Indonesia Economic Development Flashcards
When did the fasted growth take place in Indonesia, and why
1970s - oil crisis and sharp increase in oil prices
What was the context behind economic development in Indonesia from 1949 to 1965
Revolution, economic crisis
What was the government strategy from 1949 to 1965 (also consider ISI or EOI), and under who
Guided democracy, under Sukarno
- nationalisation
- import substitution
What was the context for economic development in the 1970s
Oil crisis
What were the government strategies in the 1970s, under who and what
Foreign investment and state led growth under Suharto’s new order
What were the 4 focuses of the economy in the 1970s
- agricultural development
- foreign investment and aid
- state corporations in ISI
- state infrastructural development
What is the context behind economic slowdown in the 1980s to 90s
Oil crisis, plunge in oil prices
What were the government strategies implemented from 1980s to 1990s
Deregulation and industrialisation
- deregulatory financial reforms
- development of private sector
What were the 3 factors that led to a weak foundation from 1949 to 1957
- damage from war for independence
- undiversified, largely agrarian economy (dominated by Dutch and Chinese capital)
- lack of indigenous capitalist class - government had to intervene for economic development
When did Sukarno impose guided democracy
1957
What were the 2 facets to economic nationalism from 1957 to 1965 under guided democracy
- Nationalisation of foreign property (mostly Dutch)
- Drive towards ISI
How many Dutch plantations and firms came under control of Indo government under Sukarno (hint, same number)
300 of each
Did Sukarno succeed or fail at ISI?
Fail
What plan was enacted in 1959, and why did it fail
8 year development plan
- lack of source of finance for government project expenditure
Why did ISI fail
Inexperience and inefficiency of Nasakom government
In what 2 ways were the inexperience and inefficiency of Nasakom governments evident (consider how the Dutch got replaced and foreign investment)
- Dutch managers replaced by Indonesian civil servants/military officers — little managerial experience
- Foreign investment and expertise rejected due to nationalism
Which 2 military adventures were costly for the Indonesians, and when did they happen
- Konfrontasi (1963-66)
- Seizure of Dutch ruled west-Irian (1961-62)
When did Sukarno establish the non aligned movement
1964
How much aid in billions did Sukarno receive from the communist bloc (its a round number)
1 billion
Which side did the PKI take during the Sino-soviet split
PRC
By how much did exports fall in Indonesia from 1959 to 1966 (number to number)
950 million to 690 million
From what to what did Indonesia run down on its foreign reserves by from 1960-67
300 million to 17 million
In what event did Suharto overthrow sukarno
Gestapu coup, 1965
What did Suharto base his political legitimacy on
Economic development
What group of people were the ‘Berkeley mafia’
US trained Indonesian economists that became Suharto’s technocrats, acted as chief mediators between Indonesia and the west
What did the Berkeley mafia aim to do
Seek foreign investment, especially by those frightened away by sukarno’s nationalist policies
Which law did the Berkeley mafia promulgate, and when, and what did it do i
1967 - foreign investment law, attracted foreign investors with tax concessions
When did Suharto end the Konfrontasi
1966
What stance proved attractive to the west that gained him more international support and legitimacy (hint, Cold War)
Anti - communist
When was asean founded, and what common ground was established
1967, anti-communist stance
What was the IGGI, when was it established and how much assistance was provided through there
Inter-governmental group on Indonesia, 1967, 2.6 billion from 85-86 from 14 nations
How much did per capital income rise by in the 1970s (multiple)
2x
What was the state procurement agency in charge of rice during Suharto’s time
Bulog
What was the name of the state agricultural programme during the green revolution, and what did they provide
BIMAS, credit and physical inputs for new varieties of seed to promote rice production
From 1968 to 1989, rice production increased from how many million tons to how many million tons
12 million to 29 million
What is the name of Indonesia’s state owned oil company
Pertamina
Which industry was Indonesia still reliant on entering the 1980s
Oil
Which 3 factors hampered Indonesia’s economic development (consider oil)
- decreased demand for oil due to global economic slowdown
- beginning of energy conservation efforts
- increased domestic production from major industrial economies such as the US
