Seminar on Economic Development in Indonesia

Introduction

• Moderator: Neil Alger, researcher at the Smell Institute.
• Speaker: Professor Pal Hill, a professor at the Australian National University.
• Audience Interaction: Use of a platform called Sli.do for questions and comments during the presentation.
• Emergency Procedures: In case of evacuation, follow directions from emergency personnel and do not use lifts.

Presentation Overview

• Title: "Half a Century of Indonesian Economic Development Trends"
• Focus Areas:
  • Economic growth (1960-2010)
  • Investment rates
  • Government spending
  • Consumption
  • Living standards, poverty, and inequality
  • Policies, institutions, and major events influencing growth.

Key Points from Professor Hill’s Presentation

Historical Context

• Indonesia's economic development has been influenced by historical conditions.
• Initial conditions in 1960 were unfavorable compared to neighboring countries.
• Legacy of Dutch colonialism has impacted economic policies and development.

Growth Observations

• Indonesia is classified among countries that achieved rapid growth according to the World Bank.
• Growth has been characterized by the interplay of savings and investment phases.
• The transition from current account deficits to surpluses after the Suharto era.

Structural Changes in the Economy

• Shift from tradable sectors (manufacturing) to non-tradable sectors (services).
• Challenges in catching up with regional development due to policy shifts favoring non-tradables.

Crisis Management

• Indonesia has faced several economic crises (e.g., 1997-1998 Asian Financial Crisis).
• Effective management of crises has influenced long-term growth outcomes.

Regional Disparities and Inequality

• Regional inequality has remained stable, contrary to expectations of increasing disparity.
• Discussion on the effectiveness of decentralized governance and its impact on regional development.

Education, Labor, and Health

• Significant improvements in education and health indicators over time.
• Challenges in labor market matching and quality of education.

Institutional and Governance Factors

• Institutions and governance play crucial roles in economic development.
• The relationship between democracy and economic growth is complex and requires further exploration.

Future Perspectives

• Importance of digital economy and technology in shaping the future of Indonesian economic development.
• Need for robust policies to support manufacturing and enhance productivity.

Questions Raised by Participants

1. On Economic Growth: Can Indonesia return to a growth rate of 7% or higher through infrastructure investments?
2. On Inequality: What are the historical drivers behind the increase in inequality since 1990?
3. On Labor Mobility: How does labor mobility across regions affect economic growth in Indonesia?
4. On Industrial Policy: Is it possible to replicate successful industrial policies from Japan, Korea, and Taiwan in Indonesia today?

Conclusion

• The seminar provided a comprehensive overview of Indonesian economic development, challenges faced, and strategies for future growth.
• Participants were encouraged to continue discussions and utilize the Sli.do platform for further questions.