1) Indonesia faced severe economic turmoil during the Asian Financial Crisis in 1998, with GDP declining by 13.31% that year. However, GDP growth recovered significantly to over 6% in 2010-2011 after the global financial crisis.
2) Consumption contributes the highest proportion to Indonesia's GDP, followed by exports. Investment and government spending contribute smaller and more variable proportions.
3) While inflation in Indonesia has historically been higher than in peer nations, it has shown a gradual declining trend in recent years as the government reduces fuel and electricity subsidies. Volatile food and administered fuel prices continue to pose challenges.
International Seminar on Indonesia Economic Update Darma Persada University-Japan Sogo Kenkyu Forum at Jakarta, 13 September 2012
http://www.youtube.com/watch?v=c1tcuyqNVbI&feature=plcp
International Seminar on Indonesia Economic Update Darma Persada University-Japan Sogo Kenkyu Forum at Jakarta, 13 September 2012
http://www.youtube.com/watch?v=c1tcuyqNVbI&feature=plcp
For all those interested in "Optimum Currency Areas" - my new infoposter "ECONOMICS" is now available:
- the poster gives an overview of the development of economic theory from its beginnings.
- the poster shows the historical roots of economic ideas and their application to contemporary economic policy debates.
View and order at http://www.cee-portal.at/PrestaShop
Best regards
Martin Kolmhofer
Project on Greece Crisis and Impact for Economic Environment of Business Renzil D'cruz
: Project on Greece Crisis and Impact for Economic Environment of Business
• financial crisis of 2007–2008
• Greek government-debt crisis
• Causes for deteriorated economic
• Tax evasion and corruption
• Unsustainable and accelerating debt-to-GDP ratios
• Impact of the Greece Economic Crisis on India
India’s Crisis Responses and Challenges
Foreign trade has worked as an "engine of growth" in the past, and even in more recent times the "outward oriented growth strategy" adopted by the Newly Industrializing Economies of Asia, including South Korea, Taiwan, Singapore and Hong kang, has enabled them to overcome the constraints of small resource poor under developed economies Notwithstanding a strong belief in Prebisch Singer and Myrdal thesis at some point of time in the history of international economic relations,
the free trade paradigm in the current WTO administered era has thrown open innumerable opportunities for growth.
Inflation in Bangladesh and its Impact on Economic GrowthAkib Al Adib Pranto
Inflation in Bangladesh and its Impact on Economic Growth is a academic presentation slide made and uploaded by the student of Department of Finance, Jagannath University. Here we focus on inflation in Bangladesh, reasons of inflation in Bangladesh, effect of inflation in Bangladesh, and controlling process of inflation in Bangladesh.
Case 12 LEGO Group An Outsourcing JourneyMarcus Møller Larsen.docxwendolynhalbert
Case 12: LEGO Group: An Outsourcing Journey
Marcus Møller Larsen
Torben Pedersen
Dmitrij Slepniov
PROLOGUE
1The last five years’ rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world—the LEGO Group—the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in the company’s roughly 70 years of existence, resulting in a deficit of DKK1.8 billion in 2004, the management had, among many initiatives, decided to offshore and outsource a major chunk of LEGO’s production to Flextronics, a large Singaporean electronics manufacturing services (EMS) provider. In this pursuit of rapid cost-cutting sourcing advantages, the LEGO Group planned to license out as much as 80 per cent of its production, besides closing down major parts of the production in high-cost countries. Confident with the prospects of the new partnership, the company signed a long-term contract with Flextronics. “It has been important for us to find the right partner,” argued Niels Duedahl, a LEGO vice-president, when announcing the outsourcing collaboration, “and Flextronics is a very professional player in the market with industry-leading plastics capabilities, the right capacity and resources in terms of molding, assembly, packaging and distribution. We know this from looking at the work Flextronics does for other global companies.”1
2This decision would eventually prove to have been too hasty, however. Merely three years after the contracts were signed, LEGO management announced that it would phase out the entire sourcing collaboration with Flextronics. In July 2008, the executive vice-president for the global supply chain, Iqbal Padda, proclaimed in an official press release, “We have had an intensive and very valuable cooperation with Flextronics on the relocation of major parts of our production. As expected, this transition has been complicated, but throughout the process we have maintained our high quality level. Jointly we have now come to the conclusion that it is more optimal for the LEGO Group to manage the global manufacturing setup ourselves. With this decision the LEGO supply chain will be developed faster through going for the best, leanest and highest quality solution at all times.”2
PhD Fellow Marcus Møller Larsen, Professor Torben Pedersen and Assistant Professor Dmitrij Slepniov wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ive ...
