Ahead or Behind The Curve?

I identify the word ‘policy’ as an intense word; I define it as to rein a scope of complex problem. The first thing that a policy maker must do is to characterize the complexity of the problem, whether it is to find the ‘causal factors’, the ‘common factors’, or the ‘scenarios’ between factors. In addition , the attempt to know is also including each factor’s magnitude to intensively affect the complex problem and the timing of each factor’s impact; thus, there are two very important words of policy making ‘timing’ and ‘significance’…

Yes, even the act of knowing is a very hard thing to do….

I tried to metaphor policy making as cooking. I have to know the food’s ingredients, the composition, and the process to make the dish. However with a non-analogous condition, in cooking I can try as many times as possible to make the same dish until it tastes good, but in policy making, policies should be implemented as effectively as possible with the best result possible.

Ok now let’s cook….

Do research on the dish: which ingredients are the best, where I can found it, and the composition of the factors. One thing that I believe is best practice not always bring the best result. So, different cook put diverse ingredient depends on, for instance, the climate condition and consumer’s cultural background. After deciding the best composition, then let’s start….timing is very important! If I put the ingredient earlier the dish will be raw, the taste of each ingredient won’t be so delicious (not optimal). Moreover, as an inexperienced cooker, most of the time I put the items too late thus making the dish too cooked. Again, like the early trial the ingredients won’t be tasteful….the effectiveness of the factors is reduced…

Policy making is also an art of knowing and timing…whether we are behind or ahead the curve, we cannot be sure yet…

Associating it with Bank Indonesia’s job, it has to guide public expectation inflation; therefore, Bank Indonesia must implement policy ahead the business cycle, identify the turning point, and choosing the most effective tool to affect the market…Currently, inflation is predicted to be in a downward trend until the third quarter and slightly increased in the last quarter until next year. So, when is the right timing for BI rate drop to stop? Will it be ahead or behind the curve? We will see…

Creativity to Get Rid Boredom

After about 6 months not learning in classroom, I finally experienced the static and hours of learning in BI’s learning center. During sessions, I ask many things to my friend, that is a lecturer, about economics. Rather feeling insecure about this topic since I’m from engineering. The friend of mine, which is slightly old enough to be my lecturer but young-hearted, was very nice to teach many things through scrap papers. I were pretty excited about the next topic, statistics, which I knew about; yet, after the 2nd out of 8 day I was quite bored with the constant intonation of the lecturer. The lecturer was actually smart, but as most statistician I knew aren’t expressive J Me and my friend had a light talk about Personality Plus characters and after that the discussion continued through comic pictures. We took turn in drawing each story box and challenged each other by putting difficult story box to continue.

As you can see that I put several serious topic to talk to through comic’s writing, but we can’t help to tease each other. It was fun that we still laugh each other while listening to the lecturer. Obviously, creativity is useful to save us from being a sleepyhead. We’ll try other things to make us awake in class. Do you have any idea to have fun in class while listening to the lecturer?

An Indonesian facing AEC

It is foretold that AEC will create comparative advantage for each nation so that increase each output. European Union is a proof that economic integration will craft greater confidence of the market. Nevertheless, does every tier of Indonesian people will enjoy the same impact?

ASEAN Economic Community is a concept where there is no border in economic activities among ASEAN countries by freer flow of trade, investment, and human resources. However it has several potential hazards, like unsmooth flow in resources among countries in the union, Indonesia’s decentralization system is still in its ‘baby’ stage, the wages rigidity compared to Vietnam and other country, plus do with different political stances and government policies’ structure a free flow area can be implemented? Won’t it cause an instability and big gap in resources allocation? Economics theory will always say that the unequilibrium of wide gap of prosperity will adapt so that economy will be efficient in the long-run. Nevertheless, do in the complex and globalize economy can made the long-run assumption lasts? Dynamic economy transaction is occurring in many areas that would not cause any long-run stability.

Supportive (familiar) regulations
This type of crutch has been elaborated, researched and even (dare to be) suggested by many international organizations. Among many suggestions that those organizations recommend are minimizing corruption, infrastructure investment and maintenance for trade, law enforcement, clear and protective Act for investors and entrepreneurs, bureaucracy reformation, depleting grassroots subsidy, encourage classical economic theory of the market’s invisible hands, and many others. I believe that the 1st rule of giving well advises am I had to be his/her best friend with empathy. Indeed that fairness and supporting infrastructure for business essentially important. But, do those counselors really have empathy? are they really our best friends? or without any distrust, do they really understand our conditions and cultures? not really I think…

Inhibit excessive capitalism
Taking people’s freedom is currently not from colonialism but through imperialism, like the adaptation of change, right now the war is changing from the borjuis and proletarian to consumers vs. producers. In which, this integration will be the solution. It will create comparative advantage between ASEAN countries make each country focus, yet the different added value each country produce is questionable. Without doubt, it will create efficiency for the alliance; still it will kill the inefficient enough SMEs. For that reason, Indonesia government must compose regulations to protect the ‘not enough’ actors. Decentralization has created an opportunity to do so, that choosing core competence and products with intensive labor (and still checking with other countries comparative advantage) will be a foremost step to take. Along the way, education and health level must be fueled to support the transform our human capital into a primed capital intensive labor. Additionally, technological transfer must be given incentive in the preparation of the 2030’s goal. The attack of monetary crisis is still vividly recalled; thus, stringent watch in the financial market is essentially needed to harness speculators and ensure its stability.

