IDEAS home Printed from https://ideas.repec.org/a/taf/bindes/v45y2009i1p9-38.html
   My bibliography  Save this article

Survey of recent developments

Author

Listed:
  • Anton Gunawan
  • Reza Siregar

Abstract

Two major elections and the increasingly severe global financial crisis (GFC) will dominate politics and economics in Indonesia in 2009. The parliamentary election will be held in April, followed by the presidential election in July. The public is now experienced at voting, and these events are expected to be peaceful and successful. The impact of the GFC is of much greater concern. The economy continued to perform well in 2008. With quite robust economic growth, commendable progress with administrative reform in the finance ministry, and higher than expected oil prices, both tax and non-tax revenues significantly exceeded their 2008 budget targets, leaving the government with unspent funds in excess of Rp 50 trillion. The banking sector also performed well, with lending continuing to expand rapidly. However, there was a significant fall in average capital adequacy as banks took on more risky assets and wrote down their capital in response to falling bond portfolio values. Signs of economic slowdown began to emerge in the second half of 2008, however. The collapse of the global financial services firm Lehman Brothers in September sparked massive sell-offs on stock exchanges and foreign exchange markets around the world, including in Indonesia. In the fourth quarter the disruption in the global economy finally hit Indonesia's real sector. General slowdowns were felt in both the tradable and non-tradable sectors, although the quarterly data were distorted by strong seasonal effects. The robust annual growth of non-oil and gas exports over the last four years came to an abrupt end in the fourth quarter, but the same was true of imports. Thus, although the GFC and a weak rupiah are likely to have a negative impact on export-oriented and high import content industries in 2009, potential balance of payments pressures are more likely to originate in the capital account than in the current account. With a growing expectation that the GFC's impact would intensify, a wide range of fiscal, monetary, finance and trade policy packages were announced in recent months. Financial sector safety net policies were given high priority initially, with the primary aim of supporting the balance of payments rather than avoiding worker lay-offs. Subsequently, fiscal stimulus packages have been introduced, expanded and modified, and the official stance of monetary policy has become more expansionary. However, institutional shortcomings and political bottlenecks seem likely to constrain the effectiveness of these policies as a whole.

Suggested Citation

  • Anton Gunawan & Reza Siregar, 2009. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 45(1), pages 9-38.
  • Handle: RePEc:taf:bindes:v:45:y:2009:i:1:p:9-38
    DOI: 10.1080/00074910902836148
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00074910902836148
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00074910902836148?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006," Policy Research Working Paper Series 4280, The World Bank.
    2. Bank for International Settlements, 2003. "Fiscal issues and central banking in emerging economies," BIS Papers, Bank for International Settlements, number 20.
    3. Reza Siregar & Siwei Goo, 2008. "Inflation Targeting Policy: The Experiences Of Indonesia And Thailand," CAMA Working Papers 2008-23, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    2. Soedarmono, Wahyoe & Machrouh, Fouad & Tarazi, Amine, 2013. "Bank competition, crisis and risk taking: Evidence from emerging markets in Asia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 23(C), pages 196-221.
    3. Panicos Demetriades & David Fielding, 2012. "Information, Institutions, And Banking Sector Development In West Africa," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 739-753, July.
    4. Svetlana Andrianova & Badi H. Baltagi & Panicos Demetriades & David Fielding, 2017. "Ethnic Fractionalization, Governance and Loan Defaults in Africa," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(4), pages 435-462, August.
    5. Gani, Azmat & Scrimgeour, Frank, 2014. "Modeling governance and water pollution using the institutional ecological economic framework," Economic Modelling, Elsevier, vol. 42(C), pages 363-372.
    6. Claessens, Stijn & van Horen, Neeltje, 2012. "Being a foreigner among domestic banks: Asset or liability?," Journal of Banking & Finance, Elsevier, vol. 36(5), pages 1276-1290.
    7. Peter Nunnenkamp & Rainer Thiele, 2013. "Financing for Development: The Gap between Words and Deeds since Monterrey," Development Policy Review, Overseas Development Institute, vol. 31(1), pages 75-98, January.
    8. Cho, Seo-Young & Vadlamannati, Krishna Chaitanya, 2012. "Compliance with the Anti-trafficking Protocol," European Journal of Political Economy, Elsevier, vol. 28(2), pages 249-265.
    9. Machiko Nissanke, 2015. "A Quest for Institutional Foundations Towards Inclusive Development in Sub-Saharan Africa," WIDER Working Paper Series wp-2015-049, World Institute for Development Economic Research (UNU-WIDER).
    10. Crafts, Nicholas & Toniolo, Gianni, 2008. "European Economic Growth, 1950-2005: An Overview," CEPR Discussion Papers 6863, C.E.P.R. Discussion Papers.
    11. Cohen, Marc J. & Lemma, Mamusha, 2011. "Agricultural extension services and gender equality: An institutional analysis of four districts in Ethiopia," ESSP working papers 28, International Food Policy Research Institute (IFPRI).
    12. Saad, Mohsen & Samet, Anis, 2020. "Collectivism and commonality in liquidity," Journal of Business Research, Elsevier, vol. 116(C), pages 137-162.
    13. Paitoon Kraipornsak, 2018. "Good Governance And Economic Growth: An Investigation Of Thailand And Selected Asian Countries," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(1), pages 93-106.
    14. Daniel C. Hickman & William W. Olney, 2011. "Globalization and Investment in Human Capital," ILR Review, Cornell University, ILR School, vol. 64(4), pages 654-672, July.
    15. Aparicio, Sebastian & Urbano, David & Audretsch, David, 2016. "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 45-61.
    16. Yan Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2012. "How much do firms pay as bribes and what benefits do they get? Evidence from corruption cases worldwide," NBER Working Papers 17981, National Bureau of Economic Research, Inc.
    17. Mickael Melki & Andrew Pickering, 2014. "Polarization and Government Debt," Discussion Papers 14/10, Department of Economics, University of York.
    18. Thomas Hemmelgarn & Daniel Teichmann, 2014. "Tax reforms and the capital structure of banks," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 645-693, August.
    19. Van Alstine, James & Barkemeyer, Ralf, 2014. "Business and development: Changing discourses in the extractive industries," Resources Policy, Elsevier, vol. 40(C), pages 4-16.
    20. Santangelo, Grazia D., 2018. "The impact of FDI in land in agriculture in developing countries on host country food security," Journal of World Business, Elsevier, vol. 53(1), pages 75-84.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:45:y:2009:i:1:p:9-38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CBIE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.