. It
is highly likely that a future hike will result in a modest slowdown in real private consumption and
real retail sales. Despite stagnant nominal GDP and lackluster gross fixed capital formation,
corporate profits rose from the mid-1990s to 2008. Corporate profits fell during the global financial
crisis and immediately afterwards between 2008 and 2012.

However, corporate profits have been modestly rising since 2013. Business profits amount
to nearly 25% of national incomes as of 2017. In recent years, exports have fared well due to
overseas growth and a weak yen. However, Japan’s share of global exports has fallen from nearly
9% in 1990 to less than 4% as of 2017. In contrast, China’s share of global exports has risen from
around 2% in the early 1990s to 13% in 2017. Japan’s export sector was quite adversely affected
following the global financial crisis. The country’s motor vehicle exports fell sharply during this time.

Exports of motor vehicles also fell in the aftermath of the Tohuku tsunami. However, motor
vehicle exports have been showing signs of moderate recovery since 2013. The country’s electronic
exports also took a major hit during the global financial crisis. The recovery in electronic exports
since 2008 has been modest. The level of electronic exports remains below its peak prior to the
crisis. Meanwhile, Japan’s economy since the beginning of the 21st century has been increasingly
globalized as reflected in the rise of both exports and imports as a share of nGDP. Japanese
multinational corporations are increasingly engaged in outward direct investment to access
overseas markets and take advantage of the lower costs of production elsewhere.

The country’s export competitiveness had been hampered by the strong appreciation of the
Japanese yen from the late 1990s until early 2012. The yen had appreciated from ¥144/$ in July
1998 to ¥76/$ in January 2012. This large increase in value undoubtedly affected the country’s
export sector. The Japanese authorities’ new policy stance, the BoJ’s expansionary monetary policy,
and low real interest rates have been able to halt and partly reverse the appreciation of the yen.
Japan has been running persistent fiscal deficits since the mid-1990s. Fiscal balance as a share of
nGDP has deteriorated markedly in the 1990s because of automatic stabilizers that were switched
on by the weak economy, in addition to the government’s fiscal stimulus in response to stagnation
and mandated transfers incurred due to social security and medical spending. The country ran large
fiscal deficits from 1998 to 2005 and again following the global financial crisis from 2008 to 2014.
Persistent fiscal deficits have resulted in elevated government debt ratios.Japan’s gross debt and
net debt, as a share of nGDP, have risen from 19% and 64%, respectively, as of 1991, to 156% and
238%, respectively, as of 2018. Japan’s debt ratios are the highest among the major advanced
capitalist countries. Fiscal deficits have stabilized the economy, while periods of fiscal austerity have
slowed consumer spending, business investment and economic activity.

Despite persistent fiscal deficits and elevated government debt ratios, longterm interest
rates on Japanese government bonds (JGBs) are remarkably low. The BoJ has pursued low policy
rates that have resulted in low short-term interest rates, even pioneering a zero interest-rate policy.
The country’s central bank has also aggressively expanded its balance sheet since 2011, purchasing
a substantial volume of JGBs. Low short-term interest rates have been the primary driver of low
long-term interest rates (Akram and Das [2014] and Akram and Li [2018]). This phenomenon is
consistent with Keynes’ (1930 and 2007 [1936]) views on price action in the government bond
market and with the perspectives of modern monetary theory (Wray 2012). Low long-term interest
rates have resulted in low interest payments on government debt and lowered the government’s
debt burden, but this has also reduced the aggregate interest income received by the
nongovernment sector. Low long-term interest rates have not been able to lift gross domestic fixed
investment, which has been soft for decades. In the past few years, however, real private
nonresidential investment has moderately improved due to a slight improvement in expectations
and a view that the policy paradigm might be gradually changing.

Section III: Policy Challenges

Japan enjoys a very good standard of living, one of the highest life expectancies, social
stability, cohesion, low crime rate, democratic institutions and a modern and liberal constitution,
and a remarkably low unemployment rate. However, Japan has suffered in recent decades from low
growth, low inflation (and deflation), and feeble wage growth. Its population is declining and aging
rapidly. The country faces serious challenges. Policymakers have attempted to respond, but the
results have been mixed. The BoJ has been a pioneer in adopting a low and zero interest-rate policy,
an unconventional monetary policy and other innovations. Upon returning to office in December
2012, the government of Shinzo Abe has undertaken a set of policies to reinvigorate growth and
overcome deflation.

