so he masala mollycoddle avocado good morning everyone welcome to this Murray State Institute I would like to thank you for your attendance in this today's seminar my name is Neil Alger I am researcher at smell Institute and it's my honor to moderate this discussion why we have professor pal Hill here and here's the professor in the Australian National University nu and I can see here some of his students yeah well actually I'm the alumni of nu as well but we went to different schools so unfortunately I never attend his lectures so I'm so sorry but you never have a chance to have me as your student yeah make sure the unfortunate is only but that's okay today is going to be paid off because all we are here is so lucky to leave them his lectures lightly so grabs this opportunity wisely and impulse as much as you can and to facilitate your participation we have arranged two different channels the first one is the traditional Q&A in AQ & a session right after the presentation and if you 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I'll ISPA later to in the okay so I'll get house like the works you can post your comment and be questions during the presentation and we're going to discuss some of your comments after the presentation and don't forget that you can also like your others the others comment or questions and oh no answered the other hashtag which is kill Sammy mob H I ll see me luck yes that's the true one so if you don't know how it works switch the event kill similar do you know how it works yeah given our nature one switch offenders them I can switch event you okay okay so let's move to the let's move to the main station I think into this min our professor he'll he'll more or less indicating about because he'll present one of his ultimate work entitled hospice in three of Indonesia economic development trends and conductors and questions and from this presentation we'll figure out the big picture the big picture of how the Indonesia economic develops from nineteen from 1960 to 2010 so and the big picture of the Indonesia economic development is in terms of the economic growth and each part of it it's like having an investment rate the government spending consumption and of course the economic cow like living standard poverty and inequality and something between the growth and the outcome which is like policies institutions and the major events yes of course it's absolutely a big work but no wonder how you if the professor emeritus of Southeast Asian economies in Australian National University yes in particular at the our current Department of Economics profit school college of Asia and the Pacific and his main research interest is the economic development of Southeast Asia in which he has been writing about 160 journal articles and book chapters that's a lot and on top of being the author or editor of 18 books he also serves on the editorial boards of 13 academic journals and he is also an occasional of IDI contributor to Australian and Asian newspaper in May given his extensive knowledge on Asian economics he has worked as a consultant for the Australian government the Indonesian government the World Bank the Asian Development Bank and several United Nations agencies so ladies and gentlemen without any further - so ensure your seatbelt is firmly seated let's welcome professor aha [Applause] you you you you oh sorry for summoning and about taking and we yeah so very nice to see you and so when your son as well and come on come on line so a lot of familiar faces good so I see Daniel some way then you'll hi Daniel and well and even something hi dan Ranson a friend of mine daddy could go down Australia - Gus you a dollar to pay a budget allocation cuts Nehru turnip and I can do a collie night right so this guy this guy is important and come on come on lion who else might I'm sure there are the people anyway everybody hello yeah it's it's a great pleasure to be here so if Potomac early I'm going to I'm going to embarrass I'm going to embarrass us and stop line then be chant and sneer so sorry sorry parent got a smear ooh and I love I love smear ooh yeah well upon smear ooh must see mercy I got a long big you do to us woody Shia the ammonia devoured Upolu town tetapi suitably contribute I see Sibugay so I said to them back up in EPM socio so subtly Interbike dunya it's me remember in Sakura Sakura burglars then telomere telomere Thank You accused and your populism down line line Indonesia Dan Cohen Cohen hmm sangd smear can it be a Sonia say eventually the power of ideas good ideas eventually win yeah para body's not always course serene Cali then tell them ranker e to smear room gives the basis for evidence-based policymaking which I guess promise we all you okay ten times present I see say so della monkey sorry Holly kana can be to come to chill today panic and ruin Celina king guru Ola contango and say yes sedan at the pro year at the pro year a DC bar Ubu Queenie a bikinis a hand satchel a suitable Hansard Yara to blue ski-doo cool tan lalu didn't think economy Indonesia then saya sit down guru Saheb begin this Ribeiro here PACU any well I put kimchi like and solace aw Sayaka and Chava then tell em rancor Ito present a see sorry hurry me saya mau kasi city cat gamba ran sort of big picture tintin tintin ranch honest aya DCC Kakui me so delhomme ranked a man saya hulu Santo em say Apple Ubuntu and Daddy Cohen Cohen then ELISA Bob you do say that hunka candles Mira wanted up at NASA at then bound to onion half a century of Indonesian economic development trends can get this question so focus near hurry any Siam mal focus knew and conjectures yeah then then questions the trends my man I got Nimbus uncanny the smoothed out I I want to focus mainly on conjectures and trim and questions daddy better trends because the trends we all know the trends and Mario is totally trendy so trend I can't we all know but the conjectures and the questions I'm not sure about so I really want to get your advice please okay so in I guess like no no no questions oh okay okay sure okay so w silicon killers t destitute you didn't say a silicon each era langsam okay so so young potomac how do you characterize indonesian math you say pack a jumper on the house a year has a kangaroo then but then bahasa garuda how to carry people have struggled with how to characterize indonesian economic development Salama leader in Lima Peru Tania so he needs English a Begich on Toronto's idea some of the observations on Indonesia Bali Decatur kabernyuk and LA or on bull a yeah maybe the bull a him he struggled more than the and argued inizio struggled so each other I said you Benjamin Higgins that famous quote here Indonesia a chronic economic dropout and Inga Bauer Ben Higgins ting Odyssey me llama yes Salameh Berber upper town paddle back to town semi Lambo us Lima Peru and Patrick Padilla panacea bethesda metro du Loup guna modal Asian drama a little prospect of rapid economic development tetapi Berber upper town laggy manner at World Bank Indonesia an economic miracle and booth and colleagues Isle a MIDI Anu a history of missed opportunities that was subtitle of the book showcased a ne-rection Mortimer he's sort of what we call the going on politically going and kiri yeah he sort of showcase state it's from Monash improbable nation / Sony and this catchy title here from one of your colleagues these are only Indonesia from showcased a plastic case so trying to capture this Indonesian story you can see people are struggling without it how to characterize Indonesian economic development yeah so but I think too general yeah before I begin the kind of presentation two things are we're two facts are really important so this is facts not fake news er facts first fact is any dirty world bank growth commission as I swing back a slide Heaney the World Bank tried to estimate how many countries have achieved rapid economic growth Salameh serratus town tirar here Tiffany see rapid growth at a Lalaji Burton war on GDP support 2 g % curtis Salama minimums Pulu town soak a simple america