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Why can Indonesia spread the development better to the whole country, meanwhile Thailand is Bangkok… by Julius Galih

Answer by Julius Galih:

Thanks for mentioned Indonesia as difficult to be built, many thanks from me as Indonesian commoner. Republic of Indonesia actually is a composite of several nations consisting of different tribe with diverse custom, you may name Indonesia as United States of Indonesia ( USI), to be compared with the United States of America ( USA), for the difficulty level to unite such diverse of nations, who used to war each other, before Dutch came here, and “Traded” with us, for almost 350 years.

So, how Indonesian government distributes the development to the whole country? I have to move against the mainstream for this question, because the New Order was effective enough to hold into two powerful body of governance, the Bureaucracy of State Apparatus and the Army.

In the beginning of his reign as the president, Soeharto hold into two factions, the Economic Advisor mostly from Berkeley graduated expert, who became proxy from the Creditor ( Foreign Loan), and the Army as the guardian for any policy, but mostly for economic policy. Indonesia is the 25th largest export economy in the world and the 79th most complex economy according to the Economic Complexity Index (ECI).  [1]

There was a remarkable reduction in poverty along with economic growth as he introduced policies that enabled Indonesia to clock an average annual growth rate of 7% between 1965-1997, just before the Asian financial crisis struck. [2] The economic growth was financed mostly by foreign loan, when the Rupiah depreciated against the USD, it was a disaster for Indonesian that time. We were late to build a strong local industrial base for Indonesian economy which should supported the fundamental growth, which has economic added value than exporting raw materials.

So, New Order was successful enough to build the base infrastructure, primary education, basic healthcare infrastructure, and security for most areas of Indonesia. Believe it or not, Indonesia is a fragile nation which has potential horizontal conflicts everywhere, every moment. The existence of military base inside urban areas may seems weird for a democratic country with civilian government, but it was effective enough to maintain peaceful condition, relatively.

The side effect of concentrated capital into some capital holder and military factions stimulated the oligarch indeed, power tend to corrupt and absolute power corrupt absolutely. I’ve got the report from Julius Baer, the Swiss private banking about the volume of Indonesian Ultra High Net Worth Individual, 2015 here:  [3]

Indonesia learned from the crisis, and the government introduced many protective policies and measures that helped the economy better weather the 2008 financial crisis. The annual GDP of Indonesia has grown at an average rate of 5.3% since 2000, and the size of its GDP stands at $888.5 billion, according to the World Bank.  [4]

Below is the Gini Ratio of all province in Indonesia, according to National Statistic Bureau, you may compare the inequality potential of each area here:


[1] Indonesia (IDN) Exports, Imports, and Trade Partners

[2] Emerging Markets: Analyzing Indonesia’s GDP


[4] Emerging Markets: Analyzing Indonesia’s GDP

Why can Indonesia spread the development better to the whole country, meanwhile Thailand is Bangkok-centric?


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This entry was posted on October 22, 2016 by in Review.
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