...Conclusion The Economic Problem / Challenges faced by Indonesia and the ways to overcome them. Indonesia’s economy has performed well in recent years. Economic growth, at around 5.8 percent in the past 10 years, has made Indonesia one of the world’s fastest growing large economies. But Indonesia faced the problem government in 2012 faces the ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to economic growth, increase in inflation and lack of technology. First, the most problem that Indonesia facing is poor infrastructure. Despite the country's rapid economic growth over the past few years, Indonesia still needs to improve its infrastructure to assure a long-term and sustainable growth Data released by Indonesia's Central Statistics Agency (BPS) Monday shows Indonesia's gross domestic product (GDP) grew 6.2 percent in the third quarter thanks to the strong domestic consumption and huge inflow of foreign investments despite the global economic slowdown. The Indonesian government has pledged to improve the country's infrastructure through massive public funding. Lawmakers also approved a land acquisition bill last year expecting to help pave the way for land clearance for infrastructure projects. Indonesia should decrease inflation rate by monetary policy, fiscal policy, exchange rate policy and wage control as well. The first step is for the monetary policy is to try and predict future inflation. They look at various...
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...ECONOMIC of INDONESIA “INFLATION” Created by: Gabriella Vidiananda 0810233017 Ira Ardella Putri 0810233023 Gilang Pradipta 0810233018 Accounting Department Faculty of Economic University of Brawijaya 2011 INFLATION Definition of inflation We often hear the word inflation (level of inflation) on television, in newspapers, magazines, and various other media. Inflation is one of economic symptom that has much attention from the economic expert. In many cases inflation is unbeneficial symptom and the people who has fix salary is the most harm. In principle, the definition or meaning inflation was widely noted scientists and experts in their field. With regard to the definition or meaning of inflation in according to experts, there are some following, in according to Winardi (1995: 235) definition or meaning of inflation is the period in which the purchasing power of the Monetary Union down. Inflation can occur when the amount of money or deposits in circulation is larger than the amount of goods and services. This is often supported by the loss of public confidence in the country vis-à-vis the domestic currency, which then cause symptoms that apply to exchange money to items. According to Bodie, and Marcus (2001: 331), the definition or meaning of inflation is the value at which the price level of goods and services in general has increased. According to Weston and Copeland (1998: 250), definition of inflation is the state of the economy that experienced...
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...very beginning the economic system in Indonesia is followed the Pancasila economic system. But, at the time before the new order, the economic system in Indonesia are liberal and statism that is not suitable for the citizen in the early of 50’s to 60’s. Before that time there are many program that already made by the government about the development of Indonesian economic, but that plan is not work as they are because the government not apply ‘the right man in the right place’. The economic activity that has to be handled by economist, at that time is handled by the politicians. So the fund is used in the sector of politics instead of economic activities. The problem that surfaced at that time is the abused of the foreign debt, the high inflation, and the population growth that are higher that the economic growth. After the new order, there are rehabilitations in the many aspects of life, and also decrease the rate of inflation at that time. All of that is included in the problem of economic in Indonesia such as; inflation, unemployment, poverty, income, and so on. Indonesian economy already experience the hyperinflation in the 1996, the inflation rate at that time is reached 650%. But, because of the development of economic growth, the hyperinflation now can be controlled According to the deputy of Indonesian Bank, the economic growth will be raise 6.3% - 6.5% with the level of inflation is 5% plus minus 1%. Besides, the economic growth also supported...
