1 . The Old Order government ( 1950-1966 )
Political conditions :
• Indonesia is facing two major wars with the Dutch
• political turmoil in the country and some of rebellion
• poor macroeconomic management
Unfavorable economic conditions :
• During the 1950s , economic growth averaging 7 %
• The period 1960 - 1966 , 1.9 % economic growth and stagflation ( high rate of unemployment and inflation)
• The period 1955 - 1965 , an average of government revenue and expenditure of Rp 151 million to Rp 359 million
• Production of agricultural and industrial sectors are very low as a result of a lack of production capacity and supporting infrastructure
• Excessive amount of money in circulation , resulting in inflation
Dumairy (1996 ) describe the economic condition in Indonesia :
a) The period from 1945 to 1950 .
b ) The period of parliamentary democracy / liberal (1950 - 1959)
• Many political parties
• The formal sector : mining , agriculture , distribution , banking, and transportation are dominated by capital-intensive and export-oriented foreign and provide a greater contribution to GDP .
At this time a change occurs 8 times cabinet :
• Hatta cabinet 's policy of monetary reform via devaluation of the local currency ( Gulden ) and cut the money by 50 % over the circulation of paper money issued by the De Javasche Bank with a nominal value of > 2.50 Gulden Indonesia .
• Natsir Cabinet with economic development planning policy formulation called for Economic Urgency Plan ( RUP )
• Cabinet Sukiman with nationalization policies by De Javasche Bank to Bank Indonesia and the elimination of multiple exchange rate system
• Cabinet Wilopo with a balanced budget policy in the state budget , tighten imports , rationalization and modernization of the armed forces with a reduction in the number of personnel , as well as government spending pengiritan
• Cabinet with Ali I import restriction policy and tight monetary policy
• Burhanuddin cabinet with import liberalization policy , tight monetary policy to reduce the amount of money in circulation , and program refinement fort ( RUP program that is part of a program to reduce racial discrimination economic dominance ) , allowing foreign investment into Indonesia , assist indigenous entrepreneurs , as well as removing approval of the round table ( eliminating the dutch domination of the national economy .
• Cabinet Ali II with five-year development plan policy 1956 - 1960
• Cabinet Juanda with political stability and policy nationalization of Dutch companies .
c ) Guided Democracy Period (1959 - 1965)
• Do nationalization of Dutch companies .
• More inclined to the idea of socialist communist
• Political instability until the peak in September 1965
2 . Governance New Order (1966 - May 1998 )
The government directed at improving the welfare of society through economic and social development . The government left the communist ideology and establish relationships with Western countries and become a member of the UN , the IMF , and the World Bank .
Indonesia's economy :
• insolvency LN U.S. $ 32 Billion
• Acceptance export only half of the spending on imports
• Control spending and taxation helpless
• Inflation 30-50 percent per month
• Condition of the economic infrastructure bururk
• The productive capacity of the industrial sector and exports declined
Economic policy priorities :
• Fight hyperinflation
• replenish food supplies ( rice )
• rehabilitate the economic infrastructures
• Increased exports
• Provision of employment
• Inviting foreign investors
Economic program of the new order include :
( a) Short Term
• July-December 1966 for a restoration program
• January-June 1967 for rehabilitation
• July-December 1967 for the consolidation phase
• January-June 1968 to phase stabilization
( b ) Long-term in the form of Five Year Development Plan ( Repelita ) from April 1969.
In order to support the short -term policy , the government :
( a) Introduce a policy of balanced budgets (balanced budget policy)
( b ) Establishment IGGI
( c) reform of the banking system
- Banking Act of 1967
- 1968 Law on the Central Bank
- Act of 1968 on Foreign Banks
( d ) Being a member of the IMF back
( e ) Provision of a greater role for banks and other financial institutions as ' " agents of development " . By mobilizing private savings to support economic growth and plays an important role for the development of the money market and capital market .
