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The Indonesian Economy: Growth, Crisis And Recovery

Author

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  • HAL HILL

    (Division of Economics, Research School of Pacific and Asian Studies, Australian National University, Canberra, Australia 0200, Australia)

Abstract

Indonesia, Southeast Asia's most populous state and its largest economy, was deeply affected by the economic crisis of 1997–1998. Its economic contraction in 1998, of over 13%, was the sharpest among all four crisis-affected East Asian economies. This followed three decades of virtually uninterrupted, rapid economic growth. The country's economic crisis was accompanied by regime collapse, resulting in the departure of then President Suharto after 32 years of authoritarian rule. This paper examines the country's socioeconomic development in the decade since the crisis, in the context of the earlier growth, and the very different institutions of economic governance operating under the new democratic regime of weakened central authority and many more economic policy actors. The main conclusions are that growth and macroeconomic stability have been restored surprisingly quickly, but that microeconomic policy and the investment climate are less predictable.

Suggested Citation

  • Hal Hill, 2007. "The Indonesian Economy: Growth, Crisis And Recovery," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 52(02), pages 137-166.
    • Handle: RePEc:wsi:serxxx:v:52:y:2007:i:02:n:s0217590807002610
    DOI: 10.1142/S0217590807002610
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    References listed on IDEAS

    as
    1. Hill,Hal, 2000. "The Indonesian Economy," Cambridge Books, Cambridge University Press, number 9780521663670, January.
    2. Hal Hill & Budy Resosudarmo & Yogi Vidyattama, 2008. "Indonesia'S Changing Economic Geography," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 44(3), pages 407-435.
    3. Manning,Chris, 1998. "Indonesian Labour in Transition," Cambridge Books, Cambridge University Press, number 9780521594127, January.
    4. Kelly Bird & Hal Hill & Sandy Cuthbertson, 2008. "Making Trade Policy in a New Democracy after a Deep Crisis: Indonesia," The World Economy, Wiley Blackwell, vol. 31(7), pages 947-968, July.
    5. Richard Pomfret, 2002. "Constructing a Market Economy," Books, Edward Elgar Publishing, number 2406.
    6. Arsenio M. Balisacan & Hal Hill (ed.), 2007. "The Dynamics of Regional Development," Books, Edward Elgar Publishing, number 4178.
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    Citations

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    Cited by:

    1. Hallward-Driemeier,Mary C. & Kochanova,Anna & Rijkers,Bob, 2020. "Does Democratization Promote Competition? : Indonesian Manufacturing Pre and Post Suharto," Policy Research Working Paper Series 9112, The World Bank.
    2. Yogi Vidyattama, 2016. "Inter-provincial migration and 1975–2005 regional growth in Indonesia," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 87-105, March.
    3. Rudy Rahmaddi & Masaru Ichihashi, 2011. "How Do Foreign and Domestic Demand Affect Exports Performance? An Econometric Investigation of Indonesia's Exports," IDEC DP2 Series 1-4, Hiroshima University, Graduate School for International Development and Cooperation (IDEC), revised Jan 2012.

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