These policies, referred to as Abenomics, have three components:

(1) accommodative monetary policy;

(2) fiscal actions; and

(3) structural reforms.

They have had mixed results. Accommodative monetary policy, carried out by the BoJ, has
been able to keep interest rates in Japan extremely low. Outright deflation appears to have ended.
Fiscal stimulus supported economic activity and fixed investments. The increase in sales taxes led to
a temporary increase in consumer spending, but subsequently dampened it. Consumer spending
has yet to fully recover as taxes lower real disposable income. Initiatives on structural reforms have
been rather limited, although the female labor force participation rate has risen due to both policy
actions and moral suasion.

Productivity growth in Japan is important for the country’s future. Labor productivity growth
has declined in recent decades compared to labor productivity growth in past decades in Japan.
However, in recent years, Japan’s labor productivity growth has been favorable compared to other
major advanced countries in the same period. Since Japan’s labor force is shrinking, the country
needs to attain high labor productivity growth that is sufficient to more than offset the decline in its
labor force to ensure increased prosperity in the coming years.

Advances in artificial intelligence, robotic process automation, the Internet of Things and
other technologies could lift productivity. Policy measures designed to raise public and private
investment to enhance Japan’s productive capacity, human capital and the capabilities of its
workforce would also be beneficial. Japan needs to raise productivity and increase the supply of
labor and capital inputs. Efforts to further increase the female participation rate and narrow the
male-female wage gap would be useful. The country needs to be more accepting of foreign-born
workers through immigration and guest worker programs. The

presence of foreign workers would address shortages of workers, mitigate skill gaps, and boost
effective demand. Increased investment in fixed capital, intellectual property and new processes
would be constructive. The authorities need to induce Japanese corporations to invest in Japan.
Corporations have plenty of cash but have been reluctant to invest despite low long-term interest
rates for a variety of reasons, including tepid effective demand, declining population, uncertainty
and expectation of feeble prospects for economic growth.
 Accommodative monetary policy can keep government bond yields low and prevent the
undue appreciation of the Japanese yen. Bernanke (2003) and Krugman (1998) have been emphatic
about the propitious characteristics of monetary easing, strong monetary policy actions, forward
guidance, large-scale asset purchases and overall commitment to raising actual inflation and
inflation expectations. However, although the BoJ has demonstrated that it can target the yield
curve while undertaking stupendous expansion of its balance sheet and committing to low interest
rates and monetary easing, such actions have not had the desired effect.

Even after five years, the BoJ has been unable to attain its inflation target because of the
firms’ price-and-wage-setting behavior and the deeply entrenched inflation expectations. The
evidence would suggest that low interest rates alone are insufficient to generate effective demand
and a rise in core inflation. Low interest rates can have some harmful effects on the private sector’s
interest income, business confidence and economic activity, however. Higher interest rates can
benefit the banking and financial system and do not necessarily retard effective demand and
economic activity (Samuelson 1945 and Kregel 2015). Indeed, low interest rates may be a symptom
of weak aggregate demand. Businesses are willing to borrow and invest if the expected marginal
efficiency of capital is higher than the interest rate. Creditors are willing to lend if the expected
marginal return from lending is greater than the opportunity cost of the alternative use of their
funds. Authorities need to place greater emphasis on fiscal and structural policies to support
effective demand and growth in real disposable income to overcome low inflation and deflationary
trends. The planned hike in consumption taxes—though milder than the previous one—is likely to
be counterproductive amid a moderate recovery. It would be advisable to postpone the hike until
observed inflation overshoots its target for an extended period.

Real wages and real disposable income must rise sustainably for a virtuous cycle of
economic growth. The growth of nominal wages must exceed the growth in labor productivity on an
ongoing basis to produce a sustained increase of core inflation.

The objective of structural reforms should be to boost living standards, human capital and
capabilities. Oftentimes, neoliberal labor market reforms reduce the bargaining power of labor,
while other structural reforms benefit oligopolies and provide protection to vested interests. Fiscal
austerity is often not just welfarereducing, but also ineffectual in achieving the inflation target and
raising effective demand.

The Japanese authorities should become more receptive to new ideas, engage in policy
experiments, and judiciously weigh the balance of evidence to determine the course of action. The
country’s history demonstrates aptly that the Japanese people can achieve common goals under
able and resolute leadership. The point, however, is to set goals and implement actions that serve
the Japanese people and the rest of the world by fostering higher growth and realizing the inflation
target.