adelaide re serratus lima Pulu negara at elsa between your economy can hong kong taiwan the economy quran gary Sapolu % Joomla Joomla negeri - muscle club high growth in e - Thomas look Indonesia Indonesia salah satu negara in the the club esteem a were club esteem a were yielding and logic with whom Bernanke so that's first point I'm thinking you say Vicki a ten-ton context yeah that's the first point I want to emphasize 90 monk in say I can be charter tan tan tan tan tan masala tubby jangan lupa in a year that the high growth ray tech younger doer adalah well upon Indonesia paren gotta kawasan Asia timo young madhu Chipettes Akali alpha beta Anantara Asia Teemo Tara then Asia Timor Salatin yay to a shitty mood in Singapore by takara analytically muscle club Asia Timor guitarra kind of its newly industrializing economy so well upon Indonesia muscle but club young esteem a were it's it's at the lower end of the club Massey D Club normal sadly bit at the lower in so these two facts kind of tell me the sort of story the narrative I'm going to present to you today and to get your comments okay so this is the content so I won't this is Kira Kira this is the contents of my the book so sit yep topic Kira Kira sorry Bob so I haven't got time to talk about every every bit but this is just to give you the picture and I wanna mainly focus on knowledge gaps and areas contention conjecture so that's I'm looking for ideas from you please on suggestions how to think about some of the big issues where I'm not sure okay setting the scene so that's that's I think the more I think about economics the more I think history matters and so the history obviously is very relevant so these are just some quotes the impact of Dutch colonial them from that wonderful book Why nations fail lesson Mowgli Robinson actually the quote is based on the work of my a new colleague Anthony Reid historian sultans quote in 1966 also the work of pierre van during my a new colleague that indonesian per capita income in 1965 was similar or probably lower than a water was fifty years earlier so surplus sitting at a bad today herkimer do an economy so that's that's a kind of important historical fact also my my guru guru hines at his observation about indonesia in 1966 a country literally bankrupt the decade of ever-increasing economic mismanagement and as we know around the 1960s if you think of about 1960 as being kind of initial conditions of course initial conditions cebu Tanya Libby Libya jollibee dulu tubby just when when the database became better we could measure these indicators initial conditions showed Indonesia was even compared to its neighbors was really lagging so shantou such a shorter such a No how do I no I just want to use the lamp oh it doesn't matter but just want I said yeah Chandini so this is you know the will known the will now and Beverly years of schooling so this just tells just a reminder of how far in Asia was legging its neighbors in 1960 life expectancy of authority so Indonesia initial conditions were very unfavorable that's just the obvious point okay this is the first slide where I want your advice Pat Lally I want your advice please Mohan Mohan bantering so legacies of history so if you're trying to understand current Indonesian economic conditions what historical factors are relevant in in shaping the way Indonesian economy and Indonesian policymaking processes are developed so first one I think so this is what I'm trying to think about to try and as the context or if you'd like the analytical prism to look at Indonesian policy so first one is inflation aversion and that's of course because Bingham and daddy town and I'm poor landing and hyperinflation and so I guess that's a traumatic experience so that means for macroeconomics macroeconomic policy link inflation aversion is important second one is concern about preservation of territorial integrity so most countries don't really worry much about the national boundaries because it's in Australia we never really worry about you know will study and Barrett will its will it succeed or something it doesn't really matter but of course for Indonesia it doesn't matter because your international boundaries have changed and you know Papa muscle Republic settler Berber up a town after settler Kumud acre and so that's another point I think which is a kind of a condition in fact from history a third factor is I'm arguing my book in its contentious there's a general skepticism towards liberalism so this is what I say Bellagio daddy mentor say adieu Liu taking and we Amma home Qian we syllable and jangan lupa yeah this sort of skepticism about the liberal economic model is quite important and in some ways I like this quote from from my friend dead a in one of the Indonesia update volumes he said Indonesia was born a free trader because of its geography yet it is consistently reluctant to accept globalization so this is another one of these sort of historical legacies I think one two three fourth one is challenge of catching up so this is I guess the legacy of the Zaman colonial beef colossi T de Sala Joomla or ah Indonesia anthem Atari University us para back to Malay Merida ah ah de la do a reboot or on so clearly the legacy of history the ketchup is a big issue next is ethnic segmentation I think it's clearly looking at Indonesian history over the long run the challenge of ethnic diversity and ethnic segmentation clearly affects a lot of economic policy and thinking especially the issue of innocence of pre booming non-prime Umi and a bit like Malaysia but of course Indonesia is also very different respect and the final one is the legacy of history the destruction of property rights so this is one of the arguments of that Acemoglu Robinson even since the colonial impacts involving the destruction of property rights and therefore running a modern commercial economy with cure property rights is always going to be a big issue so that's the first one I need comments on please Mohan van tranh have I got this right Kira Kira am I missing something do we say Tanya Sakura and Percy better natty said yeah they'll be back Taurus shall I keep going okay Jamaica see okay and a bit more yeah one more this I like this one so somehow there's been there's been a feature of Indonesian economic policy has been pragmatism mooking can opener effect effect or dulu pragmatism has been an important factor so I like these two quotes here from two of the founding fathers of Indonesian economics profession sadly then Pat's the Metro but sadly when he was head of the investment board the young better and sebelum Becker BM was called something else he said we when we started out attracting Tama we didn't dare refuse we didn't even ask for credentials yeah pragmatic and that Metro when he was part of up to the ax men Treecko Wang Han Town Lima palawan he says I was a strong protagonist of foreign exchange controls then I support happened under sakano I know how easy it is to smuggle the goods I know those who are close to the sources of power will get their hands on the foreign exchange so I think this has been a feature of Indonesian economic policymaking as well this the the influence of pragmatism in a sense and I think that's why one of the reasons why Indonesia has been an effective economic crisis manager where sometimes it has struggled to achieve the really high growth rate some of its neighbors so that's another one of my questions for you okay so long-term growth record so this is this is clearly this is a well known story a lot of this comes from actually my work with REO Thank You Harry office hope with this so immediately one big question comes out of those anchor anchor any so this is just the sorry this is just the growth story by the way you want or Guinea took untucked a buildin gambarro nene saya dapat bando and diary salah satu masa swear estiga da knew some of you know him Chandra tree Putra so if you're watching this Chandra terima kasih banyak so he helped me with the figures and tables so immediately when you look at this