Alfian, Jakarta – Two researchers from the Indonesian Institute of Sciences (LIPI) proposed Saturday public policy models to tackle wide economic differences in the country.

Hari Susanto and Jusmaliani spoke at a ceremony that installed them as new research professors in regional economics and industrial economics respectively at LIPI.

Hari said the income gap among Indonesians had widened during the period 2002 to 2006. "A study from Bank Indonesia found that Indonesia's Gini ratio was close to 0.4, which means the income distribution gap has increased," said Hari.

The Gini coefficient, developed by Italian statistician Corrado Gini, is a measure of the inequality of wealth distribution ranging from 0 to 1. The higher the coefficient, the more unequal the wealth distribution. In the period between 1987 and 2002, Indonesia had an average Gini ratio of 0,328. Hari said the gap could be easily seen in daily life.

"Some 30,000 villages from a total of 70,611 in Indonesia are categorized as underdeveloped, while cases of malnutrition can be found in seven provinces," he said. "On the contrary, around 55,000 Indonesians have money stashed away in Singapore, amounting to nearly Rp 800 trillion (US$, which is more than the 2007 state budget."

Juliani said there was also an obvious gap in access to economic resources, despite the fact Indonesia had already implemented Law No. 5/1999 on the Prohibition of Monopoly and Unfair Competition. She gave an example from the retail business sector.

"The opening of the modern retailer market has caused the death of small and traditional retailers," she said. "Modern retailers, with their powerful capital, can easily control suppliers while traditional retailers do not have the same ability."

Both Hari and Jusmaliani proposed solutions to tackle the economic discrepancies in the country. Hari suggested the reformulation of the decentralization policy to reduce the wealth gap among Indonesian provinces. "The regional autonomy policy should not be generalized to all provinces because each province has different conditions and different natural and human resources," he said.

"The central government, for example, could delegate most of its authority to the West Java provincial administration as it is rich in both natural and human resources. "On the other hand, it should monitor and guide the Riau provincial administration, as Riau has limited human resources to manage its rich natural resources."

Meanwhile, Jusmaliani recommended the adoption of principles of equality in business. "We should prevent the concentration of business ownership to just one hand," she said. "Companies with assets reaching the gross regional domestic product of its region should share ownership with the local people. "This practice will create a sense of belonging among local residents with the business."

Jusmaliani and Hari were the 206th and 207th researchers to be inducted as research professors since LIPI began to grant research professorships in 2005. Researchers do not need post-graduate degrees to become research professors. However, they need to have written a considerable number of research papers that have been published in international scientific journals.