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Economic Reforms in Indonesia after the 1997/98 Economic Crisis

Author

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  • Hadi Soesastro

    (Centre for Strategic and International Studies)

  • Haryo Aswicahyono
  • Dionisius A. Narjoko

Abstract

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.

Suggested Citation

  • Hadi Soesastro & Haryo Aswicahyono & Dionisius A. Narjoko, 2006. "Economic Reforms in Indonesia after the 1997/98 Economic Crisis," EABER Working Papers 21831, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:wpaper:21831
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    References listed on IDEAS

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    1. Manning,Chris, 1998. "Indonesian Labour in Transition," Cambridge Books, Cambridge University Press, number 9780521594127, September.
    2. Ross McLeod, 2003. "Towards improved monetary policy in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(3), pages 303-324.
    3. Asep Suryahadi & Wenefrida Widyanti & Daniel Perwira & Sudarno Sumarto, 2003. "Minimum Wage Policy And Its Impact On Employment In The Urban Formal Sector," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(1), pages 29-50.
    4. Armida Alisjahbana & Chris Manning, 2002. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(3), pages 277-305.
    5. Chris Manning, 2000. "Labour Market Adjustment to Indonesia's Economic Crisis: Context, Trends and Implications," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 36(1), pages 105-136.
    6. Budy Resosudarmo & Arief Yusuf, 2009. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 45(3), pages 287-315.
    7. Reza Siregar, 2001. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(3), pages 277-303.
    8. Prema-Chandra Athukorala, 2002. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 141-162.
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    Cited by:

    1. Yoshifumi Fukunaga & Ponciano Intal & Fukunari Kimura & Phoumin Han & Philippa Dee & Narjoko Dionisius & OUM Sothea, . "ASEAN Rising: ASEAN and AEC Beyond 2015," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2013-asean-rising edited by Yoshifumi Fukunaga & Ponciano Intal, Jr. & Fukunari Kimura & Phoumin Han & Philippa Dee & Narjoko Di, January.
    2. Yoshifumi Fukunaga & Ponciano Intal & Fukunari Kimura & Phoumin Han & Philippa Dee & Narjoko Dionisius & OUM Sothea, . "ASEAN Rising: ASEAN and AEC Beyond 2015," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2013-rpr-01 edited by Yoshifumi Fukunaga & Ponciano Intal, Jr. & Fukunari Kimura & Phoumin Han & Philippa Dee & Narjoko Di.

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    More about this item

    Keywords

    Indonesia; Organisation of government; IMF;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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