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    Can Indonesia Secure a Development Dividend from Its Resource Export Boom?

    Shrestha, Rashesh; Coxhead, Ian | June 2018
    Abstract
    Indonesia has enjoyed a long spell of sustained and relatively rapid economic expansion, largely on the back of strong commodity prices. No commodity boom lasts forever, however, and threats to the continuation of this growth are mounting. Indonesia now faces the challenge of locking in gains and setting a course to sustain future development in less favourable times. Post-2000 growth differs from earlier experiences in that exports of agricultural products, especially palm oil, now play a leading role. In contrast to the country’s earlier oil and gas export boom, the gains from agricultural export growth accrue mainly to private actors that include corporations, smallholders, and the agricultural labour force, with a much smaller share passing through to government budgets. Government can no longer simply mandate the use of funds for development purposes; many other actors and institutions are involved. It is reasonable to assume that the benefits from such a decentralised export boom would be widely diffused, with relatively large effects on rural and farm households and lower-skilled workers. However, this boom has been accompanied by a sharp rise in inequality and virtually no real wage growth. Moreover, while spending rose robustly during the boom, it is not clear whether poor, farm-based households have chosen (or been able) to use the gains to smooth consumption or to invest for future generations. The capacity to lock in gains at micro and macro levels is subject to significant policy influence. The maxim that ‘while the sun is shining is the best time to repair the roof’ applies: currently healthy global economic conditions present an opportune moment for Indonesian policymakers to reflect and to look ahead, with an eye towards achieving optimal development policy settings.
    Citation
    Shrestha, Rashesh; Coxhead, Ian. 2018. Can Indonesia Secure a Development Dividend from Its Resource Export Boom?. © Economic Research Institute for ASEAN and East Asia. http://hdl.handle.net/11540/8507.
    Keywords
    Development Economics
    Regional Economic Development
    Economic Impact
    Asian Development Bank
    Development
    Economic Boom
    Regional Economic Integration
    Good Governance
    Governance Approach
    Macroeconomic
    Macroeconomic Analysis
    Macroeconomic Framework
    Macroeconomic Models
    Macroeconomic Performance
    Macroeconomic Planning
    Macroeconomic Policies
    Macroeconomic Reform
    Macroeconomic Stabilization
    Economic planning
    Economic structure
    Growth policy
    Trade relations
    Trade policy
    Trade policy
    Economic development
    Economies in transition
    International economy
    Border integration
    Economic integration
    Gross domestic product
    Trade policy
    Institutional Framework
    Public Administration
    Business Ethics
    Regional economics
    Economic forecasting
    Economic development projects
    Success in business
    Business
    Free trade
    Business
    Economics
    Communication in economic development
    Restraint of trade
    International economic integration
    Trade blocs
    East-West trade
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    Citable URI
    http://hdl.handle.net/11540/8507
    Metadata
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    ERIA_DP_2018_04.pdf (649.5Kb)
    Author
    Shrestha, Rashesh
    Coxhead, Ian
    Theme
    Economics
    Governance
    Labor Migration
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise