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Economic Recovery in Indonesia: The Challenge of Combining FDI and Regional Development

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  • Sjöholm, Fredrik

    (The European Institute of Japanese Studies)

Abstract

Indonesia has been severely hurt by the recent economic crisis, which has been accompanied by social tensions. Still, there are reasons to be optimistic about Indonesia's future. The economic crisis may have bottomed out and the difficult transition to democracy has started. For a sustainable long-term recovery, it is essential that Indonesia is able to attract FDI inflows, and manages to achieve a reasonably equal spatial development of growth. Unfortunately, there is a possible contradiction between FDI and even regional development since FDI tends to locate in concentrated clusters. This paper discusses some requirements for a long-term recovery of Indonesia, which special focus on FDI and an even spatial development.

Suggested Citation

  • Sjöholm, Fredrik, 1999. "Economic Recovery in Indonesia: The Challenge of Combining FDI and Regional Development," SSE/EFI Working Paper Series in Economics and Finance 347, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0347
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    Cited by:

    1. Robert E. Lipsey & Fredrik Sjoholm, 2001. "Foreign Direct Investment and Wages in Indonesian Manufacturing," NBER Working Papers 8299, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Indonesia; Economic Growth; Foreign Direct Investment; Regional Development;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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