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

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Author Info
Sjöholm, Fredrik () (The European Institute of Japanese Studies)

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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.

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Publisher Info
Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 347.

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Length: 31 pages
Date of creation: 02 Dec 1999
Date of revision:
Handle: RePEc:hhs:hastef:0347

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Related research
Keywords: Indonesia; Economic Growth; Foreign Direct Investment; Regional Development;

Find related papers by JEL classification:
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
R30 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Henderson, J Vernon & Kuncoro, Ari, 1996. "Industrial Centralization in Indonesia," World Bank Economic Review, Oxford University Press, vol. 10(3), pages 513-40, September.
  2. Hal Hill, 1987. "Concentration in Indonesian Manufacturing," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 23(2), pages 71-100, August. [Downloadable!] (restricted)
  3. Raden Pardede, 1999. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 35(2), pages 3-40, August. [Downloadable!] (restricted)
  4. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Preserving Market Incentives," Working Papers 97042, Stanford University, Department of Economics. [Downloadable!]
  5. Olivier Blanchard & Andrei Shleifer, 2000. "Federalism with and without Political Centralization: China versus Russia," NBER Working Papers 7616, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April. [Downloadable!] (restricted)
    Other versions:
  7. Hal Hill, 2000. "Indonesia: The Strange and Sudden Death of a Tiger Economy," Oxford Development Studies, Taylor and Francis Journals, vol. 28(2), pages 117-139. [Downloadable!] (restricted)
  8. Eric Ramstetter, 1999. "Trade Propensities and Foreign Ownership Shares in Indonesian Manufacturing," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 35(2), pages 43-66, August. [Downloadable!] (restricted)
  9. Qian, Yingyi & Weingast, Barry R, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall. [Downloadable!] (restricted)
  10. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. James E. Anderson & Douglas Marcouiller, 1999. "Trade, Insecurity, and Home Bias: An Empirical Investigation," NBER Working Papers 7000, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. J. Lindblad, 1997. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 33(3), pages 3-33, December. [Downloadable!] (restricted)
  13. Sjoholm, Fredrik, 1999. "Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment," Economic Development and Cultural Change, University of Chicago Press, vol. 47(3), pages 559-84, April.
    Other versions:
  14. Hal Hill & Prema-chandra Athukorala, 1998. "Foreign Investment in East Asia: A Survey," Asian-Pacific Economic Literature, 2004 Asia Pacific School of Economics and Government, The Australian National University and Blackwell Publishing Asia Pty Ltd, vol. 12(2), pages 23-50, November. [Downloadable!] (restricted)
  15. Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, vol. 59(1), pages 43-76, June. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  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. [Downloadable!] (restricted)
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