For all those interested in "Optimum Currency Areas" - my new infoposter "ECONOMICS" is now available:
- the poster gives an overview of the development of economic theory from its beginnings.
- the poster shows the historical roots of economic ideas and their application to contemporary economic policy debates.
View and order at http://www.cee-portal.at/PrestaShop
Best regards
Martin Kolmhofer
Project on Greece Crisis and Impact for Economic Environment of Business Renzil D'cruz
: Project on Greece Crisis and Impact for Economic Environment of Business
• financial crisis of 2007–2008
• Greek government-debt crisis
• Causes for deteriorated economic
• Tax evasion and corruption
• Unsustainable and accelerating debt-to-GDP ratios
• Impact of the Greece Economic Crisis on India
India’s Crisis Responses and Challenges
Foreign trade has worked as an "engine of growth" in the past, and even in more recent times the "outward oriented growth strategy" adopted by the Newly Industrializing Economies of Asia, including South Korea, Taiwan, Singapore and Hong kang, has enabled them to overcome the constraints of small resource poor under developed economies Notwithstanding a strong belief in Prebisch Singer and Myrdal thesis at some point of time in the history of international economic relations,
the free trade paradigm in the current WTO administered era has thrown open innumerable opportunities for growth.
Inflation in Bangladesh and its Impact on Economic GrowthAkib Al Adib Pranto
Inflation in Bangladesh and its Impact on Economic Growth is a academic presentation slide made and uploaded by the student of Department of Finance, Jagannath University. Here we focus on inflation in Bangladesh, reasons of inflation in Bangladesh, effect of inflation in Bangladesh, and controlling process of inflation in Bangladesh.
Case 12 LEGO Group An Outsourcing JourneyMarcus Møller Larsen.docxwendolynhalbert
Case 12: LEGO Group: An Outsourcing Journey
Marcus Møller Larsen
Torben Pedersen
Dmitrij Slepniov
PROLOGUE
1The last five years’ rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy-maker in the world—the LEGO Group—the importance of managing the global supply chain effectively. In order to survive the largest internal financial crisis in the company’s roughly 70 years of existence, resulting in a deficit of DKK1.8 billion in 2004, the management had, among many initiatives, decided to offshore and outsource a major chunk of LEGO’s production to Flextronics, a large Singaporean electronics manufacturing services (EMS) provider. In this pursuit of rapid cost-cutting sourcing advantages, the LEGO Group planned to license out as much as 80 per cent of its production, besides closing down major parts of the production in high-cost countries. Confident with the prospects of the new partnership, the company signed a long-term contract with Flextronics. “It has been important for us to find the right partner,” argued Niels Duedahl, a LEGO vice-president, when announcing the outsourcing collaboration, “and Flextronics is a very professional player in the market with industry-leading plastics capabilities, the right capacity and resources in terms of molding, assembly, packaging and distribution. We know this from looking at the work Flextronics does for other global companies.”1
2This decision would eventually prove to have been too hasty, however. Merely three years after the contracts were signed, LEGO management announced that it would phase out the entire sourcing collaboration with Flextronics. In July 2008, the executive vice-president for the global supply chain, Iqbal Padda, proclaimed in an official press release, “We have had an intensive and very valuable cooperation with Flextronics on the relocation of major parts of our production. As expected, this transition has been complicated, but throughout the process we have maintained our high quality level. Jointly we have now come to the conclusion that it is more optimal for the LEGO Group to manage the global manufacturing setup ourselves. With this decision the LEGO supply chain will be developed faster through going for the best, leanest and highest quality solution at all times.”2
PhD Fellow Marcus Møller Larsen, Professor Torben Pedersen and Assistant Professor Dmitrij Slepniov wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ive ...
BRIEF DISCRIPTION ABOUT PER CAPITA INCOME, THE CORRECT FIGURE IS TAKEN BY WORLD BANK WEBSITE . EVERYTHING IS EXPLAINED RELATED TO PER CAPITA INCOME AND EXPLAIND ALSO WITH GRAPHS, PHOTOS, FIGURES ETC. THIS PPT IS ALSO GOOD FOR THOSE WHO WANTS TO UNDERSTAND ABOUT PER CAPITA INCOME THEY CAN EASILY LEARN AND EASILY UNDERSTAND
Power generation and energy - Electricity Issues in IndonesiaGalih Honggo Baskoro
This is a presentation that I made for my boss since he become a keynote speaker in Thermofluid IV National Seminar @ Gajah Mada University. The presentation give a brief discuss about Indonesia’s latest issues on Macro Economic Perspective and Energy issues. It also discuss how technology could take part on solving electricity issues.
