Survey of recent developments

The survey period was dominated by the presidential election and its immediate aftermath. After receiving a clear mandate from the Sept. 20 second-round election, on Oct. 20 Susilo Bambang Yudhoyono was installed as Indonesia's sixth president, and the first to be elected directly. The presiden...

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Bibliographic Details
Published inBulletin of Indonesian economic studies Vol. 40; no. 3; pp. 277 - 305
Main Authors Aswicahyono, Haryo, Hill, Hal
Format Journal Article
LanguageEnglish
Published Canberra Carfax Publishing 01.12.2004
Taylor and Francis Journals
Taylor & Francis LLC
SeriesBulletin of Indonesian Economic Studies
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Summary:The survey period was dominated by the presidential election and its immediate aftermath. After receiving a clear mandate from the Sept. 20 second-round election, on Oct. 20 Susilo Bambang Yudhoyono was installed as Indonesia's sixth president, and the first to be elected directly. The president inherits an economy which, in terms of per capita income, has recovered to pre-crisis levels, and is growing at about 4.3% per annum. Developments during the survey period continued to confirm the assessments of previous surveys that macroeconomic stability has been restored, albeit precariously. Inflation is under control, though it is stubbornly above that of Indonesia's major trading partners. Interest rates have bottomed out and will probably start to rise, reflecting both international trends and the current very low real domestic rates. A major achievement of the Megawati administration was its prudent fiscal policy. The fiscal deficit has fallen to below 2% of GDP, and would be less than 1% under the proposed 2005 budget. However, the fuel subsidy has risen alarmingly. The subsidy is of such magnitude as to imperil the incoming administration's development-oriented expenditure program. The economy weathered the third major terrorist attack in two years, on Sept. 9 in front of the Australian embassy, with surprising ease. The longer-term ramifications may be more serious, however, especially if there are repeat attacks.
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ISSN:0007-4918
1472-7234
DOI:10.1080/0007491042000231494