Indonesia : Avoiding the Trap

Within the next two decades Indonesia aspires to generate prosperity, avoid a middle-income trap and leave no one behind as it tries to catch up with high-income economies. These are ambitious goals. Realizing them requires sustained high growth an...

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Bibliographic Details
Main Author:	World Bank
Format:	Development Policy Review (DPR)
Language:	English en_US
Published:	Jakarta 2014
Subjects:	ACCOUNTABILITY ACCOUNTING ACTUAL COSTS AGRICULTURE AMORTIZATIONS ASSET QUALITY ASSETS AUTONOMY AVERAGE PRODUCTIVITY BALANCE SHEETS BANK CREDIT BANK FINANCING BANK RECAPITALIZATION BANKS BASIC EDUCATION BOND YIELDS BONDS BROKER BROKERAGE BUDGETING CAPITAL ACCOUNT CAPITAL FORMATION CAPITAL MARKET CAPITAL MARKETS CAPITAL STOCK CASH FLOW CASH FLOWS CENTRAL BANK CENTRAL BANK INDEPENDENCE COMMODITY PRICE COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMER DURABLES CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE GOVERNANCE COST OF LIVING CREDIT CONSTRAINT CREDITORS CURRENCY CURRENCY APPRECIATION CURRENT ACCOUNT DEFICIT DEBT DEBT LEVEL DEBT SERVICE DEBT STOCK DECENTRALIZATION DEFICIT SPENDING DEPOSIT DEVALUATION DEVELOPMENT POLICY DOMESTIC BOND DOMESTIC DEBT DOMESTIC DEBT SECURITIES DRIVERS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC SECTORS ELECTRICITY EMERGING ECONOMIES ENFORCEMENT MECHANISMS ENFORCEMENT OF CONTRACTS EQUIPMENT ESCROW EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS EXTERNAL DEBT EXTREME POVERTY FINANCIAL CRISIS FINANCIAL INTEGRATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCING REQUIREMENT FISCAL BALANCE FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICY FISCAL REFORMS FLOATING RATE FOREIGN INVESTORS GDP GDP PER CAPITA GLOBAL ECONOMY GLOBALIZATION GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT EXPENDITURE GOVERNMENT FINANCING GOVERNMENT REVENUES GOVERNMENT SPENDING GRANT ALLOCATION GROWTH POTENTIAL GROWTH RATE GROWTH THEORY HEALTH SPENDING HOUSEHOLD INCOMES HOUSING HUMAN CAPITAL HUMAN RESOURCES INCOME INCOME INEQUALITY INCOME LEVEL INFLATION INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INSTITUTIONAL DEVELOPMENT INSURANCE INTEREST PAYMENTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERGOVERNMENTAL FINANCE INVENTORY INVESTMENT DECISIONS INVESTMENT FUNDS INVESTMENT REQUIREMENTS INVESTOR PROTECTION ISSUANCE JOB CREATION LABOR COSTS LABOR FORCE LABOR MARKET LABOR MARKET ISSUES LABOR MARKET RIGIDITIES LABOR PRODUCTIVITY LABOR UNIONS LAND REFORMS LANDOWNERS LAWS LEGAL ENVIRONMENT LEGAL RIGHTS LEGAL SYSTEM LEGISLATION LICENSES LIQUIDITY LIVING STANDARDS LOCAL CURRENCY LOCAL GOVERNMENTS LOCAL INFRASTRUCTURE MACROECONOMIC STABILITY MANDATES MATURITY MATURITY MISMATCHES MATURITY SPECTRUM METROPOLITAN AREAS MULTIPLIER EFFECTS MUNICIPAL BONDS MUNICIPALITIES NATIONAL GOVERNMENTS NATURAL DISASTER NATURAL DISASTERS NOMINAL WAGES OIL PRICE PENSION PENSION FUND PENSION FUND ASSETS PHYSICAL ASSETS PHYSICAL SECURITY POLICY RESPONSE PRICE INCREASES PRICE RISKS PRIVATE BORROWING PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR PRIVATE SECTOR INVESTMENT PRIVATE SECTOR PARTICIPATION PRODUCT MARKETS PRODUCTIVITY PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES PROFITABILITY PROPERTY RIGHTS PUBLIC PUBLIC DEBT PUBLIC FINANCE PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC POLICY PUBLIC SECTOR PUBLIC SERVICE PUBLIC SERVICES PUBLIC SPENDING REAL GDP REAL INCOME REGULATORY BARRIERS REGULATORY FRAMEWORK REGULATORY STRUCTURES RETAINED EARNINGS RETURN REVENUE COLLECTION RISK AVERSION RISK MANAGEMENT RISK PROFILE ROADS SAFETY SAFETY NET SAFETY NETS SAVINGS SECURITIES SETTLEMENT SOCIAL SERVICES STOCK EXCHANGE STRUCTURAL CHANGE SUBNATIONAL GOVERNMENTS TAX TAX ADMINISTRATION TAX REFORM TAX REVENUES TOTAL FACTOR PRODUCTIVITY TOTAL OUTPUT TRADE BALANCE TRADE LAWS TRANSPARENCY TRANSPORT UNEMPLOYMENT URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBANIZATION VALUATION WAGES WEALTH WEALTH EFFECTS
Online Access:	http://documents.worldbank.org/curated/en/2014/05/19705081/indonesia-avoiding-trap http://hdl.handle.net/10986/18944

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Summary:	Within the next two decades Indonesia aspires to generate prosperity, avoid a middle-income trap and leave no one behind as it tries to catch up with high-income economies. These are ambitious goals. Realizing them requires sustained high growth and job creation, as well as reduced inequality. Can Indonesia achieve them? This report argues that the country has the potential to rise and become more prosperous and equitable. But the risk of 'floating in the middle' is real. Which pathway the economy will take depends on: (i) the adoption of a growth strategy that unleashes the productivity potential of the economy; and (ii) consistent implementation of a few, long-standing, high-priority structural reforms to boost growth and share prosperity more widely. Indonesia is fortunate to have options in financing these reforms without threatening its long-term fiscal outlook. The difficulties lie in getting the reforms implemented in a complex institutional and decentralized framework. But Indonesia cannot afford hard to not try harder. The costs of complacency, and the rewards for action, are too high.

Indonesia : Avoiding the Trap

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