Indonesia's macroeconomic and trade performance

Journal of Developing Areas

Volumn 30, Issue 2, 1996, Pages 149-166

  Rodgers, Yana Van Der Meulen ^a  

^a Dept of Economics and Thomas Jefferson Program in Public Policy at the College of William and Mary   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

DEBT; DEVELOPING COUNTRY; EXTERNAL DEBT; MACROECONOMIC PERFORMANCE; NATIONAL ECONOMY; TRADE PERFORMANCE;

INDONESIA;

EID: 0030461827     PISSN: 0022037X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (34)

1. For example, see Bela Balassa, "The Lessons of East Asian Development: An Overview," Economic Development and Cultural Change 36 (April 1988): 273-90;
2. and Chung H. Lee and Seiji Naya, "Trade in East Asian Development with Comparative Reference to Southeast Asian Experiences," Economic Development and Cultural Change 36 (April 1988): 123-52.
3. For example, Anne Booth, ed., The Oil Boom and After: Indonesian Economic Policy and Performance in the Soeharto Era (New York: Oxford University Press, 1992);
4. Wing Thye Woo, Bruce Glassburner, and Anwar Nasution, Macroeconomic Policies, Crises, and Long-Term Growth in Indonesia, 1965-90 (Washington, DC: World Bank, 1994);
5. and World Bank, The East Asian Miracle: Economic Growth and Public Policy (New York: Oxford University Press, 1993).
6. The world oil price index, base year 1985, jumped from 5.8 to 126.4 from 1970 through 1981, dropped from 126.7 to 100 from 1982 through 1985, and rose from 64.7 to 77.8 from 1986 through 1990.
7. For earlier performance figures, see Wing Thye Woo and Anwar Nasution, "Indonesian Economic Policies and Their Relation to External Debt Management," in Developing Country Debt and Economic Performance, vol. 3, ed. Jeffrey D. Sachs and Susan M. Collins (Chicago, IL: University of Chicago Press, 1989), pp. 17-149.
8. For Nigerian comparisons, see Jeffrey D. Lewis and Malcolm F. McPherson, "Macroeconomic Management: To Finance or Adjust?" in Asia and Africa: Legacies and Opportunities in Development, ed. David L. Lindauer and Michael Roemer (San Francisco, CA: ICS Press, 1994), pp. 99-150;
9. and Sara J. Scherr, "Agriculture in an Export Boom Economy: A Comparative Analysis of Policy and Performance in Indonesia, Mexico, and Nigeria," World Development 17 (April 1989): 543-60.
10. See Erik Thorbecke, "Adjustment, Growth, and Income Distribution in Indonesia," World Development 19 (November 1991): 1599.
11. In real terms, dollar nonoil exports grew more rapidly than rupiah GDP from 1982 to 1985; however, the average nonoil export/GDP ratio declines relative to the 1979-81 period. The nonoil export/GDP ratio, like the other trade and debt to GDP ratios, is calculated as nominal dollar exports, relative to nominal rupiah GDP converted into dollars. If rupiah and dollar deflators are included in the ratio calculations, then the real nonoil export/GDP ratio increases from 5.2 percent in the 1979-1981 period to 5.4 percent in the 1982-1985 period.
12. The government controlled prices of rice, cement, kerosene, tap water, gasoline, electricity, transport (city, air, and sea), and telephone service. These goods and services constitute approximately 23 percent of the consumer price index basket.
13. For employment figures, see Chris Manning, "Survey of Recent Developments," Bulletin of Indonesian Economic Studies 28 (April 1992): 29.
14. For Japanese foreign direct investment in Asia, see Ponciano S. Intal, Jr., "Real Exchange Rates, Price Competitiveness, and Structural Adjustment in Asian and Pacific Economies," Asian Development Review 10, no. 2 (1992): 86-123.
15. For foreign ownership figures, see part 2, p. 79, of Hal Hill's "Indonesia's Industrial Transformation," parts 1 and 2, Bulletin of Indonesian Economic Studies 26, nos. 2 and 3 (August and December 1990): no. 2: 79-120;
16. and Hal Hill's Bulletin of Indonesian Economic Studies no. 3: 75-109.
17. Using a different sample that includes African and more Asian countries, Lewis and McPherson, in "Lessons for Africa," also show that most countries experienced higher debt/GDP ratios in the late 1980s relative to the early 1970s.
18. See pp. 175-76 of Susan M. Collins and Won-Am Park's "External Debt and Macroeconomic Performance in South Korea," in Developing Country Debt and Economic Performance, ed. Sachs and Collins.
19. Often change in stock figures do not match the flow figures (disbursement minus amortization) because the World Bank uses end-of-period conversion factors for stocks and period-average conversion factors for flows. Discrepancies are particularly large with sharp changes in the exchange rates.
20. For alternative methods to estimate capital flight, see Myrvin L. Anthony and Andrew J. Hughes Hallett, "How Successfully Do We Measure Capital Flight? The Empirical Evidence from Five Developing Countries," Journal of Development Studies 28 (April 1992): 538-56;
21. John T. Cuddington, Capital Flight: Estimates, Issues, and Explanations, Princeton Studies in International Finance, no. 58 (Princeton, NJ: Princeton University, 1986);
22. and Rob Vos, "Private Foreign Asset Accumulation, Not Just Capital Flight: Evidence from the Philippines," Journal of Development Studies 28 (April 1992): 500-537.
23. On Indonesian capital flight, see David C. Cole and Betty F. Slade, "Reform of Financial Systems," in Reforming Economic Systems in Developing Countries, ed. Dwight H. Perkins and Michael Roemer (Cambridge, MA: Harvard University Press, 1991): 313-40.
24. I assume commercial bank short-term flows are included in the other short-term capital flows category.
25. See Cuddington, Capital Flight.
26. See Collins and Park, "External Debt and Macroeconomic Performance," pp. 176-77.
27. For the stylized facts, see Collins and Park, "External Debt and Macroeconomic Performance, p. 234.
28. For Indonesian nonoil export determinants by sector, see Yana V. Rodgers, "Empirical Investigation of One OPEC Country's Successful Non-Oil Export Performance," Development Discussion Paper no. 474 (Harvard Institute for International Development, Cambridge, MA, 1993).
29. Indonesia's annual real effective exchange rate index averages 251.7 for the 1986-90 period (1975 = 100), compared to 126.9 for Malaysia, 120.9 for the Philippines, 117.8 for Thailand, and 92.4 for Korea. Calculated from data in Intal, "Real Exchange Rates, Price Competitiveness, and Structural Adjustment," pp. 93-94.
30. For discussion of the log ban, see General Agreement on Tariffs and Trade (GATT), Trade Policy Review: Indonesia (Geneva: GATT, 1991);
31. and Holly Lindsay, "The Indonesian Log Export Ban: An Estimation of Forgone Export Earnings," Bulletin of Indonesian Economic Studies 25 (August 1989): 111-23.
32. On the International Coffee Agreement, see Takamasa Akiyama and Panayotis N. Verangis, "The Impact of the International Coffee Agreement on Producing Countries," World Bank Economic Review 4 (May 1990): 157-73.
33. See Woo and Nasution, "Indonesian Economic Policies."
34. See International Monetary Fund (IMF), International Financial Statistics (Washington, DC: IMF, 1992), pp. 138-39.