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From the mid-2010s, the Indonesian government began to strengthen its direct participation in the economy by investing significantly in and via state-owned enterprises. Since the ownership reorganisation of state enterprises has been slow in the past, the government continues to hold a large portfolio of companies in diverse industries. Fiscal space was created after reducing fuel subsidies, enabling the government to inject a large amount of capital into state enterprises. The government's control over the financial industry has also contributed to state enterprises' expansion. However, state capitalism looks quite different now than the period before the Asian economic crisis. Economic and political changes of the past two decades have resulted in various domestic forces keeping the government's aggressive mobilisation of state enterprises in check. Therefore, the recent state enterprise-centred development strategy in Indonesia can be described as "restrained state capitalism." [ABSTRACT FROM AUTHOR]

The policy importance of non-core liabilities (bank liabilities other than equity and retail deposits) has risen to prominence in recent years with a number of studies highlighting it as a useful indicator of financial procyclicality and vulnerability. In this paper, we look at non-core liabilities in relation to its role in the transmission of monetary policy, particularly by examining how the interest rate channel of monetary policy is affected by non-deposit liabilities. We analyse this issue in the context of an emerging economy experience of Indonesia, which in recent years, has seen an increased reliance of its banking sector on non-core funding. Our investigation employs available bank-level data on non-core liabilities and lending rates in Indonesia over the period October 2011 to July 2016. We find that including non-core liabilities in the estimation has an effect, relative to the baseline, of stronger overall and immediate pass-through, albeit with a more sluggish adjustment towards the correction of disequilibrium in the next period. The overall effect is that non-core liabilities make the duration longer for the monetary policy rate to transmit to bank lending rates in Indonesia. [ABSTRACT FROM AUTHOR]

Copyright of Regional Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study considers the political aspects of the Joko Widodo government’s megaproject to build an integrated marine logistic system known as thetol laut. Expanding the existing literature which gives details about the contextual obstacles faced by and the prospects for the Indonesian government to pursue its infrastructure ambitions, the study argues that notwithstanding the relevance of thetol lautfor advancing the Indonesian economy, it is inevitably entangled with dynamic internal and external environments which can unfavourably distort the construction processes. This is the way of understanding the political economy of Indonesia’s development issues which allows for the juxtaposition of domestic political and international relations factors as its framework of analysis. The discussion is divided into four sections. Section one explains the conceptual and methodological foundation of the study. Section two outlines the importance of thetol lautto Indonesian national economic development. Section three looks at how the current domestic political settings pose structural hurdles to Widodo’stol laut, and section four observes the effect of international relations of powerful regional actors and Jakarta’s diplomatic capacity to the on-goingtol laut. The concluding section summarizes the findings of the study. [ABSTRACT FROM PUBLISHER]

In this essay we propose an alternative approach to assessing the state of democracy in Indonesia. We focus not on institutional indicators (as is usually the case) but on manifestations of political discourses in the public sphere. In applying post-Marxist political theory through the work of Slavoj Žižek and Chantal Mouffe, we argue that democracy’s main defining feature is that it allows antagonistic discourses about alternative policies to coexist, yet still manages to coalesce around a minimal consensus on how these discursive conflicts are to be dealt with in a fair way. Applying this approach to democracy analysis to Indonesia, we suggest that the major obstacles to democratic practice do not emerge from institutional problems, but from an overbearing political discourse that imposes broad consensus and harmony on most political issues. Political discourse in Indonesia is generally structured around “Islam” and “the people.” These themes provide a basis for a political consensus that conceals economic and social contradictions and reveals considerable depoliticization in Indonesian democratic practice. [ABSTRACT FROM AUTHOR]

This article explores the strategies employed towards achieving post-colonial repair and transformation by a small village in Indonesia though the case of the Peasant Union's activism, interpreted by a Jamaican Rastafari considering Bandung after 60 years solidarity pilgrimage. [ABSTRACT FROM PUBLISHER]

What kinds of states are financed by illicit monies? Does the source of state revenue matter for state formation? This article examines these questions in the context of democratizing Indonesia by analyzing licit and illicit sources of Indonesian police financing and the ways in which illicit practices of extraction and accumulation reshape the structure of the state. Budgetary revenues are both deficient and poorly organized by the Indonesian police (POLRI), continuing practices of fiscal maladministration and rent seeking that defined Suharto's New Order. This article demonstrates how this legacy continues within today's police by illustrating how on- and off-budget financing both resources police work and feeds centralized patron-clientalism through an ethics of “dirty-money” that ultimately sees rents flow upwards to police leadership. However, as Indonesia's neoliberal style democratization fragments centralized patronage into a shifting and unstable patron-clientalism, established patterns of rent accumulation and circulation and the moral-legal regimes that support them break down. In an uncertain environment, officers of all ranks canvass the political system, forming increasingly diverse networks that they hope will secure rents and their political future. Reworking Jean François Bayart's original use of the term, this, the author argues, is “the rhizome state.” [ABSTRACT FROM PUBLISHER]

