The document discusses Indonesia's economy. It notes that Indonesia has a well-structured economy due to balanced development across industries. While agriculture historically contributed significantly to GDP, the industrial and services sectors have grown. The economy relies on agriculture, manufacturing, and services for growth. It discusses recommendations to enhance key sectors like improving market access for agriculture, permitting foreign investment in manufacturing, and increasing support for education to develop the services sector. The conclusion is that Indonesia has grown strongly but faces challenges improving livelihoods, health, education, and regional interconnectivity to support domestic supply chains.

2. Chapter 1
Introduction

3. OVERVIEW OF THE ECONOMY
The Indonesian economy is well structured
thanks to a balanced development of its industries.
Agricultural or primary sector continues to
contribute to GDP growth quite significantly.
Industrialization occurred from mid 1980s onwards
and manufacturing overtook in terms of GDP the
primary sector beginning of 1990s. Within the next
decade services sector experienced rapid growth and
has meanwhile reached over 40% of GDP while
employing one third of the work force.
Diversification in export of non-oil and gas
commodities strongly emerged from new
industrialization and became a strong push factor of
Indonesia’s economic growth.

4. ECONOMIC STRUCTURE
Indonesia’s economy has weathered a global
economic downturn twice (1997-98 and 2008). The
economy vastly relies on the agriculture, or
manufacturing and services sectors for growth. Due
to several natural disasters, political and social
disturbances and terrorist activities, the economy
has been through significant changes in the last few
decades. These also led to less development
employment opportunities, forcing a big chunk of
the population to find employment in neighboring
nations, especially Malaysia.

6. While growth forecasts are trimmed from the Asian
Development Outlook (ADO) 2014 in April, optimism about
timely reform by the incoming government and a better
outlook for exports next year suggest that growth will
accelerate by 0.5 percentage points in 2015.
Inflation ebbed in the first 8 months as the impact of
a hike in administered fuel prices in June 2013 faded and
the good harvests kept food price inflation low. For 2014 as
a whole, inflation is now seen averaging 5.8%, slightly above
the earlier forecast. The new government is expected to
reduce fuel subsidies in 2015, which should free
considerable budget funds for infrastructure and social
development, though it will temporarily push inflation to
6.9%, above the earlier projection.

7. TRADE STRUCTURE
Indonesia is ranked 69 with an
Economic Complexity Index (ECI) of -
0.0199196
Indonesia is the top exporter of palm oil,
soap, coconut oil, margarine, raw tin,
non- iron, steel slag, ash and residues,
nickel ore, aluminum ore and lignite.

8. Top 5 Products exported by
Indonesia
Coal Briquettes (12%),
Petroleum Gas (9.3%),
Palm Oil (8.3%),
Crude Petroleum (5.9%),
Rubber (4.1%)
Top 5 Products imported by
Indonesia
Refined Petroleum (15%),
Crude Petroleum (5.5%),
Planes, Helicopters, Spacecraft (2.4%),
Vehicle Parts (1.8%),
Cars (1.5%)
Top 5 Export destinations of
Indonesia
Japan (15%),
China (12%),
Singapore (9.1%),
United States (8.4%),
South Korea (7.2%)
Top 5 Import origins of Indonesia China (16%), South Korea (6.9%),
Malaysia (6.1)
Japan (11%), Singapore (14%),

9. THEORIES AND APPROACHES OF
ECONOMIC DEVELOPMENT
a. Neocolonial Dependence Model
b. Sen’s Capabilities Approach
c. Harrod- Domar Growth Model
d. Rostow’s Stages of Growth
e. Structural Change Model
f. Lewis Model
g. Agriculture and Employment based Strategy

10. VISION 2025
The researchers wants to achieved the following
goals in year 2025.
1. Increase the expansion of value chain for industrial
production process
2. More universities.
3. Increase in efficiency of the distribution network of
products in manufacturing and agricultural sectors
4. Globally competitive
5. Largest producer of renewable resources.

11. Increase the expansion of value chain for industrial
production process.
 Lewis Theory of Development
It became the general theory of the development
process. It states that the structural change of
economy will help to develop it.
 Structural Change Theory
It focuses on the mechanisms by which
underdeveloped economies transform their domestic
economic structures from a heavy emphasis on
traditional subsistence agriculture to a more modern,
more urbanized and more industrially diverse
manufacturing and service economy.

12. More universities.
Harrod- Domar Growth Model
It states that the more capital investments
from the national income will help to develop
the economy of a country.

