Indonesia's role in globalization (morrie bossen, nicanor mandin, stephen huang)

Category: Globalization

Basic Overview - Currently, the free capital markets are underdeveloped in Indonesia. However, the stock markets in Indonesia are among the best, and global investors frequently participate in this stock market. The services sector accounts for 45.3% of the GDP (in 2005), followed by industry and agriculture, 40.7% and 14%, respectively. Indonesia's largest main export markets are Japan, the United States, China, and Singapore (in that order). The major suppliers of imports to Indonesia are Japan, China and Singapore.

GDP Growth Rate for 2007: 6.1%
Inflation Rate for 2007: 6.3%
The fact that inflation rate is greater than GDP rate is bad for Indonesia's economy, but since the difference between the two figures is tiny, Indonesia's economy is more stagnant than delcining.
Labor Force Total: 108 million
Labor Force by Occupation: Agriculture: 43.3%
Industry: 18%
Services: 38.7%

Role in Globalization: In the 1960's, economic nationalism opposed globalization, which resulted in a severly deteriorated economy and political instability. In the 1970's, stability was brought due to the New Order administration. The export of oil by Indonesia resulted in the increase in foreign investment and contributed to sustain high economic growth rates. The increased foreign investment from the 1970s flowed into Indonesia to create a big export oriented manufacturing sector. When the East Asian Financial Crisis hit in 1997, Indonesia was the hardest hit country and the economy shrunk by 13.7%.