Policy reforms in indonesia: A political economy perspective

Abu Nm Wahid, Mohamad Ikhsan

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


During the 1970s Indonesian economy grew at a rapid rate. This growth was primarily attributable to the government's oil revenue and massive expansion of public sector in Indonesia. However, the decline of oil price of the 1980s adversely affected the growth and stability of the economy. The government clearly recognized the fact that a restructuring of the economy was imperative. The present chapter is a critical analysis of this restructuring effort. It argues that the restructuring was initiated with a view to enabling the private sector and non-oil exports to play a greater role in the expansion of employment and income. The reform program began in 1983 with political and economic agenda. The political agenda includes the issues of Pribumism and ethnic diversity and economic nationalism while the economic agenda addressed the privatization initiative, fiscal/monetarypolicies and trade/investment policies. The reform process that was initiated by the government was partially successful. This chapter highlights the fact that the main reason for the reform not being fully successful is the corruption of the bureaucracy and too much political orientation of the policies.

Original languageEnglish
Title of host publicationThe ASEAN Region in Transition
Subtitle of host publicationA Socioeconomic Perspective
PublisherTaylor and Francis Ltd.
Number of pages17
ISBN (Electronic)9780429801938
ISBN (Print)9781138341562
Publication statusPublished - 1 Jan 2019


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