figure you see one big question where you see two big questions coming up er well first of all you see this notion of path dependence maiming salla you know there's an argument that in the development economics literature that countries are prisoners of their history clearly Indonesia in some ways every country's prison of history but it's not a prisoner in the sense said Salama Lima Peru County DA de comercio an economy tourists eager Pulu town economy mad you cepat sakali so that's the first point path dependence is refuted you know the resistive urban literature saying some countries are never gonna develop sol-gel are stylin castles Indonesia e2 ozawa Janka Dora Adlai camacho an economy border baru then imagine an economy era democracy forbade and triple purser yeah yay - sikita doer two percentage points faster Zalman duo so I'm not here as a defender of Papa soeharto just observing facts yeah and then questions come why's it so that says GDP growth Bharati Cal old per capita GDP growth the difference is pretty big yeah it's from a bit over five percent per capita about 3 percent per capita so boy to Qatar economic growth to a capita humpy you do a khalili beating he pada work to do Lu so what's the reason for that why is it well his growth been slower is it partly that the prolonged effects of the chrismal 97-98 maybe initially that would be the effect that it's unlikely to be the story for the current period so what else is explaining it so that's another question where I want your advice please some of this some of the growth some people argue like Paul Krugman says it's a myth that is because it's there's no total factor productivity that's wrong again as hereo is shown so aside to Corbin sahaja yoga from his PhD dissertation miss Anya the TSP growth division being positive has it been achieved just by running down the stock of natural capital yay to green growth kichul sakali will innings to be well that's part of the story it's not the main story ok so that's the sort of growth story savings and investment not much there's not much to talk about so it's a story of growth leading to rising savings rising investment Indonesia was a really low investment savings country in the before 1970s and that's what you expect when you get low economic growth and then savings and investment rose very quickly the one puzzle on this big picture long-term is why Indonesia switched from current account deficit to a current account surplus from Soeharto hero to democracy era so we know that a current account deficit and surplus is is another way of saying it's the difference between investment and savings that is Indonesia was drawing on foreign savings most of the time during Suharto year that is running care account deficits whereas after after that period Indonesia very care account surplus for a lot of the time not now but that's another question what's changed in the Indonesian economy and the globe international comparison true we never economists talk about growth rates it's always got to be deep banding can upper what's what's the comparator so when I first came to Indonesia as Pat Lally can tell us that comparative was Nigeria become because in 1970 per capita income Nigeria Indonesia kirakira summer so Bertoni Nigeria let me think II joomla pendidikan Nigeria levy Maju but similar economies big tropical economies exporting oil so that comparison is no longer relevant per capita per tonne per capita Indonesia Hampi Antigua Cali Libby Tinggi during Nigeria so what's the comparator well there's no obvious comparator in a way Indonesia is is unique well of course we know that it's unique but there's no obvious comparator unless he tells me there is an obvious comparator but Philippines may because it's got some similarities you know and the garrick a pool around crisis and democracy but it's different also very different history and different natural resource space and India yet some comparisons but also very different anyway this is a sort of story for the comparative growth story so the main story really is what which is is this story and it's a bit like the it's a bit like the Asian Games yeh to chena man and but the sort of comparative story is pretty clear Indonesia's done very well remember Jaron looper yeah Bob Linda perturb per capita Indonesia Libby tingey daripada Jeana some basic eat operating on town Symbian to LuAnn so rumba Indonesia because Indonesia remember the big turning points in Asian economic history were Indonesia 1966 in China 1978 so China opened up about 12 years later than Indonesia in India open up about 1991 so 25 years later so Indonesia began to progress more quickly than the other Asian giants especially India and China because it opened up earlier so record of crisis management if you think about you remember the famous economic historian angus medicine used to remar tell us remind us there you've got to think of growth long-term growth and you've got to think of the interruptions to long-term growth and the interruptions to long-term growth normally happen for two reasons one is an economic crisis and secondly conflict and so crises really matter because crises can set countries back for a long time just by young can color Indonesia today at a Chrisman town simulant bus simulant OG similan two dissimilar lop an indonesian there would be a much richer country if it didn't have the crisis tronto surger Philippines Philippines Salameh do a pollutant t-that Maju although I canna Croesus young dalam para town telethon Pulu once a crises matter therefore you have to think about intonation story in the context of crisis management and this is where I think Indonesia's been a a big success story if you think of the last 50 years each had four crises for economic crises putting aside the politics for economic crises and three of them it's managed pretty effectively mid-60s with which Brasada readalong agree was a homegrown crisis the mid 80s when Indonesia was one of the few energy exporting countries to adjust to the sudden drop in global energy prices the mannequin negara line became support Nigeria then line line because of effective reform is salmon I guess popper alleyway Donna oh my home the key reform at 97 98 was the one major crisis which I'll discuss a bit later and then global financial crisis Kira Kira Indonesia today Adam Ursula so for crisis episodes three of them quickly managed one of them became serious so that when you're thinking of long term growth story you have to think of crisis management as well as the okay so that's that's another part of the stone that's just the crisis story this is a paper I did we did a with us a happy bursary on the comparing the two crises 97 98 and 2000 so just Indonesia managed the second one effectively okay so continuing on just this is another topic so I'm just going through them quite quickly you kind of gambar on the sir so structural change it's again this is a lot of the work I've done with with hereö on structural change the sort of conventional story not really much to say for most of the time that is the main structure whoops the main structure of change is as in all countries which which dynamic agriculture declines industry Rises services rise that's sort of what you expect so nothing surprising the one surprise is the sectoral drivers of growth are different in the democratic era deboning can salmon Suharto and the obvious difference is the obvious difference is the the driver of growth shifted from the tradable sector to the non-tradable sector especially from manufacturing to services and that's a pareo and i worked on quite a bit trying to understand this question of slow industrial growth and i have some discussion of this question in fact we have a paper on that harry oh yeah on indonesian industrial palsy what was jus dona Pajarito indonesian industrial policy catching up slowing down and and muddling through catching up slowing down muddling through that was quite a catchy title yeah if we may say so so why is manufacturing slowed down sharply since so there's