Empirical studies on the impact of currency devaluation or depreciation on the trade balance still continue to occupy the literature. These studies have evolved from using aggregate to disaggregated data. The findings, however, have been mixed. Previous research using aggregate trade flows of Indonesia with the rest of the world or bilateral data between Indonesia and the U.S. as one of its major trading partners found no significant relation between rupiah-dollar rate and Indonesia’s bilateral trade balances. In this article, we disaggregate the trade flows between Indonesia and the U.S. by commodity and show that the trade balances of at least nine out of 23 industries react to exchange rate changes favorably in the long run. [ABSTRACT FROM AUTHOR]

Motivated by a concern that Indonesia is on the path to deindustrialisation, this article uses data from 1991 to 2009 to examine whether there were differences in the characteristics of entrants to the Indonesian manufacturing sector before and after the 1997–98 Asian financial crisis. It finds that entrants after the crisis were larger or less dependent on credit than their predecessors, suggesting that they were more resilient to economic shocks. Yet entrants after the crisis exported relatively less than their predecessors. Meanwhile, productivity levels were the same before and after the crisis, indicating that entrants were able to match the productivity level of incumbents. Contrary to the concerns about deindustrialisation, these characteristics may simply reflect a dynamic that resulted in better or more resilient firms entering the industry after the crisis. [ABSTRACT FROM AUTHOR]

This article analyses the consumption growth elasticity and inequality elasticity of poverty in Indonesia, with a particular focus on the decentralisation period. Using provincial panel data, we show that the effectiveness of growth in alleviating poverty across provinces was greater during decentralisation—that is, between 2002 and 2010—than at any other point since 1984. The growth elasticity of poverty since 2002 is estimated to have been –2.46, which means that a 10% increase in average consumption per capita would have reduced the poverty rate by almost 25%. However, we also find that rising income inequality negated a quarter to a third of the 5.7-percentage-point reduction in the headcount poverty rate. This increasing inequality has contributed to a lower level of pro-poor growth than that maintained in Indonesia before decentralisation. [ABSTRACT FROM AUTHOR]

The government of Indonesia has now piloted two different output-based performance grants to regions. One focuses on increasing the amount and quality of local government capital spending. The other provides incentives for local governments to augment equity investments in their water enterprises and for the enterprises to use those investments to increase the number of household water connections to the poor. Impact evaluations of the two grants suggest some reasonably positive outcomes against the stated objectives. While the assessed impacts may not match the expected outputs (as argued by many performance grant enthusiasts), these impacts provide a plausible basis for the sustained development and use of such grants. The alternative would be to continue to rely exclusively on the equity-based approaches that have dominated intergovernmental fiscal relations in Indonesia and have led to rather weak local public service outcomes. [ABSTRACT FROM AUTHOR]

Many land titling programs worldwide have produced lacklustre results in terms of achieving access to credit for the poor. This may reflect insufficient emphasis on local banking practices. Bankers commonly seek to ensure repayment by using methods other than securing collateral, such as targeting borrower characteristics that, on average, improve repayment rates. Formal land titles can signal these important characteristics to the bank. Using a household survey from Indonesia, we provide evidence that formal land titles have a positive and significant effect on access to credit and that at least part of this effect is best interpreted as an improvement in information flows. These results stand in contrast to the prevailing notion that land titles function only as collateral. Analysts who neglect local banking practices may misinterpret the observed effect of systematic land titling programs on credit access because these programs tend to reduce the signalling value of formal land titles. [ABSTRACT FROM AUTHOR]

Following the remarkably successful 2014 parliamentary and presidential elections in Indonesia, attention now turns to the new president and his agenda for the next five years. President Joko Widodo, known as Jokowi, has emphasised the importance of strong economic growth and rising living standards. But he faces significant, broad-ranging economic challenges and, perhaps not surprisingly, serious discussion of these issues did not feature during the election campaigns. In many respects the economy is at a crossroads, facing the choice between a business-asusual scenario of no reform and consequently sluggish economic growth, and a politically difficult reform agenda that would set it on a higher growth path. Economic policymakers regard the events of 2013 as a mini economic crisis, and they feel vindicated in their explicit preference for stability over growth—that is, for slowing the economy through tighter fiscal and monetary policy and letting the currency decline. For now, the economy is slowing but holding up quite well, especially by comparative international norms and considering foreign and domestic headwinds, including possible macroeconomic and financial fragilities. Here we examine these headwinds—from global economic volatility and declining commodity prices, particularly in the wake of the so-called Bernanke shock of May 2013, to the continuing policy drift at home. We investigate whether there is evidence of an emerging adjustment from the commodity-driven growth of the past decade to some of the traditional tradables sectors, especially manufacturing. While the commodity boom is almost certainly a thing of the past—at least at levels witnessed since 2005—the country's political narratives and the government's microeconomic policies appear to be still premised on an era of plenty funded by a disappearing boom. We speculate on likely options and directions for what in all likelihood will be a ‘Jokowi decade’. [ABSTRACT FROM AUTHOR]

