Indonesia AlMaha & Shaikha

Introduction The Republic of Indonesia Population: 260,259,088 (4th most populous country) Islands: Approximately Unemployment (2016): 5.5 Exports: oil and gas, plywood, rubber and textiles Imports: machinery and equipment, chemicals, fuels, and foodstuffs

Economic Issues 1)Natural disasters ●Indonesia is prone to floods, earthquakes, volcanic eruptions and tsunamis. ●Huge sums of money is paid to repair the country’s destructions ●Limited capacity to rescue all civilians ●Eg forest fire cost the Indonesian economy 16 billion dollars (1.9% of the year’s forecasted GDP)

Economic Issues 2) Concerns about major exports Drop in prices of coal (commodity contributes to 10% of total exports) Fall in the demand of palm exports (commodity contributes to 8.85% of total exports)

Economic Issues 3) Current account deficit, and the tightening of the monetary policy Central bank is narrowing its monetary policy to shrink the current account deficit to 2.5% of the economy’s GDP Unchanged interest rates to maintain the level of inflation Consequence: slower economic growth Bank Indonesia’s governor Agus Martowardojo said: “Overall, we will keep our position for monetary policy. We will control inflation to reach our target of 3.5 to 5.5 percent [in 2014]. We are guiding the current account deficit healthier to 2.5 percent of GDP.”

Political Issues 1) Corruption (mainly in justice and civil service sectors): Corruption within the justice sector include the police and the courts. Seen by its ineffectiveness to enforce laws, failure to uphold justice, hence undermining the rule of law. No hard evidence, only surveys conducted within the sectors The courts make unfair decision and have high unofficial costs The Supreme Court ranked the lowest in integrity in comparison to the other public services in Indonesia in the 2008 Public Sector Integrity Survey In January 2012, it was reported that Indonesia has lost as much as Rp 2.13 trillion (US$238.6 million) to corruption in 2011

Economic and social costs of Corruption weakening of government institutions and the rule of law High crime rate due to smuggling and extortion involve the institutions that are supposed to be protecting citizens People that are most affected are the poor

Efforts to Curb Corruption President Jokowi: risen to power untainted by suspicions of corruption and he is the first president to carry out anti-corruption reforms Move government services online Claims this saved the country billions of dollars Moved to clean-up the oil and gas sector He replaced the entire board of Pertamina, a state-owned oil-and-gas firm Closed down Petral, an offshore trading arm of Pertamina that has long been suspected of being controlled by Indonesia’s “oil-and-gas mafia”

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