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The Indonesian Crisis

A Human Development Perspective

Aris Ananta

Publication Year: 2002

The book focuses on the impact of the 1997-99 economic crisis on human development in Indonesia, especially in 1998, its worst year. Based on the definition used by the UNDP, human development is analysed as covering human capital (education and health) and purchasing power. In this book, the concept of human capital is broadened to include freedom from fear, health, education, and migration. The first part of the book discusses the economic situation in Indonesia. The second elaborates on what happened to human capital during the crisis and the third part examines its effects on purchasing power. Because human development does not occur in a vacuum, the fourth part discusses some emerging issues in Indonesia. The book concludes with some thoughts on people-centred development, which may contribute to more sustainable development than the development concept that simply pursues high economic growth. With this people-centred development, growth rates of about 3 to 4 per cent are adequate, as long as Indonesia achieves success in human development.

Published by: ISEAS–Yusof Ishak Institute

Title Page, Copyright

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pp. v-vi

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pp. vii-viii

This book emanated from a workshop on “Socio-economic Conditions during the Indonesian Crisis” organized by the Department of Economics and Centre for Advanced Studies, National University of Singapore, in 2000. The workshop was made possible with a grant from the Faculty of Arts and Social Sciences, National University of Singapore. ...

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List of Contributors

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pp. ix-xii

Adrian Panggabean is a Lecturer at the University of Indonesia. At the time his chapter was written, he was Vice-President of Equity Research and Southeast Asian Economist at Nomura Singapore Limited. His research covers public finance, institutional economics, and macroeconomics. ...

Part I: Introduction

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pp. 1-2

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1. What Do We Learn from the Crisis? Insights on Human Development in Indonesia during 1997–99

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pp. 3-28

Economic development can be seen simply as sustainable economic growth over a long period. This is the narrowest definition of economic development, often equivalent to the concept of economic growth, which emphasizes capital accumulation. Without high economic growth, no development of social issues such as education and health can take place. ...

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2. Macroeconomic Recovery: Facts and Prospects

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pp. 29-52

The widely-held perception is that the economy has not improved. Yet, it may not be entirely true. If political headlines are used as proxy to the economy, this perception holds. In politics, as if the antagonism between President Wahid and the DPR (Parliament) is not enough, ...

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3. Indonesia’s Economic Transformation: Before and During the Economic Crisis

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pp. 53-75

It is a fact that Indonesia’s economic performance in the first thirty years of the New Order government had been fairly impressive. In 1969, Indonesia’s per capita income was only about US$70. By 1996, the per capita income had increased more than tenfold to US$1080. ...

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4. Modelling the Repercussions of Financial Shock on Socio-economic Indicators

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pp. 76-102

Despite the obvious deterioration of some socio-economic variables after the crisis, it is still not clear how the financial shock has transmitted into the social conditions. Almost all analyses on the subject have used socio-economic indicators “before and after”, and concluded that any deterioration detected was due to the financial crisis. ...

Part II: Human Capital

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pp. 103-104

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5. Freedom from Fear: Social Disruption and System of Violence in Indonesia

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pp. 105-158

This chapter attempts to elaborate “freedom from fear” as an essential social capital needed for Indonesia’s economic recovery. First, it argues that fear is an effect, but at the same time a cause of violence. The prolonged and systemic social disorder and violence triggered by the existence of cultural values justify violence and social structures ...

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6. Health Status of Indonesians During the Economic Crisis

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pp. 159-181

After two decades of sustained economic growth and rapid social development, as indicated by the reduction of poverty from 40 per cent to 11 per cent and the halving of the child mortality rate (GOI and UNICEF 2000, p. 1), Indonesia, in mid-1997, entered a period of sustained economic insecurity. ...

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7. The Indonesian Economic Crisis: Impacts on School Enrolment and Funding

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pp. 182-212

The impacts of the economic crisis in Indonesia on education enrolments and drop-out rates have not been as devastating as initially feared. School incomes, however, have been hit hard by the crisis. ...

