Contents

1. Economic Growth and Sustainable Development in Indonesia: An Assessment.................................2

1.1. Introduction.................................................................................................................................2
1.2. Summary of the article.................................................................................................................2
1.2.1. Purpose of the article/ Problem statement............................................................................3
1.2.2. Specific objectives it tries to achieve...................................................................................3
1.2.3. Data used (including its type-Quantitative or qualitative)....................................................3
1.2.4. Method of data analysis.......................................................................................................3
1.2.5. Findings, Conclusions, and policy recommendations..........................................................3
1.3. Article synthesis..........................................................................................................................5
1.4. The Critical Strengths of the Paper..............................................................................................5
1.5. The Critical weakness of the Paper..............................................................................................5
Economic Growth and Sustainable Development in Indonesia: An Assessment Robi Kurniawan &
Shunsuke Managi To cite this article: Robi Kurniawan & Shunsuke Managi (2018) Economic Growth
and Sustainable Development in Indonesia: An Assessment, Bulletin of Indonesian Economic Studies,
54:3, 339-361, DOI: 10.1080/00074918.2018.1450962 To link to this article:
https://doi.org/10.1080/00074918.2018.1450962 Accepted author version posted online: 15 Mar 2018.
Published online: 11 Dec 201.
1. Economic Growth and Sustainable Development in Indonesia: An
Assessment
1.1. Introduction
The article to be reviewed is titled “Economic Growth and Sustainable Development in Indonesia: An
Assessment: A Review of Current Research” written by Robi Kurniawan & Shunsuke Managi and
published by journal of Bulletin of Indonesian Economic Studies. The study utilized the method of a
research review meaning in sustainability terms, developed by unobserved flow-based data, GDP
measures are not sufficiently accurate in reflecting social well-being. The data used to compute the stock
and shadow prices of human, produced, and natural capital (calculated for the same period), Using this
data, authors measure the productive base used to produce the goods and services that determine the
current well-being of Indonesians. They also study the goods and services that are not calculated in GDP
but contribute significantly to well-being. The research used an empirical research approach with a main
purpose to examine the topic of organizational innovation to help understand how organizations can
successfully foster and develop innovation. The research stated three main objectives: first to Studies
have investigated international sustainability trajectories; second to determine the need for country-
specific sustainability trajectories using an inclusive wealth framework; and third to evaluating
Indonesia’s natural capital account, which consists of forest resources, agricultural land, fossil fuels, and
minerals. The nature of the article is a content study and tries to clarify its content by content.
1.2. Summary of the article
In this paper, Authors apply the inclusive wealth theory of Arrow et al. (2012), which assesses the
productive base wealth types that contribute to well-being, including produced capital, human capital, and
natural capital. The article explores the nexus between sustainability and economic growth in Indonesia
between 1990 and 2014, using an inclusive wealth framework that covers the country’s unique resources
and biodiversity. Indonesia’s inclusive wealth growth is considered positive. The study implies that the
GDP per capita growth in Indonesia does not necessarily indicate sustainability. The depreciation of both
renewable and non-renewable natural capital is driving the decline in wealth per capita.
1.2.1. Purpose of the article/ Problem statement
The article main purpose is Assessment to determine whether resource-rich countries fail to transform
their natural resource rent into savings. They find that nations with lower GDP growth have low or
negative adjusted net saving rates. A country that is rich in natural resources relative to population and
capital tends to grow more slowly and to experience larger and more damaging fluctuations in economic
growth. While investigating economic and environmental degradation, find a large gap between
Indonesia’s current economic progress and the point at which it could have followed a sustainable
development path.
1.2.2. Specific objectives it tries to achieve
First to Studies have investigated international sustainability trajectories;
Second to determine the need for country-specific sustainability trajectories using an inclusive wealth
framework; and
Third to evaluating Indonesia’s natural capital account, which consists of forest resources, agricultural
land, fossil fuels, and minerals
1.2.3. Data used (including its type-Quantitative or qualitative)
The Authors used Qualitative and quantitative data, the data used to compute the stock and shadow prices
of human, produced, and natural capital (calculated for the same period). Using this data, Authors
measure the productive base used to produce the goods and services that determine the current well-being
of Indonesians. Authors also study the goods and services that are not calculated in GDP but contribute
significantly to well-being.
1.2.4. Method of data analysis
The authors extend the analyses of Jarvis et al, study sheds light on capital investment or disinvestment
effects by using an inclusive wealth framework. They also explore each productive base and its
subcomponent trends from 1990 to 2014. By investigating this alongside economic growth, Authors can
determine whether Indonesia’s development is on a sustainable trajectory.
