Impacts of tariff rates on input source choice: evidence from Indonesia

This study empirically examines how a reduction in input tariffs changes firms’ choices between domestic and foreign inputs. In order to do so, we employed Indonesian manufacturing surveys from 2002 to 2010, and from there, computed the share of imported inputs among total inputs at the firm-pr oduct level. With this dataset, we examined the effect of preferential tariffs for ASEAN countries, that is, ASEAN free trade area (AFTA) tariffs. Our findings can be summarized as follows: First, we found that a reduction in AFTA tariffs in Indonesia encouraged plants to raise their share of foreign inputs. Second , such an effect of AFTA tariffs was observed only for indigenous plants, or those whose primary sales m arket is the domestic market. Third, we found that the more productive plants experience a greate r impact of AFTA tariffs on foreign inputs. In short, the reduction in AFTA tariffs encouraged input realloca tion, at least in some specific firms in Indonesia

Improving Human Capital through Better Education to Support Indonesia’s Economic Development

Despite Indonesia’s impressive economic growth, it still lags behind other countries with a similar income level in terms of the quality of its human capital. This paper argues that one key factor explaining this low quality of human capital relates to the lack of focus and clear strategies to develop its education system. This paper attempts to assess Indonesia’s current state of human capital development with particular focus on its education sector. In order to benefit from its demographic bonus, Indonesia needs to to improve its current education and skill training system. Better education and skill training system will support the country’s effort to reduce poverty and youth unemployment. The effectiveness of public spending in education should be improved to raise the quality of education. Indonesia needs to integrate its human capital development plan with its economic master plan

The Indonesian Economy in Transition - Policy Challenges in the Jokowi Era and Beyond Introduction

It is now more than twenty years since one of the most decisive and important turning points in Indonesian economic and political history. The year 1998 was one of exceptional turbulence, hardship and uncertainty. The seemingly impregnable Soeharto presidency came to a sudden end on 21 May. The economy and the currency were in free-fall, while an acrimonious relationship had suddenly emerged with international financial institutions. There were nasty episodes of conflict, mostly with serious ethnic undertones. Almost a million of the country's citizens were internally displaced. There were various "Yugoslav" scenarios of territorial disintegration. Most important of all, there was no institutional roadmap to guide the country through the vacuum that Soeharto's hasty exit had created

The Indonesian Economy from the Colonial Extraction Period until the Post-New Order Period: A Review of Thee Kian Wie’s Major Works

This paper reviews some major works of Thee Kian Wie, one of Indonesia’s most distinguished economic historians, that spans from the Colonial period until the post-New Order period. His works emphasize that economic history can guide future economic policy. Current problems in Indonesia were resulted from past policy failures. Indonesia needs to consistently embark on open economic policies, free itself from "colonial period mentality". Investment should be made in rebuilding crumbling infrastructure, improving the quality of health and education services, and addressing poor law enforcement. If current corruption persists, Indonesia could not hope to become a dynamic and prosperous country

Laporan Tahunan Kedeputian Bidang IPSK-LIPI Tahun 2007

VII, 236 hlm, 24 c