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Macroeconomic Policies in Indonesia: Indonesia Economy Since the Asian Financial Crisis of 1997
This book gives insight on the dynamics and route of economic policies that have been taken and implemented since the point of institutional reforms in 1998 that were triggered from the context of the financial crisis in 1997/1998. The condition brought a different paradigm on the landscape of economic and development policies, especially in the case of the monetary and financial structure, the international trade sector, the manufacturing sector, the taxes administration policy and the evolved context of decentralization and development of public sector policies in general.Given state of current economic development, this book offers suggestions to address economic issues that require improvements. This book is unique 1) it is about Indonesia, a country mostly affected by 1997/1998 financial crisis, which also lead to a change in regime; 2) it covers a broad range of thematic topics on sectors development and institutional changes from major policies that have been taken; and 3) it posits both existing and future challenges on monetary and financial sectors, trade, manufacturing and competitiveness, as well as on development of decentralization policies.
318 pages, Kindle Edition
First published December 1, 2014
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Displaying 1 of 1 review
August 15, 2020
The financial repression
What is the root cause of Indonesian economic problem: corruption. I know its naive answer, but let see the financial sectors cases. To have an advance financial system, a country should move from traditional deposit taking and lending to corporate bonds. However this is not interesting as 1) SOE depend on SOE banks for cheap fund 2) family owned do not like share ownership 3) small companies make bond is more expensive. The corrupt environment tend to prevent efficient economic to be happening.
This is contradiction, the truth is, a country/company should have a period of "take off" first, move from feudalistic to modern stage by doing some kind of acceleration which usually through some kind of exploitation. And to reach that stage is very difficult.
Therefore, I only read this book in the first and second chapter, the rest is self explained, why mutual fund is not successful, why tax regime is not effective.
What is the indicators that Banks in Indonesia is least developed? let see myself for the example. I have a two house, while my friends gets four house. I get two houses from mortgage and at this moment I owe in banks 2 billion rupiah, my friends in other hand do not owe a banks, his total 4 billion rupiah, he get its from his parents. Although my friends is technically wealthier, but his financial system intermediaries is least developed.
Ch1: Monetary policy, will re read
Ch2: Banking, super interesting
Ch3: Mutual fund, well we know its declining (at least in 2020)
Ch4: Forex Reserves
Ch5: Tax
Ch6: Intergovernmental transfers: Otonomi daerah basically, never ending issues
Ch7: Trade policy, well our trade is not that good
Ch8: Manufacturing: no identity, always about 90s
Ch9: Innovation
Ch10: Democracy?
Good summary, Indonesia has historically been suffering from institutional issues:
- The Dutch colonial period in the 1830s: extractive and coercive institutions were introduced
with the forced Cultivation System (1830–70);
- Guided and socialist institutions during the Soekarno presidency characterized by a blend of nationalism, religion and communism;
- Predatory institutions during the New Order with a rise of rent-seeking behaviours, corruption, collusion and cronyism.
- The ‘big bang’ democratization and decentralization in 1999 (introduced only in 2001) posed
new problems in the Reformasi period (the period after the fall of the 32-year
dictatorship of Soeharto), including a fragmented and unstable presidential and multi-party parliamentary system, an increase of local inter-ethnic and interreligious conflicts and violence, proliferation of autonomous district/municipalities, decentralized corruption and widespread local capture. The post-Soeharto government seems to be shadowed by a mix of the old and new oligarchic forces.
What is the root cause of Indonesian economic problem: corruption. I know its naive answer, but let see the financial sectors cases. To have an advance financial system, a country should move from traditional deposit taking and lending to corporate bonds. However this is not interesting as 1) SOE depend on SOE banks for cheap fund 2) family owned do not like share ownership 3) small companies make bond is more expensive. The corrupt environment tend to prevent efficient economic to be happening.
This is contradiction, the truth is, a country/company should have a period of "take off" first, move from feudalistic to modern stage by doing some kind of acceleration which usually through some kind of exploitation. And to reach that stage is very difficult.
Therefore, I only read this book in the first and second chapter, the rest is self explained, why mutual fund is not successful, why tax regime is not effective.
What is the indicators that Banks in Indonesia is least developed? let see myself for the example. I have a two house, while my friends gets four house. I get two houses from mortgage and at this moment I owe in banks 2 billion rupiah, my friends in other hand do not owe a banks, his total 4 billion rupiah, he get its from his parents. Although my friends is technically wealthier, but his financial system intermediaries is least developed.
Ch1: Monetary policy, will re read
Ch2: Banking, super interesting
Ch3: Mutual fund, well we know its declining (at least in 2020)
Ch4: Forex Reserves
Ch5: Tax
Ch6: Intergovernmental transfers: Otonomi daerah basically, never ending issues
Ch7: Trade policy, well our trade is not that good
Ch8: Manufacturing: no identity, always about 90s
Ch9: Innovation
Ch10: Democracy?
Good summary, Indonesia has historically been suffering from institutional issues:
- The Dutch colonial period in the 1830s: extractive and coercive institutions were introduced
with the forced Cultivation System (1830–70);
- Guided and socialist institutions during the Soekarno presidency characterized by a blend of nationalism, religion and communism;
- Predatory institutions during the New Order with a rise of rent-seeking behaviours, corruption, collusion and cronyism.
- The ‘big bang’ democratization and decentralization in 1999 (introduced only in 2001) posed
new problems in the Reformasi period (the period after the fall of the 32-year
dictatorship of Soeharto), including a fragmented and unstable presidential and multi-party parliamentary system, an increase of local inter-ethnic and interreligious conflicts and violence, proliferation of autonomous district/municipalities, decentralized corruption and widespread local capture. The post-Soeharto government seems to be shadowed by a mix of the old and new oligarchic forces.
Displaying 1 of 1 review