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Survey of Recent Developments

McLeod, Ross

Description

The new government of Susilo Bambang Yudhoyono (SBY) has been performing well relative to the standards of recent governments. The confidence of the business community in Indonesia's near-term future continues to improve, resulting in rapid growth of investment activity, steady gains on the stock market, and a return of private capital inflow. City skylines are again decorated with cranes for the construction of apartment buildings, shopping malls and the like, while expenditure on cars and...[Show more]

dc.contributor.authorMcLeod, Ross
dc.date.accessioned2015-12-13T22:45:21Z
dc.identifier.issn0007-4918
dc.identifier.urihttp://hdl.handle.net/1885/79719
dc.description.abstractThe new government of Susilo Bambang Yudhoyono (SBY) has been performing well relative to the standards of recent governments. The confidence of the business community in Indonesia's near-term future continues to improve, resulting in rapid growth of investment activity, steady gains on the stock market, and a return of private capital inflow. City skylines are again decorated with cranes for the construction of apartment buildings, shopping malls and the like, while expenditure on cars and motorcycles, cell phones and air travel is growing rapidly. The rate of economic growth is now not far below that typically achieved in the Soeharto era. Macroeconomic management is broadly on the right track. The budget deficit is small enough not to pose a problem of fiscal sustainability and, although the monetary authority continues to make things difficult for itself by pursuing conflicting targets, prices remain reasonably stable. At the microeconomic level, however, there are still plenty of causes for concern, the most serious of which, perhaps, is the dissipation of Indonesia's current oil price windfall in wasteful and extraordinarily costly subsidies to domestic consumption, notwithstanding the recent increase in domestic fuel prices. Little has been achieved in relation to privatisation, and the government has scant enthusiasm for it. Paradoxically, it is encouraging heavy private sector involvement in infrastructure, which would otherwise be provided by state enterprises. Such involvement will be difficult to achieve, partly for the same reasons that privatisation has been hindered, but not least because the government has yet to come to grips with the implications for pricing of infrastructure services if such activities are to be made profitable - a prerequisite for private sector involvement. Problems with infrastructure as they manifest themselves at lower levels of government are illustrated and analysed in this Survey by a short case study of West Java province and its capital city, Bandung. There has been a great deal of anti-corruption activity, resulting in several high profile arrests. But this falls far short of what is required to achieve significant improvement in the performance of the public sector, broadly defined, on which healthy and sustained growth of the economy depends heavily. The government has been slow to appoint new people to the top levels of the bureaucracy, and reformist ministers have also been frustrated by civil service rules and regulations that make it exceedingly difficult to appoint the best available individuals to these and other important positions.
dc.publisherRoutledge, Taylor & Francis Group
dc.rightsCopyright Information: © 2012 Indonesia Project ANU
dc.rightsCopyright Information: © 2014 Indonesia Project ANU
dc.sourceBulletin of Indonesian Economic Studies
dc.subjectKeywords: capital flow; economic growth; investment; political development; Asia; Eastern Hemisphere; Eurasia; Indonesia; Southeast Asia; World; Gruidae
dc.titleSurvey of Recent Developments
dc.typeJournal article
local.description.notesImported from ARIES
local.description.refereedYes
local.identifier.citationvolume41
dc.date.issued2005
local.identifier.absfor140202 - Economic Development and Growth
local.identifier.absfor140212 - Macroeconomics (incl. Monetary and Fiscal Theory)
local.identifier.ariespublicationMigratedxPub8106
local.type.statusPublished Version
local.contributor.affiliationMcLeod, Ross, College of Asia and the Pacific, ANU
local.description.embargo2037-12-31
local.bibliographicCitation.issue2
local.bibliographicCitation.startpage133
local.bibliographicCitation.lastpage157
local.identifier.doi10.1080/00074910500117271
dc.date.updated2016-02-24T09:49:35Z
local.identifier.scopusID2-s2.0-23844511589
CollectionsANU Research Publications

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