Part 2 National Differences After Suharto, Indonesia moved rapidly toward a vig- sidy was costing the government almost $20 billion a orous democracy. In 2004, the country's first directly year, or 15 percent of total government outlays. Widodo elected president, Susilo Bambang Yudhoyono, took also announced plans to boost public infrastructure, in- power. Yadhoyono was elected to a second term in 2009. vesting in 5 deep-Sea and 24 feeder ports, 10 airports, In 2014, he was succeeded by the current president, Joko 25 hydroelectric dams, 2,000 kilometers of roads, and CLOSING CASE Widodo. Freedom House, which tracks the state of politi- 10 industrial parks. These acts were followed by a number cal freedom around the world, aotes that Indonesia has The Political and Stuani Evolus.oh wonesia of measures designed to deregulate the economy. Import "free and fair elections, although they criticize the coun restrictions on some goods were removed, the time required Indonesia is a vast country. Its 260 million people are stendily, but there was a cont. Suharto brutally repressed try for restrictions on civit liberties, freedom of move spread out over somno 17,000 islands that span to process investment permits was reduced substantially, arc internal dissent. He was also famous for "csony capital meat, and freedom of the press. Freedom House also and some onerous business regulations were abolished. 3.200 miles long from Sumatra in the west to Irian Jaya in the east. It is the most populous Moslim nation-home the business enterprises of his supporters and family. In notes that Indonesia has high levels of public corruption Widodo has also repeatedly signaled that Indonesia will be 86 percent of the population count themselves as the end, Suharto was overtaken by massive debts that Transparency International, which ranks countries ac. more welcoming to foreign investment than hitherto. Muslimebat it is also one of the most othnically diverse Indonesia had accumsaiated during the 1990s. In 1997. cording to their level of corruption, has given Indonesia a Despite these measures, Indonesia still faces signifi- More than 500 languages are spoken in the country, and the Indonesian economy went into tailapin. The Inter cant economic headwinds. One major problem: The separatists are active in a number of provinces. national Monetary Fund stepped in with a su billion poor score. It ranked Indonesia 88th out of the 168 na- For 30 years, tha strong arm of President Suharto rescue package. When it was revealed that much of this tions in 2015 with a score of just 36 out of a possible 100. economy is overly dependent upon commodities, money found its way into the personal coffers of Suharto On the economic front, progress has been somewhat held this sprawling nation together. Suharto was a vir the prices of which have fallen sharply in the wake of eco- tual dictator who was backed by the military establish and his cronies, people took to the streets protest, halting. Although Indonesia has consistently grown its nomic slowdown in China. Then there is the persistently ment. Under his rule, the Indonesian economy grow and he was forced to resign economy, growth has been at a lower rate than in other high level of corruption, which continues to burden and Targe developing nations such as India and China. Eco- distort business activity in the country. There is also no nomic liberalism has never really taken hold in Indonesia move to reduce the number of state-owned enterprises Many industries are sheltered from foreign competition Many critics feel that for Indonesia to unleash its full po protectionist policies. These policies have their roots tential, it must do more to reduce corruption, privatize in the widespread belief that foreigners have long plun- inefficient state-owned companies, further deregulate its dered Indonesia's resources while leaving the country im economy, continue to improve its infrastructure, and do poverished. In 2014, the list of industries protected from more to attract long term foreign investors. foreign competition was expanded to include onshore oil So Freedom Hous, Freedom in the World 2015, Survey of extraction and commerce. To compound matters, the Indonesia: Time to Dellver." The Economic December 11, 2004 "Spicing government has frequently imposed price controls and Up Growth. The con May 9.2015: "The Unstimulating Stimo, heavily subsidized certain goods, most notably gasoline, The Biconomie October 17, 2018 Cu Wold Factbook. 2013; Mukul all of which distorts the market mechanism Rahele. "The Dire Need for Reform of Indonesia SOE Jakarta Pust, Moreover, several sectors are still dominated by incff- February 26, 2014 cient state-run enterprises. There are more than 140 state run enterprises in Indonesia accounting for about 20 Cose Discussion Questions percent of the country's gross domestic product. State 1. Under the leadership of Suharto, the Indonesian owned enterprises are widespread in energy, power produc economy grew at a steady pace. Why was this tion, transportation, aviation, agriculture, banking, and telecommunications. The country also suffers from chroni ultimately not sustainable? cally poor infrastructure, much of which is managed by 2. Since Suharto was removed, Indonesia has grown state-owned enterprises. There are simply not enough power its economy at a slower pace than two other large stations, roads, ports, and so forth. Indonesia has five times developing nations, India and China. Why do you the population of the United Kingdom but only half the think this has been the case? power generating capacity. Due to poor transportation in 3. What actions could Indonesia take to improve frastructure, logistics costs in Indonesia are 50 percent its economic performance? What impediments more than'in Thailand and twice as much as in Malaysia. might make it difficult for the Government to In 2014, Indonesia's new president, Joko Widodo, take these actions? pledged to liberalize the economy and improve infrastruc ture. In earty 2015, Widodo abolished the state subsidy Design Ernesta Irpieces (idea) CARTQU/Getty Images Problem CALMAGAMIShutterstock: All Others on gasoline, allowing the market to set prices. The sub- Mer Education