Survey of recent developments in Indonesia

Crawford School of Public Policy | Arndt-Corden Department of Economics | Indonesia Project

Event details

Indonesia Study Group

Date & time

Tuesday 05 February 2013


Seminar Room B, Coombs Building, Fellows Road, ANU


Katy Cornwell (Monash University) and Titik Anas (Centre for Strategic and International Studies)


Indonesia Project
+61 2 6125 5954
The third quarter of 2012 witnessed a slowdown in growth to 6.2 per cent (year-on-year), compared with 6.5 percent in 2011. It is unlikely that Indonesia will achieve the 6.5 percent growth target of 2012. If oil and gas were excluded, the growth rate would be about 6.9 per cent. This slowing of growth is not a specifically Indonesian story, and, in fact, Indonesia’s growth remains strong compared with most countries in the region.

Alongside sustained strong economic growth, the overall incidence of poverty in Indonesia has declined substantially over the last decade. However, the benefits of this growth have not been shared equally among the entire population, and there are signs of increased inequality. While this could be seen as part and parcel of economic progress, high inequality in an economy can impede poverty reduction efforts, increase civil unrest, destabilise the political situation and restrict the domestic market. We examine national and provincial Gini coefficients over the last decade, in an attempt to identify the sources of this rising inequality.

In the countdown to the new year, workers staged rallies demanding increases in minimum wages and an end to outsourcing. The newly elected Governor of Jakarta, Joko Widodo, was among the first to agree to a raise of 44%; other administrative heads followed, agreeing to increases up to 70%. With minimum wages across the country determined at the provincial level of government, and sometimes at the district and municipal levels, the increases are not consistent across all regions in Indonesia.

Other special focus areas of the Survey include the Jakarta floods, the APEC agenda, HIV/AIDS and decisions made by the constitutional court.

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