Global growth continues to remain tepid. In US, new data releases are pointing towards a mild recovery, but not compelling enough to force the Federal Reserve to change its monetary policy stance. Labour market is recovering slowly and unemployment rate has continued to decline. On the domestic front, inflation has continued to remain subdued. Given the downward trajectory of inflation and limited upside risks in the wake of benign global commodity prices, the Central Bank chose to cut interest rates by 50 bps in end-September 2015.
In the current issue of Economy Matters, we analyse the growth prospects of Euro Area economies and US economy, in the section on Global Trends. In Domestic Trends, data trends in IIP, inflation, trade and monetary policy are analysed. Corporate Performance section analyses the corporate results for 1QFY16. The Sectoral Spotlight for this issue is on ‘Make in India and the Potential for Job Creation’. In Focus of the Month, the important issue of ‘Financial Inclusion’ has been covered.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
NO1 Uk Rohani Baba In Karachi Bangali Baba Karachi Online Amil Baba WorldWide...Amil baba
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
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Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how can I sell pi coins after successfully completing KYC
Macroeconomic indonesia
1. Macroeconomic
Gross Domestic Product of Indonesia
Indonesia faced a big economic turbulence that trigger economic crisis. Indonesian currency
was pushed down with exchange value above 10.000 per US$. The GDP growth in 1998
went down to minus 13, 31%, substantially lower than the average growth rate in 1960-1971.
This happen because Asian Financial Crisis that also effect other countries such as followed
by Thailand (-8%), Malaysia (-7.4%), South Korea (-5.84%) and Philippines (-0.48%). In the
1999 Indonesia GDP raise to 0.79%, in this period Indonesia established reformation and
economic stabilization program strictly to raise the GDP growth rate.
2. Indonesia GDP growth rate in 2008 increased to 6,01 %, then in the middle of global
crisis GDP growth declined to 4,58 % in 2009. This condition happened because there was an
increasing of oil price in international commerce. Despite sharply falling commodity prices, a
falling stock market, higher domestic and international bond yields and a depreciating
exchange rate, Indonesia GDP growth rate recovered significantly to 6,2% in 2010 and 6,5%
in 2011, which means economic condition in this period has grown. This success was mainly
due to relatively limited importance of Indonesian exports towards the national economy,
maintained high market confidence, and sustained robust domestic consumption. Even
though the GDP has dropped to 4,58%, Indonesia could reach a low inflation rate at 2,78%,
most macroeconomistd believe that the best rate of inflation is somewhere between 0 and 3%.
Slowing economic growth in 2013 (6 percent) was caused by a combination of severe
global uncertainty due to the looming end of the Federal Reserve's monthly USD $85 billion
bond-buying program (quantitative easing) resulting in significant capital outflows from
emerging economies, and internal financial weaknesses: a record high current account deficit,
high inflation (after the government raised prices of subsidized fuels in June 2013) and a
sharply depreciating rupiah exchange rate. In order to tackle these troubles and safeguard the
country's financial stability, Indonesia's central bank raised the country's benchmark interest
rate significantly, at the expense of further economic growth.
3. Composition of Indonesia GDP Aggregate Demand: Household
consumption (C), Government expenditure (G), Investment (I),Exports
(E) , Imports (IM)
Growth sources from aggregate demand side could be estimated by analyzing rate or composition
of GDP according to spending. The composition of GDP consists of household consumption (C),
investment (I), government spending (G), and net export (exports (E) subtract imports (IM)). The
rate of Indonesia aggregate demand can be seen from the figure clearly.
Overall trend, it can be clearly seen that the rate of growth of aggregate demand have a
tendency to decrease. The rate of household consumption (C) remained stable on average
5,35 %, government expenditure (G) still fluctuated, investment (I) showed a downward
trend to 8,50 %, meanwhile, exports (E) reached the lowest point in 2009 then rose rapidly to
14,92 % in 2010. Imports (IM) initially depicted a downward trend from 1961 to 2009 then
increased significantly in 2010.
