An earlier version of this paper was presented to Asian Economic Policy Review conference, Tokyo, October 1, 2010. We thank conference participants for their useful comments, particularly the editors and our two discussants, Chalongphob Sussangkarn and Yuri Sato. We also thank Rizki Nauli Siregar for research assistance. This is a much condensed version of our earlier paper, which also contained more tables and figures. The earlier version is available as an Australian National University working paper.
Indonesian Growth Dynamics
Article first published online: 8 JUN 2011
© 2011 The Authors. Asian Economic Policy Review © 2011 Japan Center for Economic Research
Asian Economic Policy Review
Volume 6, Issue 1, pages 90–107, June 2011
How to Cite
BASRI, M. C. and HILL, H. (2011), Indonesian Growth Dynamics. Asian Economic Policy Review, 6: 90–107. doi: 10.1111/j.1748-3131.2011.01184.x
- Issue published online: 8 JUN 2011
- Article first published online: 8 JUN 2011
- economic crisis;
- growth dynamics;
- policy reform
This paper provides an analytical narrative of Indonesian economic growth over the past two decades. Particular attention is paid to the key economic crisis events of 1997–1998 and 2008–2009, and how and why Indonesia's response to them was completely different. We emphasize and illustrate how the years 1997–1998 were a watershed in the country's economic history and political economy. We underline the country's generally good economic performance, especially the rapid recovery over the past decade, while also highlighting the fact that its economic growth has never quite matched that of the very high-growth East Asian economies. The final section analyzes some key policy challenges, including embedding reforms in a highly fluid political environment, macroeconomic management, and “connectivity” and regional (subnational) development.