[Unpad.ac.id, 2/02/2016] Banking sector in Indonesia is preparing for implementation of ASEAN Economic Community (AEC). Competition that would naturally occur in MEA has forced Indonesian banks to show competitiveness with all ASEAN region banks. Other business sector is also required to show competitiveness to continue thriving. Even state and local government will rearrange growth strategy of competitiveness in macro level.
Professor of Faculty of Economics and Business (FEB), Prof. Dr. Rina Indiastuti, S.E., M.SIE., said that most banks in Indonesia is considered inefficient. “The efficiency was assessed on how to achieve maximum performance targets for a certain fee,” said Prof. Rina in this interview.
Performance measures are size of income, net margin, or other sizes. Cost control should be done not in sense of frugality but in ensuring that certain costs have been calculated to generate maximum performance certainly will not enlarge when its realization.
According to Prof. Rina, there are three basic parameters that banking must be in possession of to ensure growth of competitiveness that is capable of creating a vast market and strengthen the position of the measured easily accessible, deep and efficient. Banks should be widely accessible by all parts of society and able to increase number of people’s savings and lending to public. The process of improving performance indicators will facilitate market expansion and competitive position in MEA.
This Professor in Industrial Economics and Banking explained that in addition to having three basic parameters as prerequisite, banks also have to focus on characteristics and economic and social potential in business environment. This point is often overlooked in process of building banking competitiveness. The absence of fit in with dynamics of the business environment constrains the increase in competitiveness of Indonesian banks.
As agent of development, function of banking is to collect funds from public to be channeled for development financing. Increased intensity of construction activity is expected to improve income and quality of life.
Banking can serve as a measure of the progress of a region. The indicator is seen by the extent of how banks increasing productivity of earning credits in their work area. Referring to definition of bank as agent of development, at least, said Prof. Rina, credit can grow so productive entrepreneurial sector will also increase.
With the analogy, Prof. Rina concludes that improvement of competitiveness is integration of economic and social development, including development of human capital as a key factor.
“Competitiveness is aggregation of all elements. This aggregation starting from economic and social integration, “said the Professor who was born in Kediri, January 10, 1961.
The integration of economic and social aspects becomes element of human potential development. Leaders of the state, business and we from education field must begin to unravel the strategy of building a global ‘talent value chain’, minimum at level of ASEAN to accelerate growth in competitiveness.
Integration is deemed crucial in facing challenges of global competition. In a study conducted by Prof. Rina, human capital factor is empirically proven to be key determinant of competitiveness development and economic growth.
However, this researcher in the Financial Stability Research Forum of Bank Indonesia said that efforts to improve human capital driving competitiveness and growth have values if it is able to guarantee success of job creation and ensuring that more productive workforce.
“If we build human but create unproductive employment environment or even unemployment, it will distort the socio-economic development itself,” said Prof. Rina, who is also a member of Review Team National for Industrial Policy 2011 – 2035, under the Ministry of Industry.
Development based on Knowledge
Speaking of competitiveness increase in mid and long term, Prof. Rina explained that the strategic moves are to proceed with new studied aspects, to set improvement, and to manage risk. These three aspects can be done based on knowledge.
Process and educational materials must be able to adapt to the dynamics faced by businesses, government, and society. This is the emphasize, especially in higher education sector, to be able to contribute to human development and nation building, along with education for future prosperity motto.
According to Prof. Rina, lecturers should be able to give an overview to students about the changes that will occur in the future. Students are expected to be ready to face challenges that will occur in the future. Challenges of lecturer research activities are, among others, to be able to predict the needs of community and the state of the present and the future.
Thus, Prof. Rina concluded that education could improve welfare of society. “Therefore the constituted competitiveness is increasingly realized,” concluded Prof. Rina. *
Reported by Arief Maulana / eh