some discussion I think there are three key factors partly the Dutch disease but that's not that's not the only explanation because in the first commodity boom Indonesian industrialization we're still very rapid secondly a general story of China's rise that is lowering the global price of manufactures and thirdly and probably important the domestic policy regime has switched to favor implicitly favor non-tradables over tradable x' but that also is where i want to get your advice am i it's a big question in particular meeting out on the way global industrialization industrial organization has changed indonesia missing out on the global production networks is Almaty hi I didn't see you hello how are you so that's that's the title of ebu MOOC these PSLs a to co-brand saya Duga good the favorite thing actually I think a major any juga Danny multi-streaming Tamika see it's my favorite command your body thank you so dissertation title why is Indonesia missing out on global production networks right that was it wasn't it yeah part of the story is actually the Mukti story and also my colleague at I knew some of you may have seen them had access to a lecture by my friend and colleague premature and heretic also it's the EBU Mukti and the Chandra story I think combined with some of the labor market story for example that that acid was written on so that's that's that's a big topic which is just members putting it as a question for you to comment on please okay international dimension so this is back to this I see as a central paradox that by and large Indonesia has has benefited from globally except when you've got sudden commodity boom and bust or when you've got global capital volatility in general Indonesia has benefited from global engagement but back to the Quebec to the eggman of partaking and we do Lu Indonesia's always been pretty skeptical of the benefits of globalization so that's the sort of general story which I want to betray since and that's a little bit like the book I mentioned before of n booth not the recent one but the early one side all something like a history of missed opportunity so like that's also part of the story as well in a sense not capturing the benefits of globalization and in a way it's back to that mukti story again that missing out on the global production networks indonesia still missing out yeah yeah in fact in the book just out edited by tacho parted a new boom era pangestu on whatever the titles could we've got a paper in it with another one of our core van daisy pan a on this globalization missing i think okay so so that's the sort of story i won't go into detail but it's it's it's again rising openness this is just the sort of standard measures of open this indonesia sort of like other copies not that different that's the trade chairs and this is the investment story and this is that and this is in a sense the most interesting part of the story which is the rise of manufacturing exports this is stories a sense i think in some ways the second most important period of economic policymaking in indonesia if you think of the mid 60's being perhaps the most the second most important was the big reforms of the 1980s which I don't think I've ever been repeated at least in the way they've been so this is the rise of Indonesia becoming and industrial exporter for the first time so that's an important part of the story I think so and then the other part of the story and international dimensions is how Indonesia has adjusted to external shocks so you have you to what I pathi size that you would get a close correlation between trends in the terms of trade that is the rate that the ratio of export prices to import prices and the real exchange rate and so the dark line the real exchange rate is kind of telling you that story but this is the this is the oops this is the sorry this is the oil boom in the 70s and this is the oil bust and this is the exchange rate response so that's part of the reason why Indonesia I think has been a pretty effective macroeconomic manager following the terms of trade so so that's sort of international that's the International dimension story one chapter in in three minutes but trying to give you a kind of sketch of the story and again one of the interesting questions is Indonesia responded very effectively to the commodity boom and bust in the 1980s but probably less so this time this this century so and a very nice monograph by Atropa to Naru and Shawn surah Hodja the bad times bad policies remember that famous statement by sadly good times make bad policies and bad times make good policy so the conjecture of petrol and pump series may be that sort of sadly so-called sadly law doesn't apply question mark anyway yeah okay so that's the sort of that's the trade story so the macro story so I think this is generally an Indonesian success story in the sense that and I think it relates back to the earlier point I made about inflation aversion Indonesia since 1967 has basically been my country as I said where macroeconomic management has been guided by inflation aversion once you have something traumatic as hyperinflation you kind of it's in the DNA to try and avoid it so that's that's the sort of story and it's reinforced by positive neighborhood effects that is most of Indonesia's neighbors have been effective macroeconomic managers you know Singapore Malaysia Thailand so that's the sort of that's the story except for this one big crisis event which I won't talk about because we've Bernie actuly son Tintin Chrisman but it's a story of everything going wrong at once in a sense a perfect storm a perfect storm in a negative sense of both international factors and domestic factors both becoming very hostile to Indonesia and so domestic policy settings in a sense were hadn't adjusted to the new world Paris 82 of global capital market volatility raging change maybe was affected and of course the IMF played a negative role during the Christmas so that sort of story is that's a separate story but this is part of it then and so this is the general macro story of generally low inflation not always low enough and that's been one of the challenges for in a fiscal story again moderate Philly moderate fiscal deficits in the cerrado era because of the balanced budget rule in the democratic year because of the 2003 fiscal also fairly but still so the macro picture is good to tepee to tepee and so these are some of the two tabbies every country the city of megara a data tepee and this is this is to Topeka Indonesia the fiscal efforts is not strong not much progressivity in the tech system subsidy problems central government a central local government and some of the monetary policy issues also I think still but but big picture is is I think pretty good compared to what remember the counterfactual is what it could have been the big picture is still not okay so that's that's another chapter so I'm just quickly taking you through some of these chapters and trying to give you a picture of what I the sort of general orientation so this is this is another chapter on sub national development dynamics keypoint ease Indonesia has stayed together I remember Pat of town Pat Lally would know this better pay that back to Chris nan had a perceptive over Indonesia a commentary Yugoslavia I can what do you like holding together that's obviously a success story exactly that's right exactly that's right exactly that's a very important point then thank you yeah there would be no garage over and the garrison Madrid Nagar Papa and I'm not yeah that's very important that's right you know Thank You Mona how do you yep cause of other fiscal yeah that's right yeah yeah so that's the important point also Jimmy castle yeah so this issue so we had a up to Indonesia update on sorry Indonesia update on regional development about three or four years ago including speakers from here like dunno and others and the key point which made by a political scientist some of you may know Marcos meds now Marcos said don't just focus on the economy in the social