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8. Population Mobility and Social Conflict: The Aftermath of the Economic Crisis in Indonesia

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pp. 213-244

An unprecedented reversed stream of population movement characterizes the pattern of Indonesia’s demographic configuration today. Thousands of migrant families were forced to leave their homes as rampant conflict erupted in several provinces that were previously major destination areas of the state’s transmigration policy. ...

Part III: Purchasing Power

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pp. 245-246

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9. Change in Consumer Price: Indonesian Cities, 1997–99

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pp. 247-265

When price levels increase but incomes do not increase proportionately, purchasing power will decline, as well as welfare. However, when the increase does not occur for all goods and services, but only for a particular group of goods and services, people may not have to suffer. The rising prices may force society to reduce the consumption of those particular goods/services, ...

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10. Social Safety Net Programmes in Indonesia: Some Efforts to Survive

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pp. 266-295

To overcome the impact of the crisis, the Government of Indonesia (GOI) has implemented a number of policies under the Social Safety Net (SSN) programmes. Managing a large and heterogeneous country in the midst of far-reaching political and economic transition, the GOI has stressed the importance of reaching as much of the affected population as possible.1 ...

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11. State-Created Socio-Cultural Poverty: Lessons from Some Micro Studies

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pp. 296-312

There is great variation in the perceptions and evaluations on the economic crisis in Indonesia made by academicians and practitioners. How did the crisis affect the people’s lives and how could it be solved? How was the socio-economic situation during 1998 and 1999? How vulnerable and miserable were the people at that time? ...

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12. The Labour Market in Indonesia during the Crisis

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pp. 313-342

One important aspect of the economic crisis at the macroeconomic level that would affect the quality of life of the people in Indonesia at the micro level is the adjustment in household or individual income, which depends largely on the adjustment in the labour market. A sharp economic contraction by almost 14 per cent in 1998 led to declining labour demand, ...

Part IV: Emerging Issues

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pp. 343-344

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13. Political Economy of Business Relations between Indonesia and Singapore

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pp. 345-361

Indonesia and Singapore easily stand at two ends of a continuum in the Association of Southeast Asian Nations (ASEAN), ranging from physical size and per capita national income to, most starkly, their responses to globalization and governance. Both the Indonesian state and government, synonymous with the dominant Golongan Karya (Golkar) ...

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14. Drug Abuse in Indonesia: An Increasing Problem During the Economic Crisis

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pp. 362-381

Indonesia is in the midst of a full-blown drug abuse and addiction crisis. From being practically unheard of in the past decade, drug abuse has suddenly become a major problem in the country. Years of denial with regard to drug abuse problems in Indonesia, or more importantly, reports that never stated the truth about the drug problem, ...

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15. Managing the Elderly in a Crisis Situation

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pp. 382-416

In many societies, the old people form a vulnerable and financially weak group in the population. They are vulnerable because of their poor health and physical condition, disabilities, social isolation, poor housing, and lack of care. They are financially weak because they do not have enough savings or their pension is too little to support their lives at old age. ...

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16. The Indonesian Crisis in an Alternative Perspective: Views from Outer Indonesia

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pp. 417-444

What is referred to as “the Indonesian crisis” is commonly depicted as having started in July 1997, when the devaluation of the Thai bhat led other Asian currencies into a tailspin. The “monetary” crisis that ensued, the collapse of the financial sector, the loss of many industrial jobs, the austerity measures imposed by the International Monetary Fund (IMF), ...


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pp. 445-448

E-ISBN-13: 9789812305169
Print-ISBN-13: 9789812301710

Page Count: 444
Publication Year: 2002

Edition: 1

Research Areas


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Subject Headings

  • Indonesia -- Economic conditions -- 1997-.
  • Indonesia -- Social conditions.
  • Indonesia -- Social policy.
  • Financial crises -- Social aspects -- Indonesia.
  • Financial crises -- Indonesia.
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