2.

Since Suharto was removed, Indonesia has grown its economy at a slower pace than two
other large developing nations, India and China. Why do you think this has been the
case?
I think that Indonesia's economy grew at a slower pace because the liberty of the citizens and
the press were oppressed. This was also the case in China but they were more open to foreign
investments and were able to built a functioning infrastructure. Also the economic liberalism
was not given in Indonesia and the protectionist policies hindered the foreign investors to make
business in Indonesia. The Indonesian government believed that the foreign companies and
investors would take the resources from the country and leave the country impoverished.
Because of the protectionist policies, the market was not liberalised which led to a decline in
innovation and entrepeneurship.
When being liberalised from the leadership of Suharto, important sectors like the agriculture
and infrastructure like transportation and telecommunication in the hand of inefficient state-
owned companies. The missing privatization was one of the biggest mistakes the Indonesian
government could make after the resign of Suharto. Also, the property rights of the citizens
were not as protected as in other countries. To strengthen the economy, the property rights
need to be protected.

m
Resulting from the corruption in Indonesia, the economic growth is also at a slower pace than

er as
in Inida or China. They taxes and profits that get lost with black market activities and corruption

co
have a big impact on the growth rates.

eH w
Another important aspect to note is, that high logistic costs make it even harder to develop
economic activities as well as the missing participation in globalization. They could get an

o.
rs e
advantage by using the technologies that are already developed.
ou urc
o
aC s
v i y re
ed d
ar stu
sh is
Th

This study source was downloaded by 100000806574620 from CourseHero.com on 08-16-2021 23:36:46 GMT -05:00

https://www.coursehero.com/file/47823928/Closing-Case-Indonesia-2docx/
Powered by TCPDF (www.tcpdf.org)