Indonessia_ An Emerging Economy

1. Indonesia
(An
Emerging
Economy)

2. Indonesia
Export
Commodi1es
• Oil
and
gas
• Electrical
appliances
• Plywood
• Tex;les
• Rubber
Indonesia
Import
Commodi1es
• Machinery
and
equipment
• Chemicals
• Fuels
• Foodstuffs

3. Indonesia:
Introduc;on
It
is
an
archipelago
with
over
238
million
people,
and
is
world’s
4th
most
populous
na;on.
Ø
Indonesia
currently
targets
a
2012
budget
deficit
of
190.1
trillion
rupiah,
on
capital
spending
of
168.8
trillion
rupiah
Ø
As
exports
have
fallen
in
the
current
slowdown
of
world
economy,
the
main
thrust
of
Indonesian
government
is
to
boost
domes;c
consump;on
and
investment.
Ø
Southeast
Asia's
largest
economy
may
expand
at
the
lower
range
of
Bank
of
Indonesia's
forecast
of
about
6.3
per
cent
to
6.7
per
cent
in
2012
Ø
Investment
and
domes;c
consump;on
in
Indonesia
contributed
87%
to
the
country’s
growth
in
the
1st
quarter
of
2012.
Ø
Standard
&
Poor's
kept
Indonesia's
ra;ng
unchanged
at
BB+
Macro
economic
view
of
Indonesia

4. Period of 1961 - 1970
Ø initiation of Indonesian independence
Ø huge chaos of social and politics
Ø economic only grew on average 3,94%, even in 1963 touched minus 2,24%
Ø inflation rate on average touched the highest point (194,02 %)
Period of 1971 - 1997
Ø government
concentrated
to
improve
people
welfare
through
economic
development
by
recovering
economy,
social,
and
poli;c
situa;on
Ø increase
economy
rate
of
growth
to
7,
44
%
in
1971-­‐1981,
5,
51
%
in
1981-­‐1990;
and
6,
88
%
in
1990-­‐1997
respec;vely
Ø great
revenues
from
oil
export
when
oil
boom/
oil
crises
occurred
Period of 1998 - 2007
Ø faced
a
big
economic
turbulence
that
trigger
economic
crisis
Ø Indonesian
currency
was
pushed
down
with
exchange
value
above
10.000
per
US$.
Ø The
GDP
growth
in
1998
went
down
to
minus
13,
31%,
substan;ally
lower
than
the
average
growth
rate
in
1960-­‐1971
In this period Indonesia established reformation and economic stabilization
program strictly to raise the GDP growth rate.
Period of2008 - 2010
Ø GDP
growth
rate
in
2008
increased
to
6,01
Ø GDP
growth
rate
recovered
significantly
to
6,
10
%
in
2010
Ø infla;on
rate
was
not
too
high

5. The biggest contribution was from manufacturing industry with average contribution around 27,4 %
Ø GDP growth in Indonesia continued to grow significantly, although a few years ago, suffering from shock (negative growth
of GDP). This is evidenced by increasing the real value of Indonesia's GDP from year to year
Ø Inflation rate in Indonesia despite fluctuating but it is still maintained and quite well controlled by government to support
good economic performance. This can be seen from the exchange rate and prices of goods remained stable in recent years

6. Challenges:
Ø
Corrup;on.
Though
figure
of
Indonesia
in
the
corrup;on
percep;on
index
has
improved
from
2.8
in
2010
to
3.0
in
2011,
much
s;ll
need
to
be
done.
Ø
Unemployment rate is still quite high, although there is a tendency to decline
in the last 5 years. Work participation rate is still pretty good (above 60%), and
the employment rate has reached above 90% of the total labor force.
Ø Domestic consumption and exports remains the largest contributor to
Indonesia's GDP and this needs to be improved, particularly for domestic
consumption. As we know, high domestic consumption is quite good in warding
off the economic crisis because national economy is not too dependent on the
influence of foreign markets

7. Conclusion
Ø GDP growth in Indonesia continued to grow significantly, although a few years ago, suffering from shock (negative
growth of GDP). This is evidenced by increasing the real value of Indonesia's GDP from year to year
Ø Inflation rate in Indonesia despite fluctuating but it is still maintained and quite well controlled by government to
support good economic performance. This can be seen from the exchange rate and prices of goods remained stable
in recent years