The article discusses the future of Indonesia's foreign policy following the 2014 election of former Jakarta, Indonesia governor Joko Widodo, or Jokowi, as the country's president, often referencing Indonesian history during the early 21st century. An overview of the tenure of the former Indonesian President Susilo Bambang Yudhoyono, including his efforts to restore the country's power and leadership in the Southeast Asian region and within the Association of Southeast Asian Nations (ASEAN), is provided. An overview of the economic conditions in Indonesia, including economic growth in the country, is also provided.

In this article, we consider the recent increase in inequality in Indonesia. We make new, consistent estimates of expenditure inequality for 1993–2013, using several measures that draw on household expenditure data from the National Socioeconomic Survey (Susenas) for 1993–2013. In doing so, we note that the central statistics agency, Badan Pusat Statistik (BPS), used grouped data for its estimates of inequality until 2009 and that this underestimated inequality up to then. Thus the rise in inequality reported since 2009 actually has a longer history. We argue that Indonesia experienced divergence and convergence at the same time: the magnitude of the rise in inequality was significant (divergence), but the rise was greatest in provinces or districts with low initial levels of inequality (convergence). We consider the literature on drivers of changes in inequality and identify a set of hypotheses, with an empirical basis, which we introduce as potential Indonesian-specific drivers of rising inequality for future exploration. [ABSTRACT FROM AUTHOR]

We explore the nexus between poverty, inequality, and economic growth in Indonesia between 2002 and 2012, using several pro-poor growth concepts and indices to determine whether growth in this period benefited the poor. Our regression-based decompositions of poverty into growth and redistribution components suggest that around 40% of inequality in total household expenditure in Indonesia was due to variations in expenditure by education characteristics that persisted after controlling for other factors. We find that economic growth in this period benefited households at the top of the expenditure distribution, and that a ‘trickle down’ effect saw the poor receive proportionately fewer benefits than the non-poor. If reducing poverty is one of the Indonesian government's principal objectives, then policies designed to spur growth must take into account the possible impacts of growth on inequality. [ABSTRACT FROM AUTHOR]

This article describes how the measurement of the official Indonesian poverty figures has evolved since 1984, when Badan Pusat Statistik (BPS), Indonesia's central statistics agency, published its first poverty report. Since then, BPS has on several occasions revised the underlying methodology for how it calculates poverty. These changes have, in general, improved the way that poverty in Indonesia is measured, but they make it difficult to compare poverty figures over time. In fact, only poverty estimates (at the national and provincial level) since 2007 are based on the same methodological approach. This article presents the first detailed description of official poverty measurement in Indonesia since Booth's (1993) study, in English, and Sutanto and Avenzora's (1999) study, in Indonesian. It constitutes a unique repository for anybody who wants to understand the technical details of official poverty measurement in Indonesia. [ABSTRACT FROM AUTHOR]

Using 1996 and 2006 census data on medium-large plants in Indonesian manufacturing, we examine whether foreign multinational enterprises (MNEs) and stateowned enterprises (SOEs) used purchased energy more efficiently than local, private plants, finding that the correlation between plant ownership and total energy intensity, gas intensity, and coal intensity was generally weak in both years. Second, we ask whether energy efficiency in private plants was affected by the presence of MNEs or SOEs in high-energy-consuming industries. In 1996, private energy intensities were often positively correlated with the presence of SOEs and majorityforeign MNEs and negatively correlated with the presence of wholly foreign or minority-foreign MNEs, but in 2006 the corresponding results differed substantially. This suggests that ownership-related differentials in energy intensity and intra-industry energy-intensity spillovers are not pronounced. If policymakers are concerned with improving energy efficiency in Indonesian manufacturing, plant ownership should not be a major consideration. [ABSTRACT FROM AUTHOR]

Indonesia has made well-documented and drastic progress in raising average incomes and reducing poverty. This article adds to the literature by providing a complementary perspective of poverty between 1984 and 2011. We discuss the evolution of poverty in Indonesia using international poverty lines—$1.25 per person per day (in 2005 purchasing power parity dollars) and $2.00 per day, and we add $10.00 per day. We generate estimates of poverty since 1984 and make projections based on various trends in growth and inequality. We find that Indonesia has the potential to become a high-income country by around 2025 and end $1.25-per-day and $2.00-perday poverty by 2030, but this will require strong economic growth and favourable changes in distribution. Looking ahead, the end of poverty in Indonesia may mean that a large proportion of the population will remain vulnerable to poverty for some time to come, suggesting that public policy priorities will need to balance insurance and risk-management mechanisms with more ‘traditional’ poverty policy. [ABSTRACT FROM AUTHOR]