Starting 1 April 1969 , the long -term development programs consist of stages Repelita targeting :
• economic stability
• economic growth
• equitable distribution of the fruits of development
I Repelita >> 1969 - 1974 with the goal :
• economic stability
• economic growth
• equitable distribution of the fruits of development
Repelita II >> 1974 - 1979 with the objectives :
• economic growth
• equitable distribution of the fruits of development
• economic stability
Repelita III >> 1979 - 1984
Repelita IV >> 1984 - 1989
Repelita V >> 1989 - 1994
Repelita VI >> 1994 - 1999 with the objectives :
• equitable distribution of the fruits of development
• Economic growth and
• economic stability
3 . Transitional Government ( Habibie ) ( May 1998 - November 1999 )
On 14 and 15 May 1997 , the exchange rate against the U.S. $ bath decreased ( depreciation ) as a result of the selling decisions of investors who no longer trust the economic outlook for Thailand in the short term . The Thai government intervened and supported by the central bank singapore , but not able to stabilize the exchange rate of Bath , so the central bank announced a rate bath left Thailand on market mechanisms . On July 2, 1997 , a decrease of bath exchange rate against the U.S. $ between 15 % - 20 % . In July 1997 , the crisis hit Indonesia ( exchange rate of Rp 2,500 - Rp 2,650 , - ) . BI intervene , but was unable to weaken the exchange rate in March 1998 to Rp 10,550 and even exceeded USD $ 11.000/US .
Concrete steps to tackle the crisis :
• Delay Rp 39 trillion project to compensate for the limitations of the State budget
• Central bank foreign exchange market intervention to
• Enlist the help of the IMF to obtain financial aid package of U.S. $ 23 billion in November 1997
• Revoke business licenses 16 private banks unhealthy
4 . Governance Reform ( Abdurrahman Wahid ) (2000-2001 )
Starting mid-1999 .
target :
• Restoring the national economy in accordance with community expectations and investors
• Finalising the problem of corruption
• Enforcing the rule of law
• Enforcement of rights
• Reduction of the role of armed forces in politics
• Strengthening the Homeland ( Settlement disintegration )
conditions :
• In 1999 positive economic growth ( close to 0 )
• In 2000 the economic growth of 5 %
• stable monetary conditions ( inflation and low interest rates )
• In 2001 , businesses and the public is less trust in the government as a result of the controversial presidential statement , corruption , dictatorship , and feud with the House
• In March 2000, the foreign exchange reserves declined from U.S. $ 29 billion to U.S. $ 28.875 billion
• Relations with the IMF become better as a result of : delay implementation of the amendments to the Law. 23 of 1999 concerning Bank Indonesia ; implementation of regional autonomy ( especially freedom for local government debt of LN ) ; and revision of the 2001 budget .
• In 2001 , economic growth tends to be negative , stock index plunged more than 300 points , and the exchange rate fell from Rp 7,000 to Rp 10,000 per U.S. $ .
5 . Governing Mutual Aid ( Megawati S ) == (2001-2004 )
Starting mid-2001 with the condition :
• SBI 17 %
• Interest on deposits 18 %
• Inflation period of July - July 2001 13.5 % assuming inflation of 9.4 % after a revised state budget
• GDP growth in 2002 was 3.66 % below the target of 4 % as a result of the lack of development of private investment ( domestic and foreign ) , political instability , and there is no legal certainty .
6 . Governments of Indonesia United Volume I ( age SBY -JK ) (2004-2009)
In this period , the government implemented several new programs that are intended to help the economy of small communities including direct cash assistance ( BLT ) , PNPM Mandiri and medical treatment. In practice , these programs run in accordance with the targeted though there are still many shortcomings here and there.
7 . Governments of Indonesia United Volume II ( era SBY - Boediono ) ( 2009-2014)
In this period , the government, especially through Bank Indonesia established four policies to boost national economic growth , namely :
• BI rate
• exchange rate
• monetary operations
• macroprudential policies for the management of liquidity and macroprudential capital flows .
