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Indonesian Growth Dynamics

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  • M Chatib Basri
  • Hal Hill

Abstract

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 1997-98 and 2008-09, and how and why Indonesia's response to them was completely different. We emphasize and illustrate how the years 1997-98 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, maintaining a broadly open commercial policy regime, the regional and international architecture, macroeconomic management, and 'connectivity' and regional (sub-national) development.

Suggested Citation

  • M Chatib Basri & Hal Hill, 2010. "Indonesian Growth Dynamics," Departmental Working Papers 2010-10, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2010-10
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2010/wp_econ_2010_10.pdf
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    References listed on IDEAS

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    1. Prema-Chandra Athukorala, 2006. "Post-crisis export performance: The Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 42(2), pages 177-211.
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    Cited by:

    1. Heru Iswahyudi, 2016. "Back to oil: Indonesia economic growth after Asian financial crisis," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 8(1), pages 25-44, April.
    2. Chatib Basri & Hal Hill, 2020. "Making Economic Policy in a Democratic Indonesia: The First Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 15(2), pages 214-234, July.
    3. Basri, Muhammad Chatib, 2013. "A Tale of Two Crises: Indonesia’s Political Economy," Working Papers 57, JICA Research Institute.
    4. Muhamad Chatib Basri, 2017. "Reform in an imperfect world: the case of Indonesia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 31(2), pages 3-18, November.
    5. Hal Hill & Maria Socorro Gochoco- Bautista, 2013. "Perspectives and issues," Chapters, in: Hal Hill & Maria Socorro Gochoco-Bautista (ed.), Asia Rising, chapter 1, pages 3-45, Edward Elgar Publishing.
    6. Gupta, Krisna & Gretton, Paul & Patunru, Arianto, 2022. "Projecting the long run impact of an economic reform: the case of the Indonesian Omnibus Law and concurrent changes in trade policy," Conference papers 333472, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Hal Hill, 2012. "The Best of Times and the Worst of Times: Indonesia and Economic Crises," Departmental Working Papers 2012-03, The Australian National University, Arndt-Corden Department of Economics.
    8. M. Chatib Basri & Arianto A. Patunru, 2012. "How to keep trade policy open: the case of Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 48(2), pages 191-208, August.
    9. Ari Kuncoro, 2013. "Indonesia," Chapters, in: Hal Hill & Maria Socorro Gochoco-Bautista (ed.), Asia Rising, chapter 9, pages 246-284, Edward Elgar Publishing.
    10. Ardiyono, Sulistiyo K. & Patunru, Arianto A., 2023. "Firms’ responses to foreign demand shocks: Evidence from Indonesia after the global financial crisis," Economic Modelling, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    Indonesia; growth dynamics; economic crises; policy reform;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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