This article illustrates how discourses on ‘state fragility’ have been instrumentalised by the Indonesian military in order to consolidate its political and economic power after the fall of Suharto. In the wake of Indonesia’s transition to democracy violent conflicts escalated in East Timor, Aceh, Papua, the Moluccas and Sulawesi. Most notably East Timor’s successful secession spawned fears over the potential ‘balkanisation’ of Indonesia. In this context the Indonesian military, which had been shunned for its involvement in Suharto’s New Order, managed to re-establish itself as the ‘guardian of the nation’. Based on fieldwork in Indonesia, the article describes how post-9/11 discourses over a potential break-up of Indonesia were used by the Indonesian military to reconsolidate its power in the post-Suharto era. The research findings illustrate that, against the looming threat of state disintegration, attempts to revoke the military’s prerogatives have either failed or have been aborted during the planning stages. [ABSTRACT FROM PUBLISHER]

Copyright of Regional Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Bulletin of Indonesian Economic Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article reviews the literature on human rights violations in Indonesia during the post-New Order period, evaluates the explanations it provides, and suggests avenues for future inquiry drawing on insights from Richard Robison's Indonesia: The Rise of Capital and his subsequent book with Vedi Hadiz, Reorganising Power in Indonesia: The Politics of Oligarchy in an Age of Markets. It is argued that this literature either gives insufficient attention to the nature of the Indonesian state or does so in a way that obscures the interests of the country's powerful politico-business oligarchy. Future research thus needs to examine the role of these factors, taking into account the way in which the oligarchy's interests vis-à-vis human rights are mediated by the type of right and the structure of the economy. [ABSTRACT FROM AUTHOR]

Indonesia: The Rise of Capital continues to occupy an important position in the study of Indonesia's polity and economy. Its emphasis on broad processes and big structures provides the tools to uncover the genesis, triumph and reconstitution of a politico-business oligarchy during the Soeharto era and beyond. By employing the theses of politico-business oligarchy and that of embeddedness, this paper argues that the dominance of the predatory state-capital alliance originally forged during the New Order ensures the continued marginalisation of Indonesian provincial clothing entrepreneurs. It examines the patterns of business networks emerging from such entrepreneurs and how they adapt, resist and re-adapt to state policies driven by the interests of the politico-business oligarchy. Utilising clothing-producing regions in Central Java and Bali as case studies, this paper shows how the employment of different strategies of survival have resulted in different outcomes, but none of which has strengthened the structural position of provincial entrepreneurs within the Indonesian political economy in the post-Soeharto era. [ABSTRACT FROM PUBLISHER]

To measure real income growth over time, a price index is needed to adjust for changes in the cost of living. The consumer price index (CPI) is often used for this task; but several country studies show that it is a biased measure of such changes, leading to potentially inaccurate estimates of the rate of real income growth. This paper calculates CPI bias for urban Indonesia by estimating food Engel curves for households with the same level of CPI-deflated incomes at four different points in time between 1993 and 2008. The results suggest that CPI bias was negative during the 1997–98 crisis but has been positive since 2000. From 1993 to 2008, CPI bias averaged 4% annually, equivalent to almost one-third of the measured inflation rate. [ABSTRACT FROM AUTHOR]

The arrival of a new year has brought with it an increased focus on Indonesia's 2014 legislative and presidential elections. While voters may be disillusioned with established political figures, a strong presidential candidate has yet to emerge. Many voters appear to yearn for an experienced and uncorrupt leader with new and proactive policies, which is why Jakarta's new governor, Joko Widodo, is being viewed as a potential candidate. The Constitutional Court has made two major, controversial rulings in recent months: the first concerned the upstream oil and gas regulator BPMigas, the second the international-standard pilot-project schools (Rintisan Sekolah Bertaraf Internasional, RSBIs). The Court ruled both institutions unconstitutional and called for their immediate disbandment. In 2012, Indonesia's year-on-year economic growth slowed slightly, to a still healthy 6.2%, owing to continued weak global demand for its exports and a contraction in government expenditure. In contrast, foreign direct investment and portfolio investment were particularly strong, with respective increases of 25% and more than 142%. At 4.3%, inflation for the 2012 calendar year still remains well within the government's and Bank Indonesia's expectations. However, inflation expectations are high for 2013, owing to likely reforms to energy subsidies; the expected effect of bad weather on food prices; and increases in minimum wages, which attracted attention in 2012 because of their magnitude and their apparent disparity among regions. Concerns also exist that these rises in minimum wages will hamper Indonesia's international competitiveness and could discourage investment in labour-intensive industries. Minimum-wage policy is also controversial because of doubts about its relevance to the genuinely poor sections of society – those in informal employment or with primarily subsistence income, who constitute a large proportion of the population. Indonesia has experienced a steady increase in income inequality in the last decade, indicating that the benefits of strong economic growth have not been shared equally. Potential reasons for this increasing inequality relate to labour-market segmentation amid a growing middle class, weak institutional foundations, and commodity-driven growth. It appeared in 2012 that Indonesia has also been one of the world's poorest performers in HIV/AIDS prevention in recent years. While prevalence rates are low, the number of new HIV infections in 2011 was more than four times that of any other South Asian or Southeast Asian country, and the infection rate among the working-age population has risen by more than 25% since 2001. Infection rates among high-risk groups are also alarmingly high compared with those of other Southeast Asian countries. Targeted prevention, treatment and support programs among these groups are paramount. [ABSTRACT FROM AUTHOR]

