The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck

The global economic crisis has caused economic collapse in many countries. Indonesia is obviously affected by this crisis, its export growth declined significantly. Nevertheless, the impact of the crisis on the Indonesian economy is relatively limited compared to other countries in the region, inclu...

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Main Authors:	Basri, Muhammad Chatib, Rahardja, Sjamsu
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Business Fluctuations Cycles E320 Financial Markets and the Macroeconomy E440 Financial Crises G010 Macroeconomic Analyses of Economic Development O110 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190 Fiscal and Monetary Policy in Development O230
Online Access:	http://hdl.handle.net/10986/5160

id	okr-10986-5160
recordtype	oai_dc
spelling	okr-10986-51602021-04-23T14:02:21Z The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck Basri, Muhammad Chatib Rahardja, Sjamsu Business Fluctuations Cycles E320 Financial Markets and the Macroeconomy E440 Financial Crises G010 Macroeconomic Analyses of Economic Development O110 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190 Fiscal and Monetary Policy in Development O230 The global economic crisis has caused economic collapse in many countries. Indonesia is obviously affected by this crisis, its export growth declined significantly. Nevertheless, the impact of the crisis on the Indonesian economy is relatively limited compared to other countries in the region, including Singapore, Malaysia, and Thailand. This situation leads into a question of why the impact of the global crisis on the Indonesian economy is relatively limited so far. Is it because of the structure of Indonesia's trade or the effectiveness of Indonesia's fiscal policy and monetary response? This paper argues that there are at least two reasons why Indonesia's performance was relatively good. Firstly, it was due to the appropriate policy responses both from Bank Indonesia and the Indonesian government. Secondly, Indonesia's relatively small export share to GDP saved the country from the global financial crisis. This was more a case of good luck than deliberately planned economic policy strategy. Nevertheless, this paper indicates that exports are a source of Indonesia's economic growth. Exports have a large effect in supporting economic growth, albeit less stable compared to domestic demand. Because of this, a strategy safeguarding a balance between domestic economy and global orientation, such as becoming a part of a production network and promoting export-oriented growth, must be a part of the development strategy of the national economy. 2012-03-30T07:31:35Z 2012-03-30T07:31:35Z 2010 Journal Article ASEAN Economic Bulletin 02174472 http://hdl.handle.net/10986/5160 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Indonesia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Business Fluctuations Cycles E320 Financial Markets and the Macroeconomy E440 Financial Crises G010 Macroeconomic Analyses of Economic Development O110 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190 Fiscal and Monetary Policy in Development O230
spellingShingle	Business Fluctuations Cycles E320 Financial Markets and the Macroeconomy E440 Financial Crises G010 Macroeconomic Analyses of Economic Development O110 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190 Fiscal and Monetary Policy in Development O230 Basri, Muhammad Chatib Rahardja, Sjamsu The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck
geographic_facet	Indonesia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	The global economic crisis has caused economic collapse in many countries. Indonesia is obviously affected by this crisis, its export growth declined significantly. Nevertheless, the impact of the crisis on the Indonesian economy is relatively limited compared to other countries in the region, including Singapore, Malaysia, and Thailand. This situation leads into a question of why the impact of the global crisis on the Indonesian economy is relatively limited so far. Is it because of the structure of Indonesia's trade or the effectiveness of Indonesia's fiscal policy and monetary response? This paper argues that there are at least two reasons why Indonesia's performance was relatively good. Firstly, it was due to the appropriate policy responses both from Bank Indonesia and the Indonesian government. Secondly, Indonesia's relatively small export share to GDP saved the country from the global financial crisis. This was more a case of good luck than deliberately planned economic policy strategy. Nevertheless, this paper indicates that exports are a source of Indonesia's economic growth. Exports have a large effect in supporting economic growth, albeit less stable compared to domestic demand. Because of this, a strategy safeguarding a balance between domestic economy and global orientation, such as becoming a part of a production network and promoting export-oriented growth, must be a part of the development strategy of the national economy.
format	Journal Article
author	Basri, Muhammad Chatib Rahardja, Sjamsu
author_facet	Basri, Muhammad Chatib Rahardja, Sjamsu
author_sort	Basri, Muhammad Chatib
title	The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck
title_short	The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck
title_full	The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck
title_fullStr	The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck
title_full_unstemmed	The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck
title_sort	indonesian economy amidst the global crisis : good policy and good luck
publishDate	2012
url	http://hdl.handle.net/10986/5160
_version_	1764394166766272512

The Indonesian Economy amidst the Global Crisis : Good Policy and Good Luck

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