Nationalism that I believe
Our nation has a loose grip in our identity. Many have become individualistic and forgot about our principle of tenggang rasa (helping each other) that jealousy and dubiously create conflict in several areas; yet many are so considerate that it becomes the reason for corruption, collusion, or nepotism. Have we forgotten that our land is so fertile that it can grow anything? or the concept of harmony in our role that our ancestors always teach? are monetary things very urgent for us that the proud of becoming Indonesian only prevent us to become happy? Delayed hunger will not make us die but delayed thinking and believing will… Can’t we be proud in our country that obtains our own freedom? Can’t we be proud that we have so many cultures that it seems to complete each other? Can’t we be proud that many Indonesians are exceptionally smart? Can’t we be proud that we got abundant of legacy in philosophy from our ancestors?.. Proud is useless without understanding the essence.. Does our government really has the nationalism spirit or it slowly decayed? I hope they have because I sincerely believe that it is the groundwork of civil and economic regulations facing AEC

Like some know that now I am the part of the community and government. Maybe this is the enclosing question that I would ask to myself, am I going to be a person that only talks truthfully? or I will also be a person that do what I think and talk with integrity?...

Computational Sociology

I think most of the people reading my blog have interest in ‘human’, human matters that are well-known in social issues like poverty or pop-culture development. Moreover, human matters have motivated several experts to form theories in human behavior that many of it are used to rule in our own society.

A research institute in Indonesia founded by several young prospective scientists has great concern in sociology and this is a tutorial about their works in computational sociology. This is a very resourceful and inspiring tutorial indeed to read and for whom interested in sociology please have the time to visit Bandung FE Institute website (www.bandungfe.net).

The tutorial is written basically in the following scheme:

Sociology = Social Interaction
Sociology is always discussing about the interaction among people that creates community dynamics. Many experts approached sociology to explain the motives of human interaction. Readers may recall theories like functionalism, social trade, structures, marxism, the control of conflict, and symbolical interaction. Accordingly, many neo-theories are based on their predecessors. Then, theories of sociology are modified, combined, or diminished according to the world’s relevancy and the opinion of new-aged philosophers, yet there is a captivating question; where do those theories come from?

Speculation Sociology
For many centuries, sociologist is also called philosopher, yet the philosopher terminology nowadays may have different meaning. Plato is a philosopher of the early centuries who observe community’s behavior (analyze), think about the motive-mechanism-effect, think (again) about the truth of his deduction by observing (again), and after that publicized his findings. With the on-going inventions of statistics or simulations (computational methodology) to test the truth of the deductions, is it still relevant to only think then deduce without proving? Philosopher (for me) is still an out-of-the box thinker, a contempt observer, and a social-sensitive person. Nevertheless, now it’s a new era, science has developed, and change is the only absolute thing; thus, sociologist must not developed theories by speculation. Speculation will only blur the truth and in effect will transform human life into badly chosen life (so, does Keynesian or Marxism ring a bell? :))

Sociology and Physics are the same…
Like many have considered sociology is full of many debatable aspects and those that wins in a debate is the one who have the strongest dialectics, plus I also thought that it is always contextual and very normative. However, computational sociology has made me believed that sociology is the same as physics, it is also science. Science produce theories from social phenomenon, need to be proved empirically, and renew by more accurate theories. The new concept of sociology eliminated my pessimistic opinion in the validity of sociology theories debates. Obviously, in the long term, sociologist (and hopefully us too) aren’t trapped by definitive debates that obstruct community’s understanding. Sociologist will be developing their theories by counterargument of proves against prove. (So do you really still think that the ‘invincible hand’ or socialism is still appropriate to be implemented? :))

Simulation or Statistics
There are many debates in using the method for sociology. Many economists also neo-sociologists use statistics, to find out correlation between variables yet seldom giving the direct causal relationship between it. Moreover, statistics also involved tight assumption that many real world data don’t comply to the method. On the other side, there is an emerging method of simulation in sociology. Simulation basically construct real world issue by capturing it’s mechanism through cause-effect relationship or if logics. Nevertheless, simulation gives the disadvantages of not finding the degree of correlation. The interesting part is ‘neo-simulation’ (please mind me, I make the term myself) is developing towards its integration with biology and physics, like neural network, genetic algorithm, and memetics.