The article presents several abstracts on the Indonesian economy which include "Tax Policy, Growth, and Income Distribution in Indonesia: A Computable General Equilibrium Analysis," "The Impact of State Restructuring on Indonesia's Regional Economic Convergence," and "The Management of Liquidity Risk in Islamic Banks: The Case of Indonesia."

A foreword to the Vol. 48, No. 2, 2012 issue of the "Bulletin of Indonesian Economic Studies" is presented.

This paper assesses the relationship between poverty reduction and economic growth in Indonesia before and after the Asian financial crisis. The annual rate of poverty reduction slowed significantly in the post-crisis period. However, the trend in the growth elasticity of poverty indicates that the power of each percentage point of economic growth to reduce poverty did not change much between the two periods. In both, service sector growth made the largest contribution to poverty reduction in both rural and urban areas. Industrial sector growth largely became irrelevant for poverty reduction in the post-crisis period even though the sector contributed the second-largest share of GDP. Agricultural sector growth, mean-while, remained important, but in rural areas only. The findings suggest the need to formulate an effective strategy to promote sectoral growth in order to speed up the pace of poverty reduction. [ABSTRACT FROM PUBLISHER]

The article offers information on the survey of the developments in the social, political, and economic trends and condition in Indonesia as of 2012. It explores the corruption scandals and the developments in the government led by Indonesian President Susilo Bambang Yudhoyono (SBY). It mentions the decline of the year-on-year gross domestic product (GDP) in the first quarter of 2012 with 6.3% compared to 6.5% in the three quarters of 2011.

A glossary of Indonesian economic terms and abbreviations is presented.

There is a growing confidence in policy, business and finance circles about Indonesia's ability to withstand global economic and financial shocks, and a renewed belief in domestic sources of growth. Despite uncertainty in Europe and slower than expected recovery in the US, Indonesia is well placed for moderately high growth in the medium term, and economic stability in the shorter term. At the end of June 2011, foreign reserves were at a record high, inflation was down, annual growth was steady at 6.5%, and investment – especially foreign direct investment (FDI) – was up significantly. Consumer price inflation had fallen to just below 5% by August, from double-digit levels earlier in the year. This was due partly to low food prices and success in sterilising the effects of capital inflows. However, turmoil in international markets led to a sharp fall in the Indonesia stock exchange index and a mild currency depreciation in August– September, prompting central bank intervention in the foreign exchange market. Fiscal policy has remained conservative, aiming for a balanced budget by 2014. However, the government has still not moved to reduce growing fuel and energy subsidies. While the service sectors have continued to record high rates of growth, there has been a revival of manufacturing in 2011. This is partly underpinned by strong inflows of FDI, and is especially evident in the labour-intensive textiles, clothing and footwear industries after a decade of stagnation. Multinationals have announced plans to expand operations in Indonesia in the past six months to take advantage of new tax incentives. Overseas investors have also been attracted by Indonesia's growing middle class – a result partly of higher rural incomes driven by the commodity boom outside Java. Some recent ministerial announcements about initiatives to promote domestic industry have a protectionist flavour. A cabinet reshuffle in October may signal a more dirigiste approach to industrial policy – especially the shifting of internationally respected economist Mari Pangestu from the trade portfolio to that of tourism and creative economy. One important outcome of recent growth has been falling unemployment rates. However, youth unemployment remains a major problem, and efforts to overcome it have been fragmentary. A recent ban on overseas migration of domestic helpers (maids) seems certain to add to labour supply pressures among young people. The government is now considering how to mobilise its large population base, abundant natural resources and strategic location to play a greater role in the world economy. These assets are central to the ambitious ‘Master Plan’ for longer-term development (2011–25), announced in May. It focuses on developing the resource-rich Outer Island regions, with massive investments in energy and ‘connectivity’ to link the major centres and islands with each other, and centres with their hinterlands. Funding (to come mainly from the private sector), implementation and coordination are all major challenges. [ABSTRACT FROM PUBLISHER]