Investment showed the highest rate in 2008 in 11,89%. However, in 1998- 2007 because of
economic crises investment declined to the lowest rate 1,48 %, as well in 2009 which only
rose to 3,30%. Consumption reached the lowest rate 5,34 % in 2008. Interestingly,
government spending grew positively to 4,65 % in 1998-2007, in which Indonesia suffered
from monetary crisis. In 1998-2007 all component of aggregate demand went down (except
for government expenditure). Monetary crisis in that period has hit the whole component to
4. the lowest point rate. Afterwards, all composition recovered strongly. For exports and
imports, overall trend illustrated the growth rate of import still higher than exports.
In the last ten years (2000-2010), we could also see the role of each composition of aggregate
demand to GDP remained stable. Consumption still contributed the highest proportion to
GDP. The second highest proportion was exports, which means that Indonesia got trade
surplus (exports higher than imports). Investment still showed a stagnant proportion to GDP;
meanwhile government spending contributed the lowest proportion. It could be concluded
that Indonesian economic still depend on the movement of consumption and this was quite
relevant to defend from economic crises, rather than rely on exports like other countries.
5. Money Supply
In general, the central bank noted an increase in the number of circulating M1 and M2 be
836.51% and £ 3364.12 trillion in April 2013. Compare with the same period a year earlier,
M1 and M2 increased respectively by 16% and 15%.
The more amounts of money in circulation then the exchange rate will tend to weaken and
prices will rise. Growth in the money supply is high also often the cause of high inflation due
to the increase in the money supply will increase demand in the end if it is followed by the
growth in the real sector will lead to rising prices.
6. Inflation in Indonesia and CPI
Inflation is an increasing of price generally and continually. Inflation happened because of the
pressured from supply side (cost push inflation), demand side (demand pull inflation), and the
expectation of inflation4. Information about inflation is very important, particularly for policy
maker and firms, because it can affect income distribution. On the other hand, inflation might
influence the decision of firms to invest because of the uncertainty in price.
The level and volatility of Indonesia's inflation rate have historically been higher than in
some peer emerging nations. Whereas these other emerging countries shared inflationary
rates of between three and five percent during the period 2005 to 2013, Indonesia contained
an average annual inflation rate of around 7.5 percent in the same period.
Indonesia Inflation Rate (Annual Percentage Change on Consumer Price Index)
source: BPS
Peaks in Indonesia's inflation volatility correlate with administered price adjustments. Energy
prices (fuel and electricity) are set by the government and therefore do not float according to
market conditions, meaning that the resulting deficit has to be absorbed by subsidies. This
7. puts serious pressure on the government's annual budget deficit and also limits public
spending in more long-term productive matters, such as infrastructure and social expenditures.
Moreover, re-arranging energy subsidies implies political risks as social unrest emerges
inflicted by inflationary pressures. One characteristic of Indonesia is that a large quantity of
its population is clustered just above the poverty line, meaning that a relatively minor
inflationary shock can push them below that line. When the President Susilo Bambang
Yudhoyono administration decided to reduce its massive fuel subsidies in late 2005 due to the
rising international oil price, it soon led to double-digit inflation rates of between 14 and 19
percent (year on year) until October 2006.
Reduction of energy subsidies remain a top priority on the government's agenda. In early
2012, the government proposed a fuel price increase but social unrest and political opposition
in parliament made a sudden increase impossible. Eventually in June 2013, gasoline was
raised by 44 percent to IDR 6,500 (USD $0.66) and diesel by 22 percent to IDR 5,500 (USD
$0.56) per liter. But despite the 2013 price hike, a significant portion of Indonesia's fuel
prices remain subsidized and therefore various international organizations (including the
World Bank and International Monetary Fund/IMF) as well as domestic institutions (such as
Indonesia's Chamber of Commerce and Industry/Kadin) support further subsidy reductions.
In 2013 and 2014, the government has also reduced subsidies for electricity - both for
households (although exempting the poorer segments of society) and industries.
Indonesia's inflation outlook is highly influenced by the decision to further reduce these
subsidies. The World Bank estimates that a IDR 2,000 increase in fuel prices can add about
three percentage points to the level of headline inflation and can add over one percentage
point to core inflation..
Indonesia's characteristic volatile inflation rate causes a traditionally larger deviation from the
annual inflation projections of Bank Indonesia. The consequence of such inflationary
uncertainty is that it creates economic costs, such as the country's higher (domestic and
international) borrowing costs compared to its emerging market peers.
Food prices are traditionally highly volatile in Indonesia and subsequently impose a big
burden on the poorer households who live under or just above the poverty line. These
households spend more than half of their total expenditure on food items. Higher food prices
8. therefore cause serious poverty basket inflation which may lead to increases in the level of
poverty.