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...try to affect economic performance. Important topics in this mini project include the determinants of long-run economic growth, unemployment, inflation, and macroeconomic policy. In addition, this mini project are also able us to know the measurement of the standard living of a country in term of productivity, efficiency and effectiveness. Besides that, we are also able to determine what is measured by Gross Domestic Product, Inflation and etc as well as know how the government policy could contribute to improved productivity of the country. The picture below shows the brief idea how does Indonesia looks like. Picture 1: Tourism in Indonesia’s island Picture 2: Place to travel in Indonesia Picture 3: City in Indonesia Picture 4: Map of Indonesia Choose one country of the world The chosen country was Indonesia. The reason of Indonesia been chosen because Indonesia is given public an image that Indonesia is a lag behind country than other since there was a tragic event happened in Indonesia in the middle of 1997 all along. This causing Indonesian suffered a great deal and many of them have experienced a very large decline in their living standard. It was irony in Indonesia’s case seen a country that achieved decades of rapid growth, stability and poverty reduction, is now near economic collapse. No country in recent history like Indonesia, let alone one...
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...CHAPTER I Introduction Stability is a prerequisite for growth and equity so that the rate of inflation is too high to be lowered by interrupting the growth and impoverish the small people on low incomes and fixed. That is why after the 1965/1966 crisis and also after the 1997 crisis, lowering the inflation rate is a top priority in which the government and Bank Indonesia has succeeded admirably. In three years, inflation can be derived from 650 percent (1996) to 9 percent (1969), after 1997 inflation can also be reduced from 70 percent (1998) to only 5 percent (2003). But stability is not just for the sake of stability, but for something larger that is equitable and growth. After rising fuel prices, the prices become so high that people's purchasing power is still low. Economic growth indicate that the government has not been able to open employment opportunities to the people. Meanwhile, the business world also slows down. This is because the minimum wage increases the demand which must be fulfilled. Unemployed increased every year, in 2004 unemployment reached 10,854,254 people. Therefore, the purpose of making this paper are: 1. Knowing the concept and the relationship of inflation and unemployment. 2. determine the condition of inflation and unemployment in Indonesia 3. What the policy taken by the government to control inflation and reduce unemployment, increase employment. CHAPTER II Theory 2.1 Unemployment Unemployment...
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...1. Population of Indonesia With a population totaling around 250 million individuals, Indonesia is the fourth largest country with regard to population size. Its ethnic composition is characterized by a wide variety as the country contains hundreds of different ethnic groups and cultures. However, more than half of the population can be classified as belonging to the two main ethnic groups: Javanese (41 percent of the total population) and Sundanese (15 percent of the total population). Both these groups originate from the island of Java, Indonesia's most populous island, which contains almost sixty percent of the country's total population. When the island of Sumatra is included, this figure rises to approximately eighty percent of Indonesia's total population, indicating a significant population concentration in the western part of the country. The most populous province is West Java (with more than 43 million people), while the least populous province is that of West Papua in the far eastern region of Indonesia (having around 761,000 people). Map of Indonesia Five Most Populous Provinces (in millions) Province | Population | 1. West Java | 43.1 | 2. East Java | 37.5 | 3. Central Java | 32.4 | 4. North Sumatra | 13.0 | 5. Banten (Java) | 10.6 | Source: Statistics Indonesia Population Census 2010 This section discusses a number of important aspects regarding Indonesia's demographic composition...
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...whether Blundstone should expand their manufacturing production to Indonesia or not, based on PESTL and SWOT analysis. 2.0 Political Environment 2.1 Government Stability The political environment in Indonesia during the last decade was unstable, the performance of the government was rated unsatisfactory and they could not bring welfare to Indonesian citizen (Okezone 2014). SBY (Susilo Bambang Yudhoyono) as the former president of Indonesia himself admitted that SBY and his cabinet have not succeeded in clearing the corruption problems in Indonesia during his leading period (The Jakarta Post 2014). However, the new president of Indonesia, Joko Widodo, has applied some new changes in the government affairs in order to improve efficiency and effectiveness of government performance and to reduce the number of corruption problem in Indonesia (Kompas 2014). Therefore the new government are hoped to bring welfare to the Indonesian citizen. 2.2 Government Relations The relationship between Indonesia and Australia in the past seems to be unstable. Both countries started the diplomatic relation since 1947 when Australia took part as Indonesia’s representative for UNGOC (United Nations Good Offices Committee). A big conflict happened during 1986 when one of Australia’s newspapers took former Indonesia president, Soeharto, regarding their family’s financial issue as the newspaper’s main topic, but this problem was solved 2...