This article details the argument for the economic origins of the secessionist challenge posed by Indonesia's four resource-rich regions. The desire of rich regions to retain their own wealth conflicts with the national goal of sharing social welfare for equitable development across the country. The grievances of relative deprivation and aspiration to inequality were related to the distribution of resource rent by the autocratic regime of Suharto. Democratic transition opened up political space in which the resource-rich regions addressed their grievances, pushing the country to the edge of disintegration. The main policy response to the problem was decentralisation as part of the overall democratisation process. The policy has been successful so far in achieving its political objective; however, in the long run, people of the rich regions may be disillusioned because there is a risk that the supposed economic benefits of decentralisation may not materialise. [ABSTRACT FROM AUTHOR]

The contribution of micro-entrepreneurship to development has featured prominently in recent economic and policy debates. Using panel data from the Indonesia Family Life Survey over a long period (1993-2007) marked by an important economic crisis in 1997, this paper investigates the impact of financial, human and social capital on households' participation in micro-entrepreneurship, while accounting for corruption as well as institutional and infrastructure quality. Larger urban households that have greater financial and social capital, and/or whose members have an elementary or secondary education, are more likely to participate. Corruption at the local parliament and local government levels reduces the number of participants, while higher-quality formal institutions and infrastructure boost entrepreneurship. The period is marked by a rise in participation in 2000, but communities that experienced a loss in well-being due to the crisis were less likely to participate in micro-entrepreneurship. [ABSTRACT FROM AUTHOR]

The article presents abstracts oF doctoral theses regarding the Indonesian economy which include the evaluation of education and health service decentralization, decentralization reforms and inequality in Colombia and Indonesia, and development and the Indonesian Constitutional Court from 2003-2008.

The banking sector traditionally dominated Indonesia's financial system, and until the 1990s the stock market remained of little significance. Re-opened in 1977 after two decades of inactivity, the stock exchange made little contribution to Indonesia's development until a series of reform and deregulation measures were implemented from December 1987. This study examines the evolving role of the stock market in the financial system, and analyses changes in its efficiency over time. We find that stock market activity grew markedly in importance relative to banking after the reforms began to take effect, gaining the ascendancy in 2004 and moving well ahead subsequently. One contributor to this success is improvement in efficiency. Using two simple technical trading rules, we demonstrate that the stock exchange secondary market has indeed become significantly more efficient over time. [ABSTRACT FROM AUTHOR]

This note provides a critical perspective on the preliminary results of the 2010 population census, which were announced by President Yudhoyono on 16 August 2010. It explores the concepts of population used and the adjustments made to increase the accuracy of census estimates. The assumptions underlying various official population projections in the last decade produced estimates for mid-2010 that were substantially below the figure of over 237 million persons counted in May. The note argues that, far from reflecting a 'population explosion', this is due to the achievement in the 2010 census of greatly increased coverage of people residing in Indonesia on the census date. [ABSTRACT FROM AUTHOR]

Soeharto era concern about corruption was deflected by the establishment of toothless anti-corruption committees, and by suppression of anti-corruption activism and media comment. With Soeharto's demise, activists began to publicise their concerns more openly - at first speaking in general terms, but later making increasingly specific allegations. The sporadic activism of the Soeharto years was consolidated, first through cooperative action among similarly motivated informal groups, and later through establishment of formal civil society organisations (CSOs) intent on rolling back corruption. The CSOs have played a key role in pushing for new laws and institutions to help eradicate corruption, and many corrupt officials have been imprisoned. This paper finds little evidence, however, that corruption has declined significantly. It argues that further progress depends on CSOs gaining a better understanding of the underlying causes of corruption, and that these are to be found in public sector personnel management practices. [ABSTRACT FROM AUTHOR]

Little has happened to dispel concern that reform momentum is dissipating. New National Economic and Innovation Committees to help accelerate development will probably achieve little: resolving many key economic policy issues is straightforward technically, so the real obstacle to doing so is lack of political will and leadership. It appears that economic growth has stabilised rather than continuing to accelerate. Investment is still strong, but fiscal policy is no longer providing a stimulus. Soeharto-era attachment to small budget deficits remains evident in the 2011 budget, which persists in spending heavily on subsidies at the expense of investment in sorely needed infrastructure. The demand for net exports had temporarily constrained growth, but by Q2 2010 this was no longer the case. Manufacturing has been in the doldrums, partly because of surging export commodity prices and volumes, but its recent growth seems more promising. International reserves continue to accumulate because of the commitment of Bank Indonesia (BI) to avoiding rupiah appreciation, which makes monetary policy difficult and costly to implement. BI has responded by allowing some appreciation, an acceleration of inflation and a small increase in the interest rate on its certificates of deposit, and by forcing banks to place more funds with it at low or zero interest. At last it has begun to tighten monetary policy, but this is likely to increase capital inflow, despite the introduction of a new capital control. The incompatibility of BI's monetary and exchange rate policies will therefore continue to cause problems. Rapid rice price inflation, however, is not the fault of the central bank, but a consequence of the policy of preventing Indonesia from participating more fully in the world rice market. Official indicators suggest that the banking sector is in good condition. One concern is that interest margins are too high, which seems to be attributable to inefficiency in government-owned banks. If pressure to prevent or roll back increased foreign ownership of Indonesian banks is successful, this is likely to make the banking system even less efficient. Indonesia continues to have difficulty competing for foreign investment with comparator countries such as Thailand, Vietnam and Brazil: much remains to be done to improve the climate for doing business. The government appears to be pondering more serious approaches to tackling the problem of Jakarta's congestion, although conflicting signals on this have emerged. Solutions are seen in expansion of transport infrastructure and improvement of its management, and in the introduction of electronic tolling on main roads. [ABSTRACT FROM AUTHOR]