stuff the key thing is the designers of autonomy day era the main objective was to keep the country together so holding together so in a way I'm looking at the economy but it's the it's the politics which in some ways is really more important as far as we can tell it's it's difficult to estimate cross across country but as far as we can tell inter-regional inequality has been quite stable in Indonesia since we've been able to measure the the national the regional accounts remember beginning in the nineteen seventies people like Indra hindrance Mara used to measure it and the orange line which is the relevant indicator is pretty stable this is some work I've done with another one of my Korriban yogi Vidya Tama so it's held together it's held together partly by the the fact that regionally inequality hasn't increased and so that's the sort of that's the map of Indonesia which everybody knows pretty well huge regional diversity but if you look comparatively at Indonesia again the comparative story is important so what's the comparator for Indonesia on regional development will you'd look at maybe China you'd look at Brazil look at India or look at Nigeria and the paper the important paper by you know the guy from the World Bank global inequality Milanovic Madonna paper on comparing into sub-national inequality in five big countries pretty good in terms of you know it didn't hasn't had the big increase in inequality that for example China has had antara kawasan Timor denkova son miss Anya so so the the regional story the big picture level is is pretty good I guess the perhaps the biggest challenge my impression is the biggest challenge Mabel quite a lot of challenges inevitably because Indonesia Negara Kapoor law onion turbo Sadie duniya so inevitably addabani act on Tongan so it's the biggest regional challenge I guess maybe use maybe as popular question marker again I want your comments on it is but propo in some ways Papa is a singer popular as being partly it's it's like an economy Pacific salata and so the comparative for Papa or maybe book and Java tetapi me Sonia Papua New Guinea and actually Papa Papa Papa Papa Papa Bernie Pablo Barrett module abhi chapati pattern negara an agree Papa New Guinea lasagna so they are trying to think about some of the regional challenges and some of some of the other regional challenges I think everybody here knows them well so again I just want your comments I think one of the big challenges is the large vertical fiscal imbalance that is between governments central government allocations and regional government depended on a CD or I mean with Masika teal and so you get this big vertically fiscal imbalance if well no incentive for a Marine today error won't talk about independence in theory because so you can sort of that tension between plus memory to push up I mean he's still learning a big unresolved issue also can the central government incentivize local governments to improve their performance I'd like to get back on that question I think still there are incentives for per mcaren or maybe not as big as before but still quite big incentives I think and the bigger question is is is federal fiscal federalism working so the theory of fiscal federalism says that mobile resource that is yaqoob motor then then tanaka Kuja i can pin de de roda mana governance quality Libby bike so he said happening in Indonesia because that's the principle beyond physical federalism sure it's happening so that's another question I want to pop out Lally please can you give me the answer later so that's that that's that's the sort of regional story okay so this section and this is drawing very heavily on on scenario in fact in the last month I've been writing another paper just on Indonesian living standards so I've been reading everything from smear room and it's very impressive Tomas of Leo and some other people here so I hesitate to say anything about living standards they depend purser to pursuit of the holy spirit but so general story and again I want your comments is general story is sort of pretty well known that is very rapid poverty decline yeah I think I think this is from you I think I see Jimmy Cassie so this is the genesis of EPs story of poverty falling Leah then later oddly because growth has been slower as I showed earlier and also because the growth poverty elasticity is probably lower now than it was in the earlier period and that's of course related to the rising Gini ratio especially this decade of this century so that's the sort of that's my argument and again I want comments please so the major issue maybe is not the Comiskey none but the near poor because again as I said and others have shown you get a lot of movement the artist Andy Bob burka is Comiskey none and so especially the the the vulnerable and the near poor dealing with catastrophes maybe again question mark maybe poverty trap so at early stages of economic development poverty Falls quite quickly big when you got growth but then at a certain point growth growth is not enough and especially when you need targeted targeted policies for the poor and that's partly what I see presented at our conference in Singapore in March yeah the sort of targeting inside for the poor Christian of which poverty line should be used question of data quality I don't know applica other staff DC any staff 30 bps so we're relying on bps data which i think is pretty good comparatively but maybe it's missing the top and the bottom this is I guess the argument that it's hard to it's hard to estimate expenditure patterns for the top in the bottom the question is how effective is a targeting so that's what Astley presented the paper in Singapore in March and so that's the poverty story in a quality story this is where I need your guidance III have had positives for ye Laurie's risen so sharply in this century but of course it's not easy to calculate partly because the standard measures of inequality I'm not additively decomposable that is who use a genie you can't decompose you got to use the mother indicator and as useful in Outlook expects so some debate about the about the what's happened doing equality the the widely cited paper by actually now my my local Member of Parliament Professor Henry Lee Budhia guru purser Anu Sakura and Jody and gotta they pay here in my local Member of Parliament andrew lee NP around the ring they use this top incomes approach and they find there's a bigger increase in inequality than using the genie but also a paper in the b is a couple of years ago by those scholars from Burlando yeah on measuring inequality so so it increased but how much is it increased and why and these are my hypotheses for all these questions why is inequality increased i think part of the story is labor market it's the labor intensive growth and labor market segmentation it's maybe it's the second commodity boom well the first commodity boom was didn't lead to much increase in inequality in fact and another one of my Korriban at Anu is working on this Doni pasa reboot comparing the two commodity breads so maybe question mark not clear maybe it's a global story of rising high end incomes especially in the services sector you know financial services happening everywhere maybe it's decentralization autonomy they are a but not really clear as I showed earlier it's not it's not obvious that regional inequality has increased there's not much progressivity in the system so this is some work which another one of my Korriban was involved with that so you may know Matthew way boy from the World Bank and so this is showing I guess what we'd expect which is that Indonesian inequality starts off pre pre tax and transfer starts off lower than Missouri near Brazil Mexico but the other countries do more to redistribute does Indonesia so Indonesia's system isn't all that progressive so is that part of the story or is there a kind of story - is there an industrial organization kind of enterprise story that the berries - SME development and maybe a still a problem that is it's hard to start