Lessons of East Asia: Indonesia. Development Transformation and Public Policy

摘要

From a position as one of the world's poorest nations, Indonesia has recorded rapid and sustained growth over the past 25 years. During 1965-90, GDP increased at an average rate of nearly 7 percent per year. Following the accession of President Soeharto in 1967, there have been three broad phases in the government's approach to development. Estimates of productivity change and capital efficiency provide some indication of the impact that government policy has had on economic development. During 1967-73, rapid growth was associated with productivity improvements and a low incremental capital-output ratio, suggesting that policy was well-designed. In the 1980s, attempts to promote investment behind protective barriers led to declines in total factor productivity (TFP) and capital efficiency. Following the reforms of 1985-88, when policy concentrated on promoting labor-intensive activities, there has been a turnaround in productivity and efficiency indicators. TFP growth in 1988-91 was matched only by its performance during 1967-73. (Copyright (c) 1993 The International Bank for Reconstruction and Development/The World Bank.)