Indonesia Case Analysis

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Indonesia is one of the countries with abundance of natural resources with large populations. According to World Bank (2013) Indonesia is lower middle income country with GDP around 868.3 billion US dollar and the population is 249.9 million, while poverty headcount ration at national poverty line is 11.3% on 2014. The contention appear that this wealth resources country get the benefit or even get worse with the plenty of their natural resources. The economic growth in Indonesia in period 1970-1980 was promoted by the inclined production of oil and higher price of oil on world market. Rosser (2007) argues that Indonesia on Soehartoe’s regimes could overcome resource curse because of technocratic influence on macroeconomic and fiscal policy. …show more content…
In Indonesia’s case as Rosser (2007) claims that the conspicuously unusual economic growth in Indonesia over the period 1970s until 1980s was induces by oil and gas export with 70% annual revenues for central government, while the economic growth in these periods is between 6-10%. The question in here is what makes Indonesia could achieve economic growth and overcome the natural resource curse in this period and what the implications on this nation. To answer this question I will start to examine the policy behind the success story of Indonesia growth. First in the Soeharto era’s as a President of Indonesia he pursue the capitalist economic in Indonesia and with authoritarian leadership styles the implementation for economic policy could be easily addressed. Second factor is because government could control the rent seeking and invest the oil revenue on the lagging resources such as, agriculture and manufacture and diversify economic revenues from all

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