businesses although from our discussion on Saturday look D it's not that hard right I heard some case studies of booked he can tell us later the question is is Indonesia especially the app to the Chrisman is the banking sector not so easy to be able to facilitate SME startups that kind of issue question mark I don't have the answer these are just hypotheses so again I'd like your comments okay so education health so this is from this is from Daniel's where's Daniel yeah hi Daniel think so this is your work Daniel which again Daniel did a great paper in conference in Singapore called a white elephant right what was it called again in education Indonesia a white elephant question mark is that right a great paper thank you and also the book which Daniel edited the update book with Gavin Jones and several other papers so listen this is this is from my reading of Daniel and other people clearly impressive quantitative improvements near Universal literacy user schooling so on gender gaps utter but taboo tito-tolo Lou Bharati burning can negara Islam line if you're using that as a comparator so and maybe the funding issue is no longer a constraint because you have to spend twenty percent of your budget on education but then these are some of the challenges from listening listening to Daniel and other people then you'll please tell me if I'm missing something so there's the quality indicators Indonesia clearly lagging on these Tim's and Pisa these the standard indicators education outcomes highly correlated with socioeconomic status again that's what we know from his work higher education sector still still lagging quite a bit and maybe education labor market mismatch so the story of you know lots of high school and diploma and even degree graduates coming out but they're not fitting in with the requirements of the labor market so that's that's the story I think but again I want your comments and a somewhat similar story for health indicators that is big quantitative improvements but still some quite serious problems and including of course standing so this is the same set of indicators because I showed you earlier but this is now 55 years later so you see Indonesia the kept up is incredible from remember years of schooling before was 1.1 now at 7.3 life expectancy like duapulo Libby town so big improvements so that's obviously the big story and the question now is as Indonesia calorie to massive Kallenbach upper middle income countries the policy and in labor market so this is this is based on a lot of the work of my my enemy Chris Manning you know what you know what I eat an enemy I think monkey knows why he's in the enemy because we're the size her in color the lopping antennas so he's my enemy my Tennyson my very close friends so Chris has done a lot of work and and of course well and that's that's your field now I think you're becoming the Chris Manning about do Appaloosa oh right on labor market so we're relying than you I want to tell us what's happening please it's a big story I think is clearly one of the the much slower structural change in the labor market and probably increasing dualism in the labor market because of the change in the regulatory regime especially minimum wages and severance pay again which you've written on that as well so I think that story is there's an important story so of course with democracy you get freedom of association which is a good thing but the labor market outcomes don't seem to have been as good especially looking at formal sector employment growth which seems to have been pretty weak most of the time since 2000 okay almost finished ten minutes chuckle Jimmy Cassie so in another one is environment so here I'm relying on my my Bob that I knew Budi Rizzo so demo done a lot of work on it and Indonesia clearly a case of the so-called environmental Kuznets curve remember Kuznets curve was about inequality said you shaped the inequality that is inequality rises and then declines in fact now shown probably not correct because countries and our rising again in many places but the environmental Kuznets curve is very popular concept and that is basically saying country's environment deteriorates up to a certain point and then it begins to improve and so although we don't have really data on it Indonesia this is again trying to get a sort of story on environmental indicators over the long period by the way just I should have mentioned earlier one thing which I noticed trying to write the updated the d c-- katika is it's quite hard to get data series juncker panjang that is a look at bps and other places and you get short term data series you know make ten years or twenty years but for develop a konami developments a long term process you need 50 years if possible so I hope one day we can get someone can produce a statistical series for leading indicators Juncker pangaean yay to Lima pollutant then levy so it's quite hard to get them surprisingly difficult given how good dps is as a statistical organization so yes this is a general sort of story of environmental indicators pretty woman deforestation and urban amenities the estimates of green national income well upon Agra Cassim among indicative that indonesian growth is partly because of the use of non-renewable natural resources but it's not the main story but if the main story is really growth however you measure it some of the solutions to environmental issues will partly maybe if you believe the environmental Kuznets curve at some point at some point as you approach may be other middle-income standards environmental priorities begin to change and policy begins to change so shantou such as my Japanese friends remind me Japan pada town Lima pullulan and i'm louann the Correa I got kottoor sakuramiya to salah satu Negeri impelling Bercy so this is sort of the process of maybe it will happen in indonesia gradually anyway so some of those so these are some of the issues removing carbon subsidies were banned transport the transparency you know the tragedy of the commons SE forest centers may need some sort of global and regional support was was read this the norwegian program was it helpful on not like some advice you become more and more service economy environmental amenity will improve anywhere cuz services tend to be less that's the sort of story I want to tell for the environment section but again I'd like your and finally and you know way it's probably the one that economists have the most difficulty with we need advice from political scientists to try and understand the relationship between institutions governance and economic development it's really quite a difficult topic to kind of analyze and it slightly be because it's at the intersection of economics and politics you need both economics and political science some guidance so do institutions rule so Danny Roderick at Harvard says institutions rule Jagdish Bhagwati at Columbia University said my money to sulla that institutions are an outcome of it habitations lead or lag Indonesian economic development and what difference is democracy made so first point to make obvious point is you need to be comparative because you have to understand compared to what because capital is internationally mobile therefore the the the ability to attract capital depends on how attractive you are compared to other countries that's the first point second point is how to measure institutions and governance it's really difficult inevitably subjective there are a lot of metrics but they're mostly opinion based surveys so these are some of the ones which are used transparency international corruption perception index the logistics indicated the World Bank series the ease of doing business and the world government indicators the sort of story it tells for Indonesia is more or less what you'd expect that is Indonesia's ranking on most of these indicators is sort of about the same as its ranking on unconventional economic indicators so what does that tell you well it tells you that institutions don't really lead development and they don't lag