Traditional Peaks of Inflation in Indonesia
Discarding administered price adjustments, there are two traditional annual peaks of inflation
in Indonesia. The December-January period always brings higher prices due to Christmas and
New Year celebrations, while the traditional floods in January (amid a peak of the rainy
season) results in disrupted distribution channels in several regions and cities, thus causing
higher logistics costs. The second peak comes in the July-August period. Inflationary
pressures in these two months emerge as a result of the holiday period, the holy Muslim
fasting month (Ramadan), Idul Fitri celebrations and the arrival of the new school year. A
marked increase is detectable in spending on food and other consumables, accompanied by
retailers adjusting prices upwards.
Unemployment Rate in Indonesia
The unemployment rate is the ratio of the number of people who do not have a job but are
looking for one. This data is very important because it has a direct effect to the welfare of the
unemployed, and a signal that the economy may not be using some of its resources efficiently.
During the course of Suharto's New Order, economic development added many new jobs to
Indonesia's job market, thereby pushing down the national unemployment rate. Particularly
9. the industry and services sectors saw major increases in its employment shares towards
national employment, at the expense of the agriculture sector. The graph clearly illustrates
that the unemployment rate remained stable from 1986 to 1993 at average 2,71 %. The Asian
Financial Crisis that erupted in the late 1990s, however, reversed these developments
temporarily and caused the country's unemployment rate to reach over 20 percent, with
underemployment rising equally rapidly.
More than a decade of macroeconomic growth has succeeded in pushing Indonesia's
unemployment rate into a steady downward trend. But, as around two million Indonesians
enter the labor force each year, it will be a challenge for the Indonesian government to
stimulate job creation so that the labor market can absorb this group of annual newcomers.
The table below indicates Indonesia's unemployment rate in recent years. It shows a steady
downward trend.
A characteristic of Indonesia is the unemployment rate is highest for people between the age
of 15 and 24, far above the country's national average. Freshly graduated students from
universities, vocational schools and secondary schools have difficulties finding their place in
the national workforce. Almost half of Indonesia's total number of workers possess a primary
school degree only.
10. Even though economic growth declining, the unemployment rate until February 2013 until
5,92% or declining with unemployment rate in February 2012 which is 6,32%. This decline
actually not really big, only around 440 thousand people from 7,61 million people from
February 2012 become 7,17 million people on February 2013.
From the labor force rate from February 2012 to February 2013 there are 780 thousand labor
force in Indonesia, where in February 2012 labor force is 120,41 million while in February
2013 it increase become 121,19 million people.
Poverty in Indonesia
In line with the decline in the unemployment rate in Indonesia, also reduced the number of
poor people. Based on the latest data from the BPS, the poor in Indonesia in September 2012
as many as 28.59 million people (11.7%) lower than in February 2004, which reached 36.1
million people (16.7%). When compared with the number of poor people in March 2012,
then during the next term decline in the number of poor population of 0.54 million people.
However, keep in mind that the poverty line used in September 2012 amounted to Rp
259.520 per capita per month, an increase of 4.35% compared to March 2012, if we critically
examined it, it did not indicate poor population decreased. As an illustration, based on the
poverty line was set at Rp 259 520 per month, meaning a family that has one child with a
11. single income of Rp 80,000 per month is not said to be poor. In fact, it is clear that family life
is certainly very improper.
Between the mid-1960s and 1996, when Indonesia was under the rule of Suharto's New Order
government, the country witnessed a significant decline in poverty - both urban and rural -
due to robust economic growth and efficient pro-poor programs. During the Suharto period
the number of Indonesians that lived below the poverty line eased from over half of the total
population to 11 percent. However, when the Asian Financial Crisis hit in the late 1990s it
had a devastating impact on poverty alleviation, causing the poverty rate to slip back from 11
to 19.9 percent in late 1998, meaning that much of the New Order's accomplishments had
been reversed.
The following graph provides poverty figures
Source: BPS
The graph above shows a steady decline in national poverty. However, the Indonesian
government applies rather easy terms and conditions regarding the definition of the poverty
line, resulting in a more positive picture than reality. In 2013 the Indonesian government
defined the poverty line at a monthly per capita income of 292,951 rupiah. This amount
equals approximately USD $25 and, thus, indicates a very low standard of living, even for
Indonesian standards. But if we apply the poverty threshold as is used by the World Bank,
which classifies the percentage of the Indonesian population living on less than USD $1.25 a
12. day as poor, the percentages in the table above will rise by a couple of percentage points.
