Indonesia : Maintaining Stability, Deepening Reforms
Indonesia experienced another year of modest growth amidst a hesitant global recovery, and a deteriorating investment climate. Significant progress was made in democratization, macroeconomic stability and fiscal sustainability, but growth did not p...
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| Format: | Development Policy Review (DPR) |
| Language: | English en_US |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2003/01/2461475/indonesia-maintaining-stability-deepening-reforms http://hdl.handle.net/10986/14631 |
| Summary: | Indonesia experienced another year of
modest growth amidst a hesitant global recovery, and a
deteriorating investment climate. Significant progress was
made in democratization, macroeconomic stability and fiscal
sustainability, but growth did not pick up and progress in
poverty reduction stalled. Growth remained largely
consumption driven, as investors increasingly felt the pinch
of a cooling investment climate and a weak legal system. The
Bali bombing threatened to sink hopes for higher growth, but
that risk has been mitigated thanks to the remarkable
resolve the Government has shown in the aftermath of the
tragedy. The swift action on security, a fiscal stimulus,
and acceleration of structural reforms are likely to limit
the damage of the attack. That same resolve should now be
used to pursue the reforms that can accelerate growth,
create jobs, and further reduce poverty. The Government must
move now, before the elections distract politicians, or
tempt them into taking popular, but harmful measures such as
those recently taken in trade. The Government should stay
the course on macroeconomic policies, maintain fiscal
sustainability, revamp the investment climate and rebuild
the broken institutions in the legal system. |
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