Indonesia and Globalization

Category: Globalization

Kevin Shapiro, Louis Sitbon, Casey Blue James

Basic economic overview: Indonesia has a market economy, and has undergone economic reforms under President Yudhoyono (tax and customs reforms, Treasury bills, capital market supervision). It's been slow to privatize over 100 state-owned enterprises.
GDP growth rate: 6.1 %
Labor force (composition): 108 million workers (43.3% in agriculture, 18% in industry, 38.7% in service industries)
Inflation rate: 6.3%
Indonesia's role in globalization in the last 25 years:
In 1983 there was a significant drop in oil prices. This led the government to liberalize trade policies to increase exports and cut the budget. Foreign investment and private domestic money have increased. However, there is a high rate of over-borrowing and "crony-capitalism" exists. These latter two problems pose a threat to Indonesia's currency.