13. Increase in efficiency of the distribution network.
Globally competitive.
 Neocolonial Dependence Model
It attributes the existence and continuance of
underdevelopment primarily to the historical evolution
of a highly and equal international capitalist system of
rich country, poor country relationship.
 Sen’s Capabilities Approach
Think beyond the availability of commodities and
consider they use to address their functions.
 Agricultural and Employment Based Strategy

14. Largest producer of renewable resources.
Structural Change Theory
It focuses on the mechanisms by which
underdeveloped economies transform their
domestic economic structures from a heavy
emphasis on traditional subsistence agriculture
to a more modern, more urbanized and more
industrially diverse manufacturing and service
economy.

15. CHAPTER II
EXISTING SITUATION OF KEY
ECONOMIC SECTORS IN INDONESIA

16. EXISTING STATUS OF
KEY ECONOMIC SECTORS
Primary Sector.
While being the biggest employment sector of the
country, agriculture includes three types of farming. Some of
the major produce of Indonesia includes rice, tea, coffee, cocoa,
spices, rubber, copra, peanuts, eggs, pork, poultry and palm oil.
Some crops are cultivated mainly due to the even distribution
of rainfall and consistent monsoon climate in Indonesia. The
country is the 4th largest producer of rice and coffee in the
world. It exported 271,000 tons of coffee in 2010.

17. Secondary Sector.
The manufacturing sector of Indonesia contributes 27.9%
to the country’s GDP. The industrial production rate in the country
stood at 2% as of 2009. Some of the major industries in the country
are petroleum refinery industry, liquefied natural gas, textile
leather products and footwear, wood and wood products, paper
and printing products, cement and non-metallic quarry, iron, steel
and other basic metals, transport equipment, machinery and
apparatus, and other manufacturing industries.
Tertiary Sector.
With 38.5% contribution to the country’s GDP, the services
sector remains a pillar of Indonesia’s economy. The growing IT
services sector was impacted to some extent by the global economic
downturn in the late 2000s. The country’s hospitality industry is a big
booster of the economy.

18. CHAPTER III
RECOMMENDATIONS ON THE
EXISTING KEY ECONOMIC
SECTORS OF INDONESIA

19. A. AGRICULTURE SECTOR
1.) Areas of Developmental Concerns
 Lack of market information and distribution channels.
 Lack of capital to finance agricultural activities.
 Preference of poor Indonesians to choose fishing over
agricultural activities.
2.) Possible Areas of Enhancement
 Encouraged to undertake garden farming to farm crops for
their consumptions.
 Training and education of farmers
 Helping island farms to secure funding their agricultural
activities.

20. B. MANUFACTURING SECTOR
1.) Areas of Developmental Concerns
 Lack of equipment and machineries in processing of
construction products
 Low investments in production of motor vehicles
 Low investments in the workforce
 Mine flooding
2.) Possible Areas of Enhancement
 Permission to enter the foreign investors or capitalist
 Import the updated technology in coal mining facilities
 Invite multi- national companies and investors to invest in
production of different vehicles to enhance the technology
production

21. C. SERVICES SECTOR
1.) Areas of Developmental Concerns
 Lack of education
 Low skilled workers
 Insufficient experiences in line with their attained education
 Inequality in jobs
2.) Possible Areas of Enhancement
 Support universities
 Secure funding for education
 Increase productivity
 Trainings and seminars
 Balanced number of awards provided to men and women

22. CHAPTER IV
RESEARCH FINDINGS
and
CONCLUSION

23. A. Research Findings
The researchers findings are based on the data and
information gathered.
• Indonesia economy is well- structured.
• Agricultural or primary sector continues to contribute
to GDP growth quite significantly.
• Use a balance of multi-bilateral cooperation mode.
• Financial macroeconomic policy makes resilient the
global financial crisis of Indonesia in 2008-2010.
• Indonesia’s recent economic growth is based in
domestic consumption.
• Indonesia improved energy supply through increased
use of renewable forms of energy.

24. B. Research Conclusion
The researcher would like to conclude the following to
become fully developed country the Indonesia.
• Indonesia has grown strongly since 2010.
• The government also faces the challenges of quelling
labor unrest.
• Indonesia increase the energy production as their
national priority.
• Indonesia wants to maintain the food security.
• Indonesia would like to improved each livelihood
opportunities and improved health and education
development outcomes.
• Indonesia government need to improve
interconnectivity across regions within the country to
help reduce logistic costs to support domestic supply
chain.