Scholars interested in the promotion of “good governance” and those interested in transnational advocacy networks both are concerned with the potential power of external actors to alter domestic political structures. This article analyses the networks promoting neo-liberalisation and democratic practices in Indonesia's forestry sector as rival transnational networks. The analysis finds that the Asian economic crisis and collapse of the Suharto regime provided a political opening for alliances between the two rival networks that helped to bring down the ruling oligarchy in timber, but the power of domestic oligarchs controlling the sector remains strong. In brief, there are limits to the power of both external networks vis-a-vis domestic power relations. Given the financial resources and constraints on non-governmental organisations, they may be unable to alter the deep structures of capitalist accumulation and distribution based in Indonesia's forest resources. [ABSTRACT FROM AUTHOR]

The Asian economic crisis in 1997 helped bring down Suharto's authoritarian regime in 1998. At the same time it paved the way for more measures of economic liberalization. Some of these measures have taken the form of labor market liberalization, which aims to increase the labor market's ability to adjust to changing economic conditions by clearing what are seen as burdensome regulations, or “rigidities” as they are known in economic parlance. An important instrument in this effort is the private employment agency, which the Manpower Act no. 13/2003 introduced in 2003. This article argues that the introduction of these agencies has created opportunities for various actors in society to take advantage of the less-protected workers in the uncertain waters of the post-Suharto labor regime. In the process, the nature of industrial relations has also been changed in a way that is more predatory than liberal. Ultimately the agencies help erode the hopes for a better life for workers and undermine the revival of labor political rights in Indonesia. [ABSTRACT FROM AUTHOR]

Indonesia's garment industry is a relatively young industry which only emerged as a factory activity around the mid-1970s. This was in response to an expanding domestic market and growing export opportunities. Before the 1970s garment production was largely conducted in small tailor shops all over the country. Since the mid-1980s to the Asian economic crisis of 1997-98 the garment industry has emerged as one of the most important export-orientated industries, generating increasing foreign exchange revenues and job opportunities for low-skilled, mostly women workers, because of its labour-intensive production process. After the Asian economic crisis, garment exports declined because of declining competitiveness in the face of strong competition from other developing countries, particularly China and Vietnam. Unfortunately, due to its relatively low international competitiveness, Indonesia's garment industry was not able to take full advantage of the expiry of the Multi-Fibre Arrangement in early 2005 to expand and increase its exports. [ABSTRACT FROM AUTHOR]

Political and economic stability prevailed in Indonesia to early June 2007. President Yudhoyono made some badly needed changes to his cabinet, but left the core economic team unchanged. This inspired further confidence in the government's economic policies, yet it still fails to satisfy public expectations. The Lapindo mudflow disaster continues to weigh on the government, with no clear strategy apparent. The economy shows stable macroeconomic fundamentals. Growth remained at around 6% p.a., driven mainly by investment and exports. The exchange rate strengthened and the stock market continued its rise. The central bank lowered the policy interest rate further, but this is likely to have little effect on growth, and brings some macroeconomic risks. Increasing or even maintaining current growth rates could be a challenge, given that export growth depends strongly on the global commodity boom, and improvements in the investment climate remain uncertain. The parliament passed the long-awaited new investment law, which promises a more open and friendly investment regime. Doubts surround the implementation of the law, however. There are concerns that the new negative list could be overly protective and that the continued role of the Investment Coordinating Board may cause coordination problems among agencies and with sub-national governments. Boosting growth in manufacturing could be the key to higher overall growth. Structural change in the manufacturing sector over recent years has seen labour-intensive industry decline in terms of both output and exports, mainly because of rigid labour policies. Efforts to boost private sector investment in infrastructure still show limited success. Implementation of regulatory and bureaucratic reforms is ineffective, and domestic financing remains in short supply. Public provision of infrastructure needs to increase, but suffers from shortcomings in fiscal management and a mismatch between the often cross-district nature of infrastructure projects and the now strongly district-based budgetary authority. Electricity supply exemplifies how the lack of well-designed investment strategies limits Indonesia's growth potential. Power sector investment has stagnated despite strong growth in electricity demand, and current plans for coal-based capacity expansion lack thorough planning. An emerging long-term challenge for policy makers is climate change. Ahead of the December UN climate change conference in Bali, recent reports have highlighted Indonesia's vulnerability to climate change and its contribution to global greenhouse gas emissions, predominantly from deforestation. Slowing or halting of deforestation is unlikely to occur without large-scale international financial flows. [ABSTRACT FROM AUTHOR]