Part 2 National Differences After Suharto, Indonesia moved rapidly toward a vig- sidy was costing the government almost $20 billion a orous democracy. In 2004, the country's first directly year, or 15 percent of total government outlays. Widodo elected president, Susilo Bambang Yudhoyono, took also announced plans to boost public infrastructure, in- power. Yadhoyono was elected to a second term in 2009. vesting in 5 deep-Sea and 24 feeder ports, 10 airports, In 2014, he was succeeded by the current president, Joko 25 hydroelectric dams, 2,000 kilometers of roads, and CLOSING CASE Widodo. Freedom House, which tracks the state of politi- 10 industrial parks. These acts were followed by a number cal freedom around the world, aotes that Indonesia has The Political and Stuani Evolus.oh wonesia of measures designed to deregulate the economy. Import "free and fair elections, although they criticize the coun restrictions on some goods were removed, the time required Indonesia is a vast country. Its 260 million people are stendily, but there was a cont. Suharto brutally repressed try for restrictions on civit liberties, freedom of move spread out over somno 17,000 islands that span to process investment permits was reduced substantially, arc internal dissent. He was also famous for "csony capital meat, and freedom of the press. Freedom House also and some onerous business regulations were abolished. 3.200 miles long from Sumatra in the west to Irian Jaya in the east. It is the most populous Moslim nation-home the business enterprises of his supporters and family. In notes that Indonesia has high levels of public corruption Widodo has also repeatedly signaled that Indonesia will be 86 percent of the population count themselves as the end, Suharto was overtaken by massive debts that Transparency International, which ranks countries ac. more welcoming to foreign investment than hitherto. Muslimebat it is also one of the most othnically diverse Indonesia had accumsaiated during the 1990s. In 1997. cording to their level of corruption, has given Indonesia a Despite these measures, Indonesia still faces signifi- More than 500 languages are spoken in the country, and the Indonesian economy went into tailapin. The Inter cant economic headwinds. One major problem: The separatists are active in a number of provinces. national Monetary Fund stepped in with a su billion poor score. It ranked Indonesia 88th out of the 168 na- For 30 years, tha strong arm of President Suharto rescue package. When it was revealed that much of this tions in 2015 with a score of just 36 out of a possible 100. economy is overly dependent upon commodities, money found its way into the personal coffers of Suharto On the economic front, progress has been somewhat held this sprawling nation together. Suharto was a vir the prices of which have fallen sharply in the wake of eco- tual dictator who was backed by the military establish and his cronies, people took to the streets protest, halting. Although Indonesia has consistently grown its nomic slowdown in China. Then there is the persistently ment. Under his rule, the Indonesian economy grow and he was forced to resign economy, growth has been at a lower rate than in other high level of corruption, which continues to burden and Targe developing nations such as India and China. Eco- distort business activity in the country. There is also no nomic liberalism has never really taken hold in Indonesia move to reduce the number of state-owned enterprises Many industries are sheltered from foreign competition Many critics feel that for Indonesia to unleash its full po protectionist policies. These policies have their roots tential, it must do more to reduce corruption, privatize in the widespread belief that foreigners have long plun- inefficient state-owned companies, further deregulate its dered Indonesia's resources while leaving the country im economy, continue to improve its infrastructure, and do poverished. In 2014, the list of industries protected from more to attract long term foreign investors. foreign competition was expanded to include onshore oil So Freedom Hous, Freedom in the World 2015, Survey of extraction and commerce. To compound matters, the Indonesia: Time to Dellver." The Economic December 11, 2004 "Spicing government has frequently imposed price controls and Up Growth. The con May 9.2015: "The Unstimulating Stimo, heavily subsidized certain goods, most notably gasoline, The Biconomie October 17, 2018 Cu Wold Factbook. 2013; Mukul all of which distorts the market mechanism Rahele. "The Dire Need for Reform of Indonesia SOE Jakarta Pust, Moreover, several sectors are still dominated by incff- February 26, 2014 cient state-run enterprises. There are more than 140 state run enterprises in Indonesia accounting for about 20 Cose Discussion Questions percent of the country's gross domestic product. State 1. Under the leadership of Suharto, the Indonesian owned enterprises are widespread in energy, power produc economy grew at a steady pace. Why was this tion, transportation, aviation, agriculture, banking, and telecommunications. The country also suffers from chroni ultimately not sustainable? cally poor infrastructure, much of which is managed by 2. Since Suharto was removed, Indonesia has grown state-owned enterprises. There are simply not enough power its economy at a slower pace than two other large stations, roads, ports, and so forth. Indonesia has five times developing nations, India and China. Why do you the population of the United Kingdom but only half the think this has been the case? power generating capacity. Due to poor transportation in 3. What actions could Indonesia take to improve frastructure, logistics costs in Indonesia are 50 percent its economic performance? What impediments more than'in Thailand and twice as much as in Malaysia. might make it difficult for the Government to In 2014, Indonesia's new president, Joko Widodo, take these actions? pledged to liberalize the economy and improve infrastruc ture. In earty 2015, Widodo abolished the state subsidy Design Ernesta Irpieces (idea) CARTQU/Getty Images Problem CALMAGAMIShutterstock: All Others on gasoline, allowing the market to set prices. The sub- Mer Education