IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Survey of recent developments

Listed author(s):
  • Budy Resosudarmo
  • Arief Yusuf

Indonesia has so far suffered a relatively mild impact from the global financial crisis. Its economy grew at 4% in the year to June 2009, displaying a more resilient response than some of its neighbours. Fiscal stimulus measures, deft monetary policy and cash transfers to the poor served to soften the impact of the crisis. Parliamentary elections in April and presidential elections in July provided further economic stimulus. Election-related spending and the stimulus measures helped maintain formal sector employment levels and the proportion of casual employees in the workforce. Like the cash transfers, payments by parliamentary candidates to voters contributed to household incomes, particularly among the poor. This is reflected in widespread declines in poverty observed in 2009. The crisis, the stimulus package, the direct cash transfers and the election campaign spending combined to create a mechanism of income redistribution in favour of the poor. On 20 October Susilo Bambang Yudhoyono and Boediono were inaugurated as president and vice president for 2009-14. They announced key economic targets for 2014, including 7% economic growth, 5-6% unemployment and an 8-10% poverty level. It is crucial that the two leaders tackle important reforms - even politically sensitive ones - that will remove obstacles to faster and more employment-friendly growth. However, the plan for their first 100 days focuses on a series of small, politically non-sensitive reforms designed to demonstrate their commitment to, and create momentum for, wider reform. This strategy is unlikely to create an impression that the government is serious about more substantial and essential reforms. Nor is it likely to generate the economic impact necessary to bring the economy closer to the government's key economic targets. The slow expansion of infrastructure since the 1997-98 crisis is a major obstacle to future high and sustained economic growth. Despite some signs of improvement in recent years, Indonesia's rate of infrastructure investment remains far below pre-crisis levels. Tackling this problem should be a high priority for the government. While pursuing ways to grow faster, Indonesia - one of the world's largest CO2 emitters-needs to respond more vigorously to climate change. The leaders have pledged to place climate change mitigation high on their policy agenda. Yet little has been said about how, as one of the countries most vulnerable to climate change, Indonesia should support her people's adaptation to its effects. The government needs to give high priority to adaptation and promote it at the international level.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 45 (2009)
Issue (Month): 3 ()
Pages: 287-315

in new window

Handle: RePEc:taf:bindes:v:45:y:2009:i:3:p:287-315
DOI: 10.1080/00074910903301639
Contact details of provider: Web page:

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:taf:bindes:v:45:y:2009:i:3:p:287-315. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.