A Paper on Growth Diagnostics of Indonesia

February 6, 2013

I. Introduction

The goal of every country is to achieve not only sustainable development but also inclusive growth. Sustainable development, as defined by the Brundtland Commission, is a "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". Inclusive growth on the other hand, pertains to an equitable allocation of resources to every sector of the society which in effect decreases the rapid growth rate of poverty, at the same time increasing the involvement of its people to the growth of the country.
To be considered as an industrialized and developed country, one must take consideration on the political, social and most importantly the economic aspect in order for the country to be competitive in the market and also promote a high standard of living. Those prerequisites can be achieved by determining first the factors that trigger the economic growth of a country and that include infrastructures, human capital, literacy, safety, and other indicators.
In layman’s term, an economy can be defined as the system that is used to manage the resources in a country. It is often used as an indicator to measure how rich or poor a country and its people are. When an economy is doing well, the government is able to meet the needs of the people and its country.
In this paper, we will study the growth diagnostics of Indonesia to determine how far the developing country has grown and improved over the past few years and to know its current economic state.

II. Economy of Indonesia

Indonesia is considered as one of the largest national economy in Southeast Asia. In fact, according to Bloomsberg, Indonesia has surpassed other Asian countries aside from China in terms of gross domestic product which expanded 6.17 percent on the