Which reform package led to a radical restructuring of the banking sector, and in what way
October 1988 reform package, loosened many regulations and gave private banks more breathing space
From what percent to what percent of total exports did non oil exports increase by from 1970s to 1980s
31% to 50%
What was the annual gdp growth rate in 1982 and how did that compare with the GDP growth rate of 1990
-2%, increased to 7%
What did the liberal economic environment inadvertently create (consider one of the economic development aims)
- wealth and economic power concentrated amongst large conglomerate cooperations and in the hands of Sino-Indonesian businessmen
By how many multiples did FDI into Indonesia increase by from 1980s to 90s
6x
From which 5 year plan did industrial targets outweigh agricultural ones
No.4
How much did inflation decrease by from Sukarno to Suharto (percentage to percentage)
Several thousand percent to 10%
Form what to what did life expectancy increase by from 1980 to 1990
50 to 60 years
In 1970, how many percent were below the poverty line, and what did this decrease to in 1987
60% to 17%
Form what percent to what percent did the 3 main export commodities decreased by from 1985 to 2000
69% to 30%
What were the limitations to the government strategies (5)
- Concentration of politico-economic interests
- Relative inequality
- Limited diversification and industrialisation
- Burden of external debt
- AFC policies and response
In what 3 ways was the powder of the state exercised in cronyism
- Granting licenses
- Influencing bank loans
- Implementing preferential tariffs and protection
What was the pertamina affair?
National oil company — ambitious investment program into LNGs
- miscalculated, oil prices stabilised and firm owed 10 billion USD
What was the percentage disparity between incomes of urban and rural areas in 1993
92%
Which event was an expression of resentment against Teheran bureaucratic capitalists and cukong (Chinese associates)
Malari riots
What was Suharto’s solution to overcrowding of java (and when), and did it succeed, and why or why not
Transmigration (presidential decree no.2 of 1973)
- did not succeed as soil was poorer quality to grow cash crops
- conflict between new settlers and local people of Sumatra, Sulawesi etc
The total number of banks increased from how many in 1988 to how many in 1994, and due to which policy
124 to 244, due to October 1988 reform package (easier banking licenses to acquire)
How much foreign debt was there in the private sector and how much was in the forex reserves of Indonesia
60 billion, 24 billion in forex reserves
What did the government immediately do to counter the AFC (2)
- raise interest rates
- attract capital back into the country
Why was Suharto’s commitment to IMF measures questioned (1 specific incident), and why were investors still not confident in Indonesia immediately after the AFC
- Suharto’s son suing the government for closing his bank — assets transferred from his bank to a smaller bank — showed government incompetency
- Investors noted the unbridled policy making autonomy around the president
What were the 3 factors that underscored the inability of the government to respond to the AFC
- Confusion as to how crisis should be handled
- Divisions within government (who was more of favour to Suharto)
- Ethnic tensions between indigenous community and economically dominant Chinese
In which year did Suharto claim his unrealistic GDP growth target, and what was it
1998, 4%
When was the IBRA established, what was it, and was it successful (why or why not)
1998 January, restructure country’s banks and manage pile of debt, too late to take any good effect
When did student mobilisation reach a national level (month)
Feb 1998
Who succeeded Suharto
B.J. Habibie
What did BJ habibie do after taking over (monetary policy, food security, banking sector, cronyism and financial oversight)
- tightened monetary policy
- emergency food imports to tackle food shortage
- overhauled banking sector by closing insolvent banks
- attempted to charge Suharto and family members with corruption
- strengthened financial oversight, bank of Indonesia given independence
Why were the Chinese limited in political power
Despite economic power, could not assume political power due to the social hatred against them
Did Sukarno prioritise ideology or pragmatism
Ideology
What percentage of the total Indonesian population was Chinese, and what percentage of control over the economy did they posses
4%, controlled 70% of economy
What ideology was Indonesia under when under Sukarno and Suharto respectively
- 3rd way
- Capitalist
What were the 2 prominent Chinese business groups
Astra, liem