develop they kind of think those are two of the two processes work hand in hand so it's not clear that you can make a big story out of out of just looking at the aggregate indicators and that's partly also because it's difficult to get long - series on these indicators even though they're pretty weak anyway but most indicators suggest that Indonesian rankings are similar to what they are for development with that one major difference of course which is on the indicator of voice and accountability Indonesia main man mojo Chiba it's the most democratic most democratic nation state in ASEAN and probably the most democratic nation state in the Islamic world I'm guessing so it's big improvement in voice and accountability in a way the challenge is it hasn't been a corresponding improvement in these various indicators of government effectiveness so working out the link between democracy and government effectiveness is again I'd like your comments on this so one way of thinking about is sort of unpacking the institutions and governance story is to provide case studies because often the case studies are where you really kind of understand the process of policy reforms in this part of the paper I've chosen three powers three three case studies just to kind of illustrate some of the dimensions of governance and institutions that so the first one is policy reform and so here this is sort of standard political economy where you identify the relative the relevant policy actors the decision-makers you know legislature executive think tanks likes miru business foreign domestic blah blah blah you work out their objectives and you work out their relative power and then you can kind of make judgments about about the outcomes of policy on the interaction between these factors it's mediated by the power of ideas clearly that most paper by the famous American economist and Krueger you know the power of ideas ideas often win it's mediated by bureaucratic capabilities and so on so we sort of have a story I think of the cerrado era we've been written about by a lot of people in a way the perhaps the most influential paper was the paper by the late Haddie's Castro from CSIS who wrote a wonderful paper on the reforms in Indonesia in the 1980s so the story was and it's a bit related to that so-called suddely law that is sort of very simple story is so hot Oh in a sense lacks political legitimacy and therefore his legitimacy rested on his ability to deliver rising living standards which required rapid economic growth and for that he needed the technocrats the so-called you know with Jo Jo Berkeley mafia and they were empowered when the economy was economic conditions were difficult and when economic conditions were weaker were so I was stronger there they were less powerful and that by the way was also the PhD dissertation a new dissertation of had a bursary in a sense the link between oil prices and policy reform and so we sort of have a story of that and then Hadi wrote it up in the 1980s had in Indonesia come Indonesia reformed effectively in the 1980s and that was hurry sorry in the sense it was linking this sort of analytical framework drawing on these currents I mentioned to explain why you know Soeharto needed growth and therefore he needed the technic rats this is vastly simplified story but I think the essence is quite powerful so the question now is for the Democratic era yay - so Jack Chrisman we don't really have such a clear at least I don't in my mind I don't yet have a clear analytical framework for understanding policymaking so I think it's one of the big challenges for social science researchers currently to try and understand the kind of the policy framework so part of the stories you have to sort of think of different policies so you think of macroeconomics and microeconomics so again Indonesia Sabah gala gah-la ma Indonesia's a pretty effective macro manager that is Bank Indonesia is credible and independent the Ministry of Finance runs the fiscal also the macro story is easier to comprehend but the micro story is much more difficult partly because the number of policy players is now much more diffused which is what you expect of course you know democracy so working at the kind of analytical frameworks is is difficult so one one approach is perhaps what did a suggested in a recent paper you have to think of strategy of small steps not Big Bang reform anymore just small steps incremental progress maybe and I mentioned before there's no clear correlation between commodity booms and reform that's that's the argument of in that nice paper by Joe Patton ruin fat sham sahaja so that's that's the kind of this is a game where I need your advice but this is the way I'm kind of thinking about it another case study I'm looking at is the persistence of corruption so controversy the Indonesia want to steal our global like akka in so that's an Indonesian Indonesian invention it's a car came and as a lot of people have written about democracy and decentralization meant that Kaka in democratic and decentralized sorry did you oh sorry I'll shout I know I'll be our own Australia and should speak loudly so that is another question so clearly note there's no correlation between corruption and growth that's the general Asian story if you do a scatter diagram of corruption economic growth you don't see a clear pattern maybe even a positive one you know China the fastest-growing economies also ranked pretty highly on corruption it's important to develop a taxonomy to distinguish between rent-seeking and bribery remember that was again the seminal contribution of an Krueger the political economy of the rent-seeking society rent-seeking technically is not corruption it's often quite transparent if you vote if you lobby for protection from government for import protection that's not corruption but it's fancy so thing you have it you have to have a taxonomy between rent-seeking and incur up ssin so in Lee Kuan Yew's Singapore there was no corruption you'd end up in jail if you corrupt but there was Renzi typically right you helped to be in the Lee family I hope I hope this streaming isn't going to Singapore Munk inside tidak boleh muscle next time so so rincey and you have to really they have different drivers different explanations and different different implications so then these mediating factors are relevant the more complex the regulatory regime the more scope for corruption openness tends to limit corruption not always but can a civil service reform is relevant likely order of detection and prosecution so these mediating factors are relevant and then what's democra what difference is democracy may well it's made this the scope for civil society action greater but it's also created this someone once said the only thing worse than organised corruption is disorganized corruption so sort of question you know putting aside moral considerations question like so there also this is the kind of way I'm thinking about the issue but I'd like your advice a final one is just working out the division between state and market what should what does the state have to do I mean at least provide directly or orchestrate its provision sigh things like legal system police service and so on and what things are best left to the market so if you look at Indonesia like almost every country in the world in some areas you see not enough government in some areas you see too much government so I give some examples of where I think for Indonesia of the challenges lie okay if I meant that's perfect timing because I've finished just about okay oops so that's my story someplace of Karen summing up so it's just a quick summary I won't go through this but this is looking at the two periods what are the continuities and what are the changes among thought of our road and you know democracy so this is my kind of take on it there are continuities and there are changes the continuities fairly rapid economic growth but faster earlier than later fairly rapid structural change but the drivers of change sectoral drivers