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...5 Abstract This paper investigates the impact of real interest rate on national saving in five Association of Southeast Asian Nations (ASEAN) of Indonesia, Malaysia, the Philippines, Singapore and Thailand. We analyze impact real interest rate to nation saving for ASEAN starting 1991-2013. Through an analysis from Excel, real interest rate is found to have significant impact on national saving during different stage of economic. Extensions using a graph reveal the impact of real interest rate in ASEAN-5 and thus mainly reflect heightened concerns to national savings amid the Asian financial crisis and the global financial crisis. Keywords: real interest rate, national saving, financial crisis 1.0 Introduction The world’s average saving rate has been declining since the first oil shock and through the early 1990s. However this trend conceals a large and increasing dispersion of saving rates, particularly among developing countries. The large heterogeneity in saving behavior is associated to country and time differences in levels of development, growth performance, and fiscal and financial policies. The level of real interest rates has once again become the focus of policy makers' concerned. To understanding the response of national saving to changes in interest rates is central to many issues in economic policy. For example, a reduction in the budget deficit would probably cause interest rates to decline. If personal saving declined as a result, the overall increase...
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...geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on Mars would not be considered a part of the world economy – even if currently exploited in some way – and could be considered of latent value only in the same way as uncreated intellectual property, such as a previously unconceived invention. It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind. 2.0 DEVELOPED COUNTRIES A developed country is a superior state that has a highly...
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...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...
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...O C C A S I O N A L PA P E R 178 IMF-Supported Programs in Indonesia, Korea, and Thailand A Preliminary Assessment Timothy Lane, Atish Ghosh, Javier Hamann, Steven Phillips, Marianne Schulze-Ghattas, and Tsidi Tsikata INTERNATIONAL MONETARY FUND Washington DC 1999 © 1999 International Monetary Fund Production: IMF Graphics Section Typesetting: Alicia Etchebarne-Bourdin Cataloging-in-Publication Data IMF-supported programs in Indonesia, Korea, and Thailand : a preliminary assessment / by Timothy Lane . . . [et al.]. — [Washington DC : International Monetary Fund], 1999. p. cm. — (Occasional paper, 0251-6365); no. 178 Includes bibliographical references. ISBN 1-55775-783-6 1. Indonesia—Economic policy. 2. Korea—Economic policy. 3. Thailand—Economic policy. 4. International Monetary Fund—Indonesia. 5. International Monetary Fund—Korea. 6. International Monetary Fund—Thailand. I. Lane, Timothy D. (Timothy David), 1955- II. Occasional paper (International Monetary Fund); no. 178. HC447.I44 1999 Price: US$18.00 (US$15.00 to full-time faculty members and students at universities and colleges) Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201 E-mail: publications@imf.org Internet: http://www.imf.org recycled paper Contents Preface I Overview Timothy Lane and Marianne Schulze-Ghattas References II Background to the Crisis Javier Hamann...
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...price ⁃ describe and make short analysis + preposition(s) about the impact of tax on cigarretes product (don’t forget to use elasticity in your analysis). 2. national income/economic growth, employment/unemployment, price/inflation ⁃ pick any developing country as the object of observation and describe + analise it’s condition using its national income, employment/unemployment, & its price index/inflation from time to time. It is better if you compare this country’s economic condition with a realtively developed country. Hint: visit World Bank website to access these data. 3. money & inflation ⁃ collect the M1 and inflation data for a country (any country), and analyse the periodes where it had relatively high rate of inflation and compare it with the periodes when it had relatively low and stable inflation rate. Explain those periods using comparison of V, M1 growth and inflation. 4. financial institution: saving & investment ⁃ Collect these data for any country: GDP , Investment, Saving, Tax Revenue, Government Spending. Assume it has a close economy system. Describe and analyse shortly about those data. Does that country has surplus of private and public saviing? What are your prepositions? Note: you should also check the country’s official budget (it’s called APBN for Indonesia). 5. open economy: exchange rate system, government policy (tax imports/exports, quota) ⁃ Describe and analyse how an exchange rate system that being used by a contry is affecting...