Moreover, according to the World Bank, when taking into account the percentage of the
Indonesian population that lives on less than USD $2 a day, the figure for 2009 rises to 50.6
percent of the population. This shows that a large proportion of the Indonesian population is
in fact near poor. More recent reports in Indonesian media assert that around a quarter of
Indonesians (which translates to around 60 million people) are currently near poor.
In recent years, Indonesian poverty numbers have shown a steady downward trend. It is
assumed, however, that in the future this downward trend will continue at a slower pace.
Most of the Indonesians that rose out of poverty in recent years, were those that lived just
below the poverty line. This means it took less effort to push them out of poverty. But as this
group is slowly narrowing in number, it is now the bottom base of Indonesia's poverty that
needs to be alleviated. This will be more complicated and thus results in slowing rates of
poverty reduction.
Public Debt of Indonesia
Indonesia's public debt as a share of its gross domestic product (GDP) has shown a
significant improvement since the Asian Financial Crisis erupted in the late 1990s. From over
150 percent of GDP in 1998, Indonesia's external debt declined to around 28 percent in 2013.
This represents a healthy condition compared to many developed countries that are currently
in trouble to ease public debt. Similarly, Indonesia's external debt as a percentage of its
exports has shown an impressive decline as well; from 179.7 percent in 2004 to 97.4 percent
in 2011. These numbers measure the government's ability to make future payments on its
debt, thus positively affecting Indonesia's borrowing costs, government bond yields and
international credit ratings when this debt is as low as in the case of Indonesia. This
development is particularly due to the prudent fiscal policy approach of the Indonesian
government and compliance with fiscal rules that set limits on the upper level of debt.
The Indonesian government's external debt consists of bilateral and multilateral loans, export
credit facilities, commercial loans, leasing and government securities (SBN) owned by non-
residents, issued on both foreign and domestic markets. Government securities consist of
government debt securities (SUN) and government Islamic securities (SBSN). Government
debt securities consist of government bonds due more than 12 months and Treasury Bills
13. (SPN) due less than or 12 months. Government Islamic Securities consist of both long-term
security (Ijarah Fixed Rate/IFR) and Global Sukuk.
Largest Contributors to Indonesian Government Debt
Bilateral Loans 31.4%
SBN (non-resident) 22.4%
Multilateral Loans 20.2%
Bonds 18.4%
Source: Bank Indonesia (BI)
As of July 2012 around 40 percent of this public debt is borrowed in US dollars and
approximately 28 percent in Japanese Yen. Indonesia borrows mostly from other countries;
countries that act as creditor account for three thirds of total Indonesian public debt. Most
important creditor countries are Japan and the United States. International organizations
provide around 25 percent of Indonesia's debt, of which the World Bank, the Asian
Development Bank and the International Monetary Fund are the largest contributors. Around
93 percent of Indonesia's government debt constitutes long term debt, meaning that the debt
is due at least one year after the date of indebtedness.
Although in absolute terms Indonesia's government debt has grown by approximately USD
48 billion between 2006 and 2012 (a number which includes debt held by the Central Bank),
as a percentage of GDP it has fallen significantly since the end of the Asian Financial Crisis.
Only sharp nominal depreciation in late 2008 as well as in early 2009 temporarily led to an
increase in the external debt to GDP ratio. The IMF forecasts a further moderate decline in
public debt due to rupiah appreciation, falling interest rates, and robust economic growth.
Future energy subsidy reduction and tax administration reforms in combination with strong
economic growth will support a further decline in public debt. Due to the persistent global
economic turmoil, Indonesia's debt to GDP ratio increased a little in the first half of 2012 to
27.3 percent according to Bank Indonesia.
14. Indonesian Debt to GDP Ratio 2008–2013
Macroeconomic shocks will only have a limited impact on Indonesia's public debt ratio.
Standard stress tests suggest that even under severe shocks from contingent liabilities, sharp
exchange rate movements and higher interest rates, the debt ratio is likely to remain modest.
Fiscal contingent liabilities amounting to 10 percent of GDP could raise public sector debt to
30 percent of GDP by 2016. Currency depreciation of 30 percent would raise the debt ratio to
about 25 percent of GDP. And an increase in real interests rates would have a smaller effect
with the debt ratio reaching around 23 percent of GDP by 2015. Other macroeconomic
shocks will likely have more limited impacts than the ones mentioned above.
Bagan 1 Source: Internation Monetary Fund