indonesia economic development

INDONESIAN ECONOMIC DEVELOPMENT

   Historical background and style of the structure of the Indonesian economy can not be separated from the history of colonialism experienced by this country. As known, starting from the early 17 th century, the Indonesian people successively colonized by the Dutch trade union called the VOC, the Dutch Kingdom, the United Kingdom, and by the occupation government.

   Apart from these direct impacts, the impact of the crisis of American capitalism require attention seriously is the political development of the Indonesian economy in the long run. As a country that became the American colonies during the last 40 years, is substantially true, there is nothing really new for Indonesia. In fact, if the observed development of the Indonesian economy in the last two centuries, which is continuously faced this country, except in the Sukarno era, is the ongoing systematic process of permanent liberalization in Indonesia.

   The crisis has reduced the rate of economic growth in Indonesia. Dollar exchange rate had fallen sharply since July 1997 caused Indonesia's economic growth in the third quarter and fourth quarter declined to 2.45 percent and 1.37 percent. In the first quarter and second quarter of 1997, Indonesia recorded economic growth of 8.46 percent and 6.77 percent. In the first quarter of 1998 recorded a negative growth of -6.21 percent.

     Decline in economic growth can not be separated from the problem of private sector business conditions are more slow performance. This delay occurred partly because of the difficulty of getting raw material imports are not associated with receipt of LC Indonesia and burden of foreign debt payments are more swollen in line with the weakening rupiah and higher bank interest rates. Riots that swept several cities in the month of May 1998 is expected to further slow down private performance at the next turn further reduce economic growth, especially in the second quarter of 1998.

   Meanwhile, export growth in March 1998 showed that non-oil export growth that is encouraging about 16 percent. This growth rate is achieved thanks to the export commodity prices are more competitive with the falling value of rupiah. This increase contributed to a trade surplus jumped to 1.97 billion dollars compared with 206.1 million U.S. dollars in March 1997. Sharply declining imports is another factor creating the surplus. Imports in March 1998 fell by 38 percent in line with the decline in economic growth.  

   In addition, the direct impact of the crisis of American capitalism Indonesian real sector appear prominently on the occurrence of a sharp decline in export prices of primary commodities Indonesian couple. Oil prices, for example, in May 2008 that could penetrate U.S. $ 140 a barrel, later dropped drastically to around U.S. $ 35 per barrel. While the price of palm oil (Crude Palm Oil), which until mid-July 2008 continued to increase reaching the highest level of U.S. $ 1300 per ton, later fell quite sharply to only about U.S. $ 500 per ton. The picture is more or less the same can be seen in some other export commodities such as coffee, rubber, and cocoa.

   The greatest challenge facing the Indonesian people today really is not about anticipating the impact of the crisis or to determine a strategy to overcome. Much more fundamental than that is the growing urgency of the need to launch a series of struggles that real independence.

ekonomi fundamental

Economic Cycle

General economic conditions can be described in a repeating cycle.
In phase "expansion" of business activities develop, production and demand (demand) increases, increased employment, improved welfare, increased sales levels, the buildings constructed.
In this condition normally entrepreneurs and communities will borrow money (credit) to expand its business, which caused interest rates to rise.

Until the peak demand will exceed the capacity of goods while the money supply circulating in the community too much and jumped hargapun, a condition called "inflation".
Then there was phase "recession", where purchasing power is reduced, demand decreases, tesendat economic activity, employment decreases. Until eventually exceed demand and supply prices to be cheap, this condition is called "deflation".

With the low prices of the building began to pick up again and returned to the first phase.
The point is if there is inflation means prices will be high and the currency exchange rate low.
Hence the government of a country will try to curb inflation by controlling the supply of money in the community through interest rate policy centralnya bank.

Political & economic condition is very influential Americans to world economic conditions, because it was news and U.S. economic data is often used as a reference by investors against the movement of the world's major currencies.

Keep in mind that economics starts up (unbalance)", when the resources of a particular geographical make compliance with the area / people with the necessary resources. Of
imbalance towards equilibrium (balance) in fulfillment, a cycle that continues to move due to the process towards balance. Economic cycles caused temporary vacancies for compliance
equilibrium that makes the cycle spinning. Human beings with reason and faith (brain & will) attempt to meet the balance and then conducted a systematic fulfillment of balance, born of a science economy. However, the economics likewise created by human intervention that is not pure, which cause of excessive equilibrium and the desire to escape from the cycle economic.

The crisis today is the result of the economic cycle, when the economic system considered as a large ball with a fixed value of resources, economic values (economic value) is fixed. However, in real systems applied in the world, the drive wheel cycle based unbalance. It stopped. Large countries that seek out the reluctant cycle is at temporary vacancies to move the wheels of their economies. In the cycle there is always a resources rotation.

However, in practice countries are in the cycle (resourceful state) does not want to be in the opposite position. Desire and intention is that the wheels of the cycle disregarded and denied. Countries who hold certain powers "want" out of cycle, Countries with free-market deregulation will accumulate desire and a global prosperity was only a dream.