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Indonesia - Dimensions of growth (English)

Indonesia is one of the highest performing Asian economies. Per capita GDP growth was in the top 10 percent of all developing countries during the last 30 years; poverty reduction was equally notable. According to the World Bank, Indonesia moved from low to lower middle-income country status in 1993. It has a well-deserved reputation for strong macroeconomic management. Its economic growth has raised average incomes in all parts of Indonesia over the past 30 years. The basis of that growth can underpin continued modernization of the country. It also is the surest path toward continued progress in reducing poverty. But continued growth will exacerbate strains that have begun to emerge, unless policy measures are taken. Such strains are appearing in the use of land, water and forestry resources; in the growing pollution problem; in the deregulation process; in financial sector problems; and in the privatization process. Greater transparency and greater reliance on market forces would relieve these strains. Indonesia's economic growth and structural transformation have been facilitated by a well-functioning labor market. The share of workers has shifted dramatically from agriculture to the rapidly growing industry and service sectors. Also, across all provinces of the country, income and consumption grew, social welfare indicators improved, and there was continued progress in reducing poverty during 1983-1993. This report examines four dimensions of Indonesia's economic performance and the challenges they hold for modernizing Indonesia: 1) maintaining macroeconomic stability; 2) increasing transparency and competition in the economy (natural resources, environmental pollution, deregulation, the financial sector and private provision of infrastructure); 3) maintaining a well-functioning labor market; and 4) sustaining equitable, broad-based regional development.


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    Pre-2003 Economic or Sector Report

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    East Asia and Pacific,

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  • Doc Name

    Indonesia - Dimensions of growth

  • Keywords

    general agreement on tariffs and trade;current account deficit;high rates of interest;Macroeconomic Stability;monetary policy;Labor Market;urban land use planning;agricultural and infrastructure development;balance of payment;per capita consumption;lack of demand;accountability for expenditures;tight monetary policy;benefits of privatization;financial system;value added tax;exchange rate risk;private investment;private debt flow;impact on market;Capital Adequacy Ratio;private sector borrowing;monetary policy instrument;public external debt;money market instrument;public debt reduction;work long hour;exchange rate development;consumer price index;high reserve requirement;external capital flows;consumption per capita;block grant program;distribution of expenditure;reducing public debt;domestic credit growth;high minimum wages;environmental protection measures;deposit money bank;number of teachers;real exchange rate;benefit of pollution;Fiscal policies;fiscal policy;domestic demand;Macroeconomic Policy;private consumption;Learning and Innovation Credit;increasing transparency;Job Creation;poverty alleviation;overdue loan;modern economy;oil trade;privatization process;productivity policy;social indicator;water pollution;lending limit;political level;market rate;wage increase;state bank;market mechanism;health status;Financial Sector;oil import;external borrowing;private provision;average wage;consumption demand;industrial pollution;job growth;trading opportunities;Health Service;Gender Gap;international rate;Commercial Banks;Property tax;child labor;formal sector;Water Management;industrial relation;domestic competition;pollution prevention;earnings growth;fiscal redistribution;broad money;prudential regulation;Natural Resources;conservative growth;environmental pollution;implicit guarantee;private interest;budget surplus;private capital;electricity price;competition policy;protected activity;policy stability;tariff cut;investment demand;social good;petroleum price;Public Spending;fiscal issue;working condition;export restrictions;capital account;macroeconomic framework;net impact;export tax;student-teacher ratio;high inflation;gas infrastructure;palm oil;public borrowing;enforcement mechanism;bank charter;mlt borrowing;country risk;performance bond;infrastructure service;public-private partnership;investment approvals;Research Support;sectoral distribution;debt indicators;high wage;educational level;employment growth;external financing;medium-term outlook;reserve money;commercial borrowing;Oil Export;education spending;Infant Mortality;document processing;average earning;urban phenomenon;interest spreads;banking sector;Exchange Rates;official reserve;portfolio investment;reasonable estimate;aggregate demand;export growth;private borrowing;higher deficit;oil price;investment market;rising inflation;public saving;privatization proceeds;capital growth;labor demand;Capital Inflows;international reserve;capital good;private finance;



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Indonesia - Dimensions of growth (English). World Development Sources, WDS 1996 Washington, D.C. : World Bank Group.