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Economic Reforms in Indonesia After The 1997/98 Economic Crisis

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  • Hada 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.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series EABER Working Papers with number 21861.

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Date of creation: Jan 2007
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Handle: RePEc:eab:wpaper:21861

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Keywords: Indonesia; Organisation of government; IMF;

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References

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  1. Prema-Chandra Athukorala, 2002. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 141-162.
  2. Armida Alisjahbana & Chris Manning, 2002. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(3), pages 277-305.
  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. Manning,Chris, 1998. "Indonesian Labour in Transition," Cambridge Books, Cambridge University Press, number 9780521594127, April.
  5. Ross McLeod, 2002. "Toward Improved Monetary Policy in Indonesia," Departmental Working Papers 2002-10, The Australian National University, Arndt-Corden Department of Economics.
  6. Hadi Soesastro & M. Chatib Basri, 2005. "The political economy of trade policy in Indonesia," CSIS Economics Working Paper Series WPE092, Centre for Strategic and International Studies, Jakarta, Indonesia.
  7. Hadi Soesastro & Raymond Atje, 2005. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 41(1), pages 5-34.
  8. Reza Siregar, 2001. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(3), pages 277-303.
  9. 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.
  10. Budy Resosudarmo & Arief Yusuf, 2009. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 45(3), pages 287-315.
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