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...INDONESIA: The Causes, Effects and Lessons of the 1997 East Asian Financial Crisis by Zara Ahmed Julia Dreier Frank Ro April 9, 2007 FSPP 556: Macroeconomics Professor Kathryn Dominguez [pic] Introduction Following its independence in 1945, the Indonesia economy deteriorated drastically as a result of political instability, a young inexperienced government, and ill-disciplined economic nationalism. However, the New Order administration in the 1960s, brought about a new degree of discipline to economic policy that quickly brought inflation down, managed foreign debt, but more importantly, attracted foreign investment through financial liberalization. As massive inflows of foreign investment poured into the country, problems soon arose with regulation and oversight. These structural weaknesses created instability and ultimately multiplied the effects of the Asian Financial Crisis in 1997. With strong encouragement of the IMF, Indonesia adopted a set of policies to protect currency values and penalize insolvent companies, in order to restore investor and creditor confidence in the country. Despite assistance from the International Monetary Fund, the Crisis devastated the Indonesian economy and brought on massive social unrest. This paper consists of six parts. We intend to analyze pre, during, and post-crisis trends utilizing such macroeconomic models as the Mundell-Fleming model, the IS-LM model, and the open economy model for calculating...
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...Hong Kong Case Q1: Explain the mechanism of currency attacks. Currency attacks in emerging market economies and advanced economies occur by following some similar steps and stages but with some notable differences. Since this case is about an emerging economy so we will be discussing the mechanism of currency attacks in an emerging market. There are three following stages that lead an economy to full financial crisis. 1. Initiation of financial crisis 2. Currency crisis 3. Full-fledged financial crisis Stage 1: Initiation of Financial Crisis The reasons that leads an emerging market country towards financial crisis initiation includes the first two basic paths and some additional factors and they all make the problems of moral hazard and adverse selection worsen. A. Mismanagement of financial liberalization B. Severe fiscal imbalances C. Asset price decline D. Increase in interest rate E. Increase in uncertainty Financial liberalization is the eradication of restrictions from all the domestic financial institutions and markets and allowing them to trade with the financial firms of other nations. It has a benefit of financial development in long run but in short run it lead financial institutions to riskier lending (credit boom) and its mismanagement takes an economy towards a bubble. The financial institutions, regulators of bank, and other lenders in emerging economy do not have much expertise to cope the risk of this business line...
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...BI RATES AND EXPORT TAXES ON INDONESIAN PALM OIL INDUSTRY 1. INTRODUCTION Indonesia is the biggest producer of Crude Palm Oil (CPO) in the world which produced more than 25 million tons in 2012 and more than 200 trillion rupiahs in foreign exchange. The development of this industry, therefore, is important for the development of economy in Indonesia, as one tool to deal with problems faced such as poverty. This industry is also crucial in supporting the government in anticipating crisis of energy in the future due to the decreasing number of gas and oil over time. The increasing needs of renewable energy as the substitute of petroleum has also driven the demand of pam oil in international market. This high demand has led the price of palm oil in international market become higher. The high international price then persuade domestic producers to market their products to other countries, and this is a logic consequence since the companies as business entities always want to maximize their profit. The problem arise when all companies are forgetting the domestic market. Cooking oil, which is the end product of CPO, can be said as one of the most important goods in the market. Since the international price is more attractive than the domestic one, many producers of palm oil put more attention on their export rather than their distribution to domestic market. In order to deal with this problem, Indonesian government, like many other governments, imposes export tax on CPO. By...
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