Indonesian Industrialization

This paper examines Indonesia.s industrialization performance and policies, including its latecomer status, its generally rapid growth since the mid-1960s, its pronounced policy and performance episodes, and its ambivalent embrace of globalization. Particular attention is accorded to the deep economic-political crisis of 1997.98 and its aftermath, with the benefit of a rich, firm level database. The crisis resulted in slower industrial growth, less industrial mobility, and sluggish formal sector employment growth. We also consider some of the general analytical and policy implications for developing country industrialization from the Indonesian experience.Indonesia, industrialization, economic crises, jobless growth

Economic Reforms in Indonesia after the 1997/98 Economic Crisis

This paper reviews the experience of undertaking reforms in Indonesia after the economic crisis 1997/98, focusing on the reforms made under the last two presidents : Megawati and Susilo Bambang Yudhoyono. The review leads the paper to draw some lessons from the experience. Among other, the role of IMF in disciplining the policy direction, and hence the reforms, is quite evident. This is in the light of dramatic change in the political economy of decision-making process after the crisis, where the power was shifted from the president to the government. The paper also finds that one important constraint for delivering a successful reform is nationalistic ideology which strongly opposes the mechanism for moving towards more efficient market. Meanwhile, in practical terms, the change in political architecture seems to have contributed to the coordination problems across the governmental agencies and ministries, which leads to slow progress in the policy implementation.Indonesia, Organisation of government, IMF

Economic Reforms in Indonesia After The 1997/98 Economic Crisis

This paper reviews the experience of undertaking reforms in Indonesia after the economic crisis 1997/98, focusing on the reforms made under the last two presidents - Megawati and Susilo Bambang Yudhoyono. The review leads the paper to draw some lessons from the experience. Among other, the role of IMF in disciplining the policy direction, and hence the reforms, is quite evident. This is in the light of dramatic change in the political economy of decision-making process after the crisis, where the power was shifted from the president to the government. The paper also finds that one important constraint for delivering a successful reform is nationalistic ideology which strongly opposes the mechanism for moving towards more efficient market. Meanwhile, in practical terms, the change in political architecture seems to have contributed to the coordination problems across the governmental agencies and ministries, which leads to slow progress in the policy implementation.Indonesia, Organisation of government, IMF

Power, Ownership and Tourism in Small Islands: evidence from Indonesia

This paper examines the political economy of tourism development in islands and uses Gili Trawangan, Indonesia as a case study. A longitudinal study drawing from fieldwork contributes to the discussion of how different types of power shape community development, and how the effects of hosting international tourism play an explicit role. Analysis using Barnett and Duvall’s Taxonomy of Power model reveals the interplay between the types of power over time and its effects on different actors. Results raise questions for Less Developed Countries, and particularly islands, concerning the social costs of using tourism for development

Growth and welfare in mixed health system financing with physician dual practice in a developing economy: a case of Indonesia

Based on Indonesia’s hybrid BPJS Kesehatan health system, we analyze for welfare-optimal government financing strategy in an economy with a mixed health system using an endogenous growth framework with physician dual practice. We find the model solution to produce two vastly different regimes in terms of policy implications: a “high” public-sector congestion regime as in the benchmark case of Indonesia, and a “low” public-sector congestion, high capacity regime. In the former, welfare-optimal health financing strategy appears to be promoting private health service. In contrast, in the low-congestion, high capacity regime, a welfare-optimal strategy is to do the opposite of increasing government physician wage at the expense of private health subsidy. These results highlight the importance of developing a benchmarking system that measures the actual degree of congestion faced by the public health service in a developing economy, as it ultimately would influence the optimal health financing strategy to be pursued