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Indonesia's Economy since Independence

Thee Kian Wie

Publication Year: 2012

This book contains a collection of papers on various aspects of Indonesia's economic and its industrial development. It discusses the early independence period in the 1950s; the Soeharto era (1966-1998); and the ensuing two economic crises, namely the Asian Financial Crisis of 1997/98 and the Global Financial Crisis of 2008.

Published by: ISEAS–Yusof Ishak Institute

Title Page, Copyright

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Table of Contents

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pp. ix-x

In the course of my academic career, I have incurred many debts to my colleagues and friends in Indonesia and overseas for their encouragement and help in my academic endeavours, and for their books and papers and particularly for their helpful comments and suggestions on my papers which...

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pp. xi-xiii

The chapters in this volume are taken from the sources listed below, for which the author and publishers wish to thank their editors, original publishers or other copyright holders for the permission to use their materials as follows...

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pp. xv-xvii

This book contains a collection of papers on various aspects of Indonesia’s economy and its industrial development since the early 1950s. This date is chosen because Indonesia only achieved effective sovereignty over the whole territory of the former Netherlands Indies, with the exception of...

Part I: The Early Independence Period in the 1950s

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1. Indonesianization: Economic Aspects of Decolonization in the 1950s

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pp. 3-23

The late Professor Harry Johnson at the University of Chicago defined economic nationalism as ‘the national aspiration to having property owned by nationals and economic functions performed by nationals’ (Johnson 1972:26). Following this definition, the force of economic nationalism in...

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2. Indonesia's First Affirmative Policy: The Benteng Programme in the 1950s

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pp. 24-37

To a much greater degree than has been the case in the other newly-independent countries in Southeast Asia, economic nationalism in Indonesia has remained a potent force until the present. Although its contemporary manifestations has in general become less aggressive and less strident than they were in...

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3. The Debate on Economic Policy in Newly-Independent Indonesia between Sjafruddin Prawiranegara and Sumitro Djojohadikusumo

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pp. 38-65

In 1949, after a four-year long armed struggle, Indonesia finally achieved effective control over its entire territory, with the exception of West Irian (now Papua). Nevertheless, the young nation faced serious political and economic problems. The Japanese occupation and the long fight against the...

Part II: The Soeharto Era: 1966-1998

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4. Indonesia's Economic Development During and After the Soeharto Era: Achievements and Failings

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pp. 69-89

After presenting a brief overview of Indonesia’s rapid and sustained economic growth during Soeharto’s New Order era and its performance after the Asian economic crisis, this paper discusses the country’s economic and social achievements as well as its serious shortcomings during the...

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5. The Impact of the Two Oil Booms of the 1970s and the Post-oil Boom Shock of the Early 1980s on the Indonesian Economy

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pp. 90-106

Over the period 1974–1981 the Indonesian economy grew at a high and sustained average annual rate of 7.7 per cent. This rapid growth was to a large extent attributable to the considerable improvement in the country’s international terms of trade caused by the two oil booms Indonesia...

Part III: The Asian Financial Crisis and the Global Financial Crisis

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6. Indonesia's Two Deep Economic Crises: The mid-1960s and late 1990s

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pp. 109-125

This chapter discusses the two deep economic crises experienced by Indonesia, namely the crisis of the mid-1960s and the crisis of the late 1990s. The two deep economic crises of the mid-1960s and late 1990s led to a serious economic contraction, –3.0 per cent in 1963 and an even more serious...

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7. The Impact of the Global Financial Crisis on the Indonesian Economy and the Prospects for the Resumption of Rapid and Sustained Growth

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pp. 126-136

While in early 2008 the East Asian economies, including Indonesia, were tackling rising inflation caused by the surge in food and fuel prices, after the collapse of the Lehman Brothers in the U.S. on 15 September 2008 they were all confronted by an acceleration in the financial turbulence that had...

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8. Indonesia and the BRICs

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pp. 137-138

The Indonesian economy managed to achieve solid growth after successfully weathering the Global Financial Crisis (GFC) in 2008. The economy grew at 4.5 per cent in 2009, and is likely to grow at 6.0 per cent in 2010 and 6.2 per cent in 2011. This kind of performance is making many...

Part IV: Industrial Development

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9. Indonesia's Industrial Policies and Development since Independence

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pp. 141-174

Like in most other, newly independent countries, the leaders of newly-independent Indonesia considered industrialization as the best way to achieve a more balanced economy by lessening the country’s dependence on agriculture and develop their country more rapidly. To this end, the then Minister of...

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10. Policies Affecting Indonesia's Industrial Technology Development

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pp. 175-202

The competitive environment for Indonesia’s manufacturing industries has changed a great deal in years following the Asian economic crisis. The major factors in the global environment which have adversely affected Indonesia’s competitiveness in its manufactured exports include increasing...

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11. The Major Channels of International Technology Transfer to Indonesia: An Assessment

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pp. 203-229

Like other developing countries, Indonesia is a net importer of advanced technologies developed in the industrial countries. These technologies are crucial to generate and sustain the rapid economic growth necessary to raise the standards of living of the Indonesian people. In view of the...

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12. The Indonesian Wood Products Industry

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pp. 230-247

This chapter analyses the development of Indonesia’s wood products industry, particularly the plywood industry, which from a small base emerged in the 1980s as one of Indonesia’s major manufacturing industries. This account is of interest since it provides a good example of ‘export-substitution’, that is the...

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13. The Development of Labour-Intensive Garment Manufacturing in Indonesia

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pp. 248-270

Indonesia’s garment industry is a relatively young industry which only emerged as a factory activity around the mid-1970s. This was in response to an expanding domestic market and growing export opportunities. Before the 1970s garment production was largely conducted in small tailor...

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14. Indonesia's Auto Parts Industry

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pp. 271-295

This chapter on Indonesia’s auto parts industry, a medium-tech industry, assesses the past and present performance of this industry, including its export performance, and its prospects in the coming years. The reasons for its successful performance, or the lack of it, is investigated using...


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pp. 297-307

E-ISBN-13: 9789814379540
Print-ISBN-13: 9789814379632

Page Count: 307
Publication Year: 2012

Edition: 1

Research Areas


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Subject Headings

  • Global Financial Crisis, 2008-2009.
  • Indonesia -- Economic conditions -- 1945-1966.
  • Indonesia -- Economic conditions -- 1966-1997.
  • Indonesia -- Economic conditions -- 1997-.
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