Authors analyses the changes in inclusive wealth and its components using yearly averages, based on the
changes in socioeconomic and policy inputs from 1990 to 2014.
1.2.5. Findings, Conclusions, and policy recommendations.
The Authors find the total shadow prices of the capital stock types to estimate inclusive wealth: The link
between well-being and the productive base requires that each subcomponent of capital stock K t - is
valued at its social price, or shadow price, which gives us its social value. They consider the shadow price
of each type of capital stock is constant over time. Authors have calculated the stock and shadow prices of
productive assets—consisting of human, produced, and natural capital— from 1990 to 2014. Indonesia is
still considered to have positive inclusive wealth growth:
In the research paper Authors furthermore, incorporate the effects of population growth as another
exogenous factor. By including the population in this study, they consider that a positive change in
inclusive wealth per capita indicates that a country is on a sustainable development path.
Authors provide an overview of the country’s economic growth and sustainability trajectories. Both
economic growth and inclusive wealth growth showed positive trends from 1990 to 2014.
In this study, Authors divide natural capital into two main categories: non-renewable resources (fossil
fuels and minerals) and renewable resources (agricultural land, forest resources, and fisheries). Authors
find that the share of renewable resources constitutes more than 60% of natural capital in Indonesia. The
empirical findings show that Indonesia experienced a decline in natural capital stock from 1990 to 2014.
They find that particular resources, such as forestry, have a relatively large share of natural capital (46%
in 2014). Tropical rainforests and peat lands have often been converted for palm oil production for
decades.
Authors find that the capital value of fisheries, compared with other natural capital categories, is still very
low (less than 1%). In this context, the fisheries account only evaluates the stock that has a catch record
for at least 20 years and that has a total catch in a given area of at least 1,000 tones.
Socioeconomic, Policy, and Inclusive Wealth Component Change: Authors analyses the changes in
inclusive wealth and its components using yearly averages, based on the changes in socioeconomic and
policy inputs from 1990 to 2014. The decline is related to the socioeconomics and policies in play during
the study period. After oil prices fell in the 1980s, Indonesia’s economic growth rate slowed. To address
the situation, the government introduced economic reforms, including economic deregulation.
Authors discuss their findings in the context of work on sustainability, from both a global and Indonesian
perspective.
In this paper, Authors concluded apply the inclusive wealth theory which assesses the productive base
wealth types that contribute to well-being, including produced capital, human capital, and natural capital.
They also consider Indonesia’ population growth, the main cause of declining wealth per capita, is the
depreciation of natural capital. Authors find that Indonesia experienced decreases in both renewable and
non-renewable natural capital over the study periods natural capital account, which consists of forest
resources, agricultural land, fossil fuels, and minerals.
The conclusion constructed in line with objectives of the research. This finding confirms that the
country’s development has followed a process of building wealth and shifting from natural capital to
produced and human capital. The population grew rapidly during the study period, outpacing total wealth
growth, so that per capita wealth growth was considered negative. This study implies that GDP per capita
growth in Indonesia during the period did not necessarily indicate growth in wealth per capita. With
negative inclusive wealth per capita growth, Indonesia was considered to be extracting natural capital
more than it was investing in infrastructure and human capital.
1.3. Article synthesis
Economic Growth for Sustainable Development means including key sustainable development issues.
Economic Growth for Sustainable Development consequently promotes competencies like critical
thinking, imagining future scenarios and making decisions in a collaborative way.
Policymakers and stakeholders are keenly interested in whether Indonesia’s economic performance in
GDP growth is accompanied by notions of sustainability. Sustainable development considers
intergenerational human well-being as important to maintain. Define sustainability as per capita human
well-being that doesn’t decline over time. argue that a multitude of economic capital assets inherited from
the past determine intergenerational well-being.
1.4. The Critical Strengths of the Paper
 The article was well structured, articulate and easy to understand.
 The articulated further studies that consider the Overall, these small and large scale
comparative studies are almost always conducted to evaluate programs for environmental
education
 The paper had provided the the study reported here is part of a larger investigation, in line
with the established practice of studying the implementation of Economic growth for SD
 The paper provided research question answered in line with effective manner
 The study discussed the theoretical perspectives of the Education and sustainable
development nexus.
 An important conclusion can be drawn from researcher results are that they show empirical
evidence for the effectiveness of Economic growth for SD.
1.5. The Critical weakness of the Paper
 This might suggest that attitudes are not affected by economic growth. More plausible,
however, is that the lack of effects is a methodological artifact rather than a genuine finding.
 The Objective of the research paper is not clearly identified.
 Difficult to identify the finding and theory supported and argued.
 Research question is not clearly identified.