China's and Indonesia's development strategies have been compared with others, but rarely with each other. Radically different political contexts have produced both similar and distinctly different development patterns. Each using formal planning, Indonesia spurred radical reforms to promote growth, whereas China opted for incremental reforms to 'grow out of the Plan', as a political device and to discover what policies and institutions worked. Both strategies produced environments largely conducive to rapid development. Indonesia relied on a few economic technocrats to oversee development; China used decentralisation and party reforms to create a credible environment for non-state investment. Both shared concern for agricultural reform and food security; both opted to open up for trade - China gradually, Indonesia radically. Both did well in growth and poverty reduction following reform. China's growth performance is in a league of its own, especially since Indonesia's Asian crisis setback, but Indonesia had more equitable growth and survived a difficult political transition with, in hindsight, modest costs. [ABSTRACT FROM AUTHOR]

The rapid expansion of cocoa farming among Sulawesi smallholders since 1980 has transformed the island into a hub within the global cocoa industry. It hosts a number of multinational trading firms and has an expanding grinding sector. In recent years, however, the cocoa sector has been struck by severe pest, disease and quality problems, which are undermining the long-term sustainability of one of Eastern Indonesia's most important rural industries. Some form of intervention is needed if the cocoa industry is to avoid steady decline. This paper examines the role of informal institutions, cocoa multinationals and government in attempts to maintain farm profits in Sulawesi. [ABSTRACT FROM AUTHOR]

Indonesia is at a vital juncture in the direction of its fisheries management. There is ample evidence that fisheries resources throughout Indonesia continue to decline and that over-fishing not only persists but is a growing problem. Without government intervention, fisheries, like other natural resources, are subject to open access and therefore over-exploitation. Confronted with the drive to increase fisheries production to benefit the economy, spur business development, provide an essential food source and maintain local livelihoods, the government must at the same time seek to ensure that this resource is not depleted. The enactment of a new statute governing fisheries affords an opportunity to balance these competing goals and address some serious problems in fisheries management and enforcement. This paper analyses Law 31/2004 on Fisheries and concludes that, given early indications on implementation, the government should more aggressively improve the regulatory and enforcement mechanisms needed to achieve sustainable fisheries management. [ABSTRACT FROM AUTHOR]

Clifford Geertz was best known for his pioneering excursions into symbolic or in terpretive anthropology, especially in relation to Indonesia. Less well recognised are his stimulating explorations of the modern economic history of Indonesia. His thinking on the interplay of economics and culture was most fully and vigorously expounded in Agricultural Involution. That book deployed a succinctly packaged past in order to solve a pressing contemporary puzzle, Java's enduring rural poverty and apparent social immobility. Initially greeted with acclaim, later and ironically the book stimulated the deep and multi-layered research that in fact led to the eventual rejection of Geertz's central contentions. But the veracity or otherwise of Geertz's inventive characterisation of Indonesian economic development now seems irrelevant; what is profoundly important is the extraordinary stimulus he gave to a generation of scholars to explore Indonesia's modern economic history with a depth and intensity previously unimaginable. [ABSTRACT FROM AUTHOR]

This article says that the New Order redefined, perpetuated, and instnimentalised the "Chinese problem" by depicting the entire Chinese minority as an economically rich group. It achieved this by taking three essential steps: 1) the Chinese were marginalised by the so-called assimilation programme that, indeed, was not meant to assimilate them; 2) they were kept visible by discriminating against them; 3) they were finally stigmatised as wealthy expropriators. The idea that "the Chinese constitute only 3% of the population but control more than 70% of the Indonesian economy," is a widely spread and accepted prejudice against Indonesians labelled as Chinese.

Unprecedented industrial development during the last two decades, accompanied by a growing population, has increased the amount of environmental damage in Indonesia. A critical environmental problem is the rising level of air pollution in several large cities. This has stimulated the government to develop a national program designed to control the quantity of pollutantsin the air. However, the program's impact on economic performance and incomes has not yet been studied systematically. This paper analyses the expected impact of the clean air program on national economic performance and household incomes for various socio-economic groups. [ABSTRACT FROM AUTHOR]

Reports on economic conditions in Indonesia following the resignation of President Soharto and his replacement by Vice President B.J. Habibe in May 1998. Resumption of external assistance by the international community; Factors that may explain the staggering economic collapse; Short-term private sector debts; Rise in violence against property and persons; Mixed performance of Habibe's government; Monetary policy.