Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
The Indonesian economy has recorded strong growth over the past few decades, and in recent
years the firm pace of economic expansion has been accompanied by reduced output volatility
and relatively stable inflation. Indonesias economic performance has been shaped by government
policy, the countrys endowment of natural resources and its young and growing labour force.
Alongside the industrialisation of its economy, Indonesias trade openness has increased over
the past half century. As a near neighbour, Australia has long had significant trade ties with
Indonesia.
B U L L E TIN | D E C E M B E R Q UA R T E R 2011 33
Graph 2 Graph 3
Indonesia Share of World GDP* Population
At PPP exchange rates Average annual growth, 20002009
% % % %
Australia
India
Japan
Indonesia
United States
China
Western Europe
34 R ES ERV E B A N K O F AUS T RA L I A
boost to GDP growth that should continue for much through the 2000s, with some of the fluctuations
of the next two decades.3 in inflation reflecting government policy initiatives
The educational attainment of Indonesias population such as the changes in fiscal subsidies in 2005 and
has also risen markedly over recent decades. The 2008 which caused large temporary spikes in CPI
proportion of primary school-aged children enrolled growth.
at school was close to 100per cent in 2010, up from
70per cent in 1975, while more than two-thirds of Structure of Production
secondary school-aged children were enrolled in Like many countries in east Asia, Indonesia has
school (up from less than 20per cent 35 years ago). undergone a process of industrialisation and
Indonesia is likely to see strong productivity gains urbanisation over the past 50 years. From 1967 to
from further investment in its human capital, as it 2009, the manufacturing share of GDP increased by
will allow more workers to be employed in industries 19 percentage points while the agricultural share
with relatively high value added (Arze del Granado fell by 35percentage points (Graph 5 and Table 2).
et al 2007). Similarly, the share of the population living in urban
Indonesias recent strong economic growth has also areas (the urbanisation rate) increased from 17 per
been accompanied by relatively steady inflation. This cent to 53per cent over this period (Graph 6). Overall,
followed a rapid increase in the price level during the pace of urbanisation and industrialisation has
the Asian crisis driven by the sharp depreciation of been comparable to that experienced elsewhere in
the rupiah (Graph 4). Since an inflation target was the region.
introduced in Indonesia in 2000, the GDP deflator Despite industrialising over the past half century,
and the CPI have grown at an average annual pace agriculture remains an important part of the
of 10per cent and 9per cent, respectively, similar Indonesian economy accounting for 16per cent of
to the pace recorded in the two decades prior to the output in 2009 (a relatively high share compared
Asian crisis, but well below the pace in the 1960s with other economies in east Asia; Graphs 5 and 7).
and 1970s. Inflation has also generally trended lower In addition, nearly half of Indonesias population
continue to live in rural areas and, in 2008, agricultural
Graph 4
industries accounted for more than 40 per cent of
Indonesia Consumer Price Inflation
Year-ended
% % Graph 5
Manufacturing and Agricultural Output
Share of nominal GDP
75 75 % Manufacturing Agriculture %
50 50 40 40
ASEAN* China
25 25 30 30
0 0 20 20
Indonesia
-25 -25 10 10
1976 1983 1990 1997 2004 2011
South Korea
Source: Thomson Reuters
0 0
1989 2009 1989 2009
* Including Malaysia, Philippines and Thailand
3 As explored in Hall and Stone (2010), this boost is expected to fade Source: United Nations
gradually with demographic factors starting to drag on growth in the
late 2020s.
B U L L E TIN | D E C E M B E R Q UA R T E R 2011 35
36 R ES ERV E B A N K O F AUS T RA L I A
20 20
International Trade
Indonesia has become increasingly globally
integrated over the past half century, with its ratio
of trade to GDP rising from 30 per cent in 1970 to
10 10
60 per cent in the 2000s. The value of Indonesias
exports rose rapidly in the early 1970s in line with
the first oil price shock. With the world price of oil
0 0 remaining elevated, oil exports continued to be
Food &
Textiles &
Tobacco
clothing
printing
Transport &
machinery
Information &
communicatio
n technology
B U L L E TIN | D E C E M B E R Q UA R T E R 2011 37
Graph 10 Graph 11
Indonesia Exports of Goods and Services Indonesia Exports by Destination
Share of total* Share of merchandise export values, smoothed
% % % %
Mining 40 40
75 75
Japan
30 30
Manufactures
50 50 HIAEs**
Agriculture 20 20
Rest of the world
EU
25 25
ASEAN*
10 10
US China
Services Rest of Asia
0 0 0 0
1969 1977 1985 1993 2001 2009 1995 2003 2011 1995 2003 2011
* Merchandise exports only prior to 1981 * ASEAN includes Malaysia, Philippines and Thailand
Source: World Bank ** Higher-income Asian economies include Hong Kong, South Korea,
Singapore and Taiwan
Sources: CEIC; RBA
exports of coal and gas have been rising strongly.
After growing at a firm pace through the 1990s, Over the years ahead, these trade ties are likely to
exports of travel services (which comprised more strengthen further as policies negotiated under
than 90 per cent of service exports until the early the ASEAN-Australia-New Zealand Free Trade
2000s) have been subdued whereas exports of Agreement come into force. In 2012 Australia will be
computer, communications & other services began exempt from 78per cent of Indonesian tariffs, with
to rise rapidly, to account for nearly 40 per cent of all this rising to 92 per cent in 2015 (from 11 per cent
services exports in 2009. currently; DFAT (2011)).
