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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)

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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Bibliographic 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:
Publication status: Published as Sjöholm, Fredrik, 'The Challenge of Combining FDI and Regional Development in Indonesia' in Journal of Contemporary Asia, 2002, pages 381-393.
Handle: RePEc:hhs:hastef:0347

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Related research

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

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References

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  1. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
  2. Hal Hill, 1999. "Indonesia : The Strange and Sudden Death of a Tiger Economy," UP School of Economics Discussion Papers 199913, University of the Philippines School of Economics.
  3. Henderson, J Vernon & Kuncoro, Ari, 1996. "Industrial Centralization in Indonesia," World Bank Economic Review, World Bank Group, vol. 10(3), pages 513-40, September.
  4. Raul Livas Elizondo & Paul Krugman, 1992. "Trade Policy and the Third World Metropolis," NBER Working Papers 4238, National Bureau of Economic Research, Inc.
  5. Sjöholm, Fredrik, 1998. "Productivity Growth in Indonesia: The Role of Regional Characteristics and Direct Foreign Investment," Working Paper Series in Economics and Finance 216, Stockholm School of Economics.
  6. 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.
  7. Olivier Blanchard & Andrei Shleifer, 2001. "Federalism With and Without Political Centralization: China Versus Russia," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 8.
  8. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
  9. James E. Anderson & Douglas Marcouiller, 1999. "Trade, Insecurity, and Home Bias: An Empirical Investigation," NBER Working Papers 7000, National Bureau of Economic Research, Inc.
  10. Raden Pardede, 1999. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 3-40.
  11. J. Thomas Lindblad, 1997. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 33(3), pages 3-33.
  12. Hal Hill & Prema-chandra Athukorala, 1998. "Foreign Investment in East Asia: A Survey," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 12(2), pages 23-50, November.
  13. Eric Ramstetter, 1999. "Trade Propensities and Foreign Ownership Shares in Indonesian Manufacturing," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 43-66.
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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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