Despite of the ongoing debates, based on my experience in Industrial Engineering department and Techno-Economics interest group, I believed that both must be used to find the pattern and explain the relationship. Both tools will give the benefit to comprehensively understand about the system and its behavior, so that experts can generate theories most suitable to the society. One thing that I most agree with the tutorials is the concept of KISS (KEEP IT SIMPLE STUPID!!) hehe, if we get too involved IN the system then making it as simple as possible is very essential.

Computational Sociology
Computational sociology divided social system based on micro (individual) and macro (community/nation) level. One of the quotes from the tutorial is that ‘A simple micro pattern will emerge to a complex macro pattern’, that is why micro-modeling (or conceptualization) is fairly important for behavior study. Macro behaviors are mostly explained by macro-motives, yet never taking any account of micro-motives that is structured of the phenomena like the commodities-keeper during Ramadhan for price speculation. On the above picture, individual have decision system, behavioral psychology, and exchange theories that provoke each individual behavior or decision. Obviously, a simple reaction from each individual will correspond to the complex behavior of the macro level. The complexity of the macro level is characterized by social structure (the ‘how’ of every phenomenon in the study), like how does a vote occur in 2009 election, and social order, like how come GOLKAR may have higher vote in 2009 election influenced by the risk averse voters.

I believed that computational sociology will open a new path to applicable theory for the society; hence, giving more value to human interactions. Keynes theory of invincible hand and Marx theory of economic class absence have inspired several ideologies (though of its speculation thinking), yet its strength to create better society is still questionable. In a broader view, hopefully ideology like capitalism and communism that are developing in the society nowadays can be justified empirically (thus, truthfully) whether it’s good for the nation or those ideologies are implemented in certain boundaries.

Closing remarks..
I translated this section without major modifications (I like it very much)
Only a simple enclosing, the above picture can be a RABBIT or a DUCK depending from your point of view. We can construct social theory from any side of our main interest, yet it doesn’t mean that social theory is ANYTHING CAN BE TRUE because the picture is IMPOSSIBLE to be an object besides a RABBIT or a DUCK. By strict methodology and comprehensive definition, we can set whether it is a DUCK or a RABBIT, and which social theory is accepted or rejected….

PS. The tutorials are attractive, easy to read, and resourceful..highly recommended to read

Obama: The Audacity of Hope

This interesting translated book was given by a best friend of mine who insisted that this was one of his inspiring books. It was edited from its original title and chapters to attract Indonesian reader; thus, the supposed to be title Thoughts on Reclaiming the American Dream is changed to From Jakarta to White House (Dari Jakarta Menuju Gedung Putih). An intrigued title indeed so that Indonesian readers have a basic unconscious assumption of sympathy with Obama’s book. The publisher has done a good job on marketing it, though they may not be aware of the effect of the reader’s sympathy.

The first chapter is about the world from Obama’s point of view. He described himself as a person born in a multicultural family yet having a firm heart for religion. He elaborates his arguments of USA role in the world and its connection especially with developing countries in Indonesia. He argues that US will certainly interfere with those countries policy since USA depends economically from others (a pretty courageous statement since there are many negative opinions on USA dominance). Nevertheless, he also stated that though USA will always interfere in world’s issue, USA should have interfere in giving the right (appropriate) help and not forcing a country to use the same formula as USA. One of the cases that he explore is USA expansion of Latin American country with different ideology. The regret of forcing them to use USA ideology that made many rebellions against USA is deeply implied in his writings. Accordingly, he argues that USA need stable allies that have the same objective of freedom, democracy, and law based government of that having the same voice of market economy. This type of ally militarily and economically will be absolutely lasts in a longer term than a group of colonialized countries (e.g. The Philipines) of USA imperialism.

In Iraq’s war in another case, he affirmed that he supports war, yet a war with a realistic and comprehensive planning, a very normative and political statement I say. He supported the argument that there was misleading information of 9/11 association with Iraq that guide to this war. His explicit statement is very aggravating because for me, I only believe in war for freedom and truth that only Muhammad did for jihad, and still Mahatma taught us to do peace demonstration or strike.

Despite our disagreement, several activities and experiences that he wrote made me evaluate him as an open-minded man with the bravery to be honest (a quality that not every politician has, especially in America). The writing style also corresponds the fact that he also embraced others differences and the world’s humanism.

He is a great man for sure, yet I never know how does a politician feel and thinks, since I always thought that politician is a profession that pleases everyone so that to have their disguised interest. Obviously, Obama has created hope to the world’s citizen of a ‘new’ America.

I’m craving for the opportunity to read Hillary’s autobiography, yet I have no intention reading Bush’s.

A note to me: How can you read about Obama while you haven’t read Muhammad and Soekarno?
I’m very a shame…Can anyone borrow me those books?