Shifts in the composition of Indonesias trade have Petroleum accounts for almost half of all Australian
been accompanied by changes in trade destinations. imports from Indonesia; other major imports
As is the case in other east Asian countries, growth in include gold, telecommunications equipment and
Indonesias exports to economies within the region rural goods (Table 3). Cereals are Australias largest
and to developing economies outside of the region export to Indonesia by value, after having surged by
has outpaced the rise in exports to major advanced almost 100per cent per year over the past four years
economies (Craig, Elias and Noone 2011; Graph 11). (consistent with the large expansion in Indonesian
Still, over a third of exports are sent directly to major livestock production). Non-ferrous metals and
advanced economies, and a significant proportion petroleum are other significant Australian exports to
of goods exported to economies within the region Indonesia.
are intermediate goods that are processed further Australia and Indonesia also have close links through
and, ultimately, used to meet final demand in major travel and tourism. More than one in ten tourists
advanced economies.6 to Indonesia in 2010 were of Australian nationality,
As a near neighbour, Indonesia has longstanding the third largest share after those of Malaysian and
trade ties with Australia and is now Australias Singaporean nationality. Per person, Australians
12th largest trading partner; in 2010, 2 per cent of spent 40 per cent more per visit than the average
Australias exports were sent to Indonesia (by value) of all visitors to Indonesia. In the other direction,
and 2.7 per cent of imports came from Indonesia. Indonesians accounted for around 2per cent of all
short-term visitors to Australia in mid 2011.
6 Component trade is a significant portion of Indonesias exports to east
Asian economies even though Indonesia is not as heavily integrated
into regional supply chains as most other economies in the region.
38 R ES ERV E B A N K O F AUS T RA L I A
In 2010 Indonesia had a modest trade surplus with Private consumption expenditure
Australia (of 0.3 per cent of Indonesian GDP or
Household consumption expanded at a strong
around 10per cent of total trade between the two
and stable pace over the past decade, averaging
countries) and a large aggregate trade surplus (of
growth of around 5 per cent per year over the
3 per cent of Indonesian GDP). Indonesia has had
2000s. This was faster than the 4per cent average
an aggregate trade surplus since 1988 and, with
growth reported in the rest of east Asia (excluding
the sharp widening of its surplus on goods trade
the economies of China, Japan and Taiwan), partly
during the Asian crisis, has recorded current account
reflecting Indonesias strong population growth.
surpluses in almost every year since 1998.
Per capita consumption grew at around 3per cent
per year since 2000, a touch lower than Indonesias
Domestic Demand pre-crisis rate of 4per cent.
In recent years, Indonesia has seen consistently Strong consumption growth also reflects rising
strong domestic demand growth despite the incomes, with Indonesians moving out of poverty
large shocks to external demand associated with and into the middle class. The share of the
the global economic downturn. As global output population living on less than US$2 per day fell from
contracted by more than 3per cent over the three 91per cent in 1987 to 51per cent in 2009 (Graph 12).
quarters to the March quarter 2009, Indonesian As this process occurred, consumption of non-food
export volumes fell by 20per cent but domestic final items expanded at a relatively fast pace, growing on
demand rose by 5per cent with the pace of growth average by around 6per cent in the 2000s, more than
only slowing moderately. This resilience of domestic double the average growth in food consumption.
demand to external influences sets Indonesia apart This resulted in household spending on non-food
from its ASEAN peers; over the past 10 years the items rising to be half of total private consumption
correlation between domestic final demand and expenditure by 2009. Based on the experience
exports was considerably lower in Indonesia than of other countries, further increases in non-food
in Malaysia, Thailand and the Philippines. Domestic consumption (relative to total consumption) are
demand is likely to continue to expand strongly over likely to occur in Indonesia as incomes rise (Graph 13).
coming years, supported by an expanding middle
class and ambitious government plans to improve
infrastructure.
B U L L E TIN | D E C E M B E R Q UA R T E R 2011 39
20 20
Graph 14
0 10 000 20 000 30 000 40 000 50 000 60 000 Indonesia Investment
GDP per capita Share of nominal GDP
(US$ at PPP exchange rates, 2009) % %
* Latest available observation
Sources: Food and Agriculture Organization of the United Nations; Penn World
Table Version 7.0
30 30
Investment
20 20
Strong investment growth is also expected to
underpin domestic demand over the next decade,
just as it did from the 1960s through to the Asian 10 10
crisis. Infrastructure investment is expected to be
particularly robust, with government plans already in
0 0
place to substantially improve the current poor state 1960 1970 1980 1990 2000 2010
of infrastructure in the country through traditional Source: World Bank
40 R ES ERV E B A N K O F AUS T RA L I A
B U L L E TIN | D E C E M B E R Q UA R T E R 2011 41
42 R es erv e ba nk of Aus t ra l i a
T H E G ROWTH AN D DE VE L O P ME N T O F TH E IN DO N E SIAN E C O N O MY
Goeltom MS (2007), Economic and Fiscal Reforms: World Bank (2011), Current Challenges, Future Potential,
The Experience of Indonesia, 19801996, Essays in Indonesia Economic Quarterly, June. Available at <http://
Macroeconomic Policy: The Indonesian Experience, PT siteresources.worldbank.org/INTINDONESIA/Resources/
Gramedia Pustaka, Jakarta, pp 489506. Publication/280016-1309148084759/IEQ-Jun2011-ENG-
25June2011.pdf>.
Hall J and A Stone (2010), Demography and Growth, RBA
Bulletin, June, pp 1523. World Economic Forum (2011), The Global
Competitiveness Report 20112012. Available at
Heston A, R Summers and B Aten (2006), Penn World
<http://www3.weforum.org/docs/WEF_GCR_Report_
Table Version 7.0, Center for International Comparisons
2011-12.pdf>.
of Production, Income and Prices at the University of
Pennsylvania, May 2011.
B U L L E TIN | D E C E M B E R Q UA R T E R 2011 43