have changed between the two periods macro policy pretty Britain's and stable and conservative but the mechanisms for achieving it have changed that is fiscal law and central bank independence have replaced balanced budget and in a subservience and central bank persistence persistent ambivalence to globalization I think that general story in vote in both periods sectoral policy a consistently strong industry policy rhetoric that is you know importance of promoting industrialization but policies not all that not all that successful Tourister on yeah it's hard to do industry policy in a globalized world I think agriculture policy has probably changed here's the expert Pat Lally on that but my impression is that lady that Chapal see earlier emphasized you know rural productivity and now it's become much more about rents and distribution but I'd like your comments managing natural resources that's always been difficult this is sort of like any natural resource which country Indonesia struggles with the resource curse like like Australia like many countries so natural resource management is been difficult institution so of course the major institutional changes indonesia's now one of the most vibrant democracies in the world greatly increase regional autonomy more independent legal system but it's also quite a few continuities in institutional development ownership I haven't talked much about ownership better ownership patents corporate conglomerate ownership has changed but it's also pretty similar once you take out the Suharto family from the earlier period and some new actors but it's a fairly similar story fairly high levels of corporate conglomerate concentration comparatively and social indicators are discussed already pretty good social outcomes but some challenges especially rising inequality and labor market issues employment growth and education challenges okay terima kasih banyak maths 8b Geritol uber knockin looking forward to your comments thank you for Hull Hill is really fascinating and the slide oh I noticed that a lot of questions and comments it's around like 300 scones no no I'm kidding I'm kidding okay so no I think I opened the Q&A sessions worse but during that session you still can post your comments and questions through slide-rule the hashtag is Hales meaner so three questions forcefully passive and please state your name and institution yes to another one no yeah please be critical okay during what I see here than Allah I think there's only one word to describe your presentation amazing we are looking for what I have one on growth I think everybody in Indonesia has the aspiration that we want to go back to the 7% and even higher rate of growth in a book you a dip it with a Sun can couple years ago from a DP yeah I think the main argument of this book says that this book use the growth constrain analyzes and the book says that the main constraint to higher economic code in Indonesia is inadequate infrastructure current government do exactly what was recommended in the book investing a lot on infrastructure do you think this strategy will pay off will be ever go back to the 7% and higher rate of growth my second question on inequality if we look at your graph we see that inequality actually rises very fast after 1990 then the Asian financial crisis brought it down and resumed again so I am currently working on a paper but a very slow progress my main hypothesis is that the current increase inequality was actually just a continuation of the previous trend therefore to understand what actually the driver of this increasingly philippi we have to look at what happens around 1990 and I suspect that the story will be more about the story of labor market remember that in 1988 we had major reforms the regula see including the pact oh yeah reforming the banking sector and everything so I'm just curious about your thinking about this that that the current increase inequality has nothing to do with wheat reform I see with the centralization or with just a continuation of the secular trend if during the early world thank you terima kasih banyak sure that's you've asked to in a way probably the two biggest questions I'm struggling with and I don't have clear answer but let me just try and sort of have a pet robonyan because they both I think there really are the two big questions I'm thinking about so on the growth story the gap is quite big in per capita terms right order Beaulieu leemer percent per capita rat errata and now it's sort of tedius in so it's a big difference if you do it per capita which which is the relevant measure why why is Indonesia not growing as fast so we don't know there's a nice piece in the air cut modular economists recently economists don't really understand growth exactly you know we've got growth econometrics we've got growth the composition analysis we've got a lot of theories but we can't really tell why a country grows at 7% another country of yours at 5% so wig it's conjecture as I see it so if I look at the country so which countries now in Asia so first of all the global environment is people think it's hostile or negative currently but actually a lot of countries are doing pretty well so tanto sahaja India China Vietnam Philippines all growing six to seven plus percent Philippines is a really interesting case because Philippines was considered always the dropout in a way Benjamin Higgins dropout really is the Philippines from 1980 onwards or even earlier so we just finished a book on the Philippines with friends from university of Philippines why is the Philippines now growing at six point five percent almost seven percent and you know we have conjectures and we got theories but but we haven't got a precise at pinpoint answer and even even India why is India growing so fast I mean we sort of know it's it's opened up and all that and democracy sort of works and institutions some some of them are okay we don't really have a very clear answer so we're in this sort of murky world of conjecture where we don't really know precise answers so if I think I'm Indonesia why is it not growing as fast you know in infrastructure clearly is one of the factors but if you do someone's did one of those cross-country regressions on growth and infrastructure I forget who it was and I think the main conclusion was it was really poor infrastructure really was an inconvenience not necessarily a drag on growth you know the argument is as commuters in Jakarta instead of having a half-hour commute you have a one and a half hour commute so it's inconvenient is it really causing growth to be lower question mark I'm not sure so so my instinct will be to say yes if you look at all that if you have a single model of determinants of growth clearly one of the expansion valves would have to be infrastructure and the quality of infrastructure is it the main factor I don't think so it's clearly a relevant fact that is a main factor I don't know and taking the Philippines example again Philippines has pretty matthew colorado hong philippine dcv Philippines has pretty lousy infrastructure but its growth the growth acceleration really began around 2010 in the infrastructure was even worse I think of infrastructures being one of these fact you know one of these right hand side variables but not probably the main one I mean I think I kind of have a view that capital goes where the rate of return this is a simple view of you know basic economics capital goes where the rates of return are highest and the rates of return depend on the profit or profitability in the tax and transfer system my impression is it hasn't changed much there's a labor market story which is different but otherwise yeah it's not clear but I think your point is absolutely right itself you shouldn't see the inequality issue is being caused by or associated with the arrival of democracy but also regional inequality not clear that that regional inequalities changed much would you would you say I mean this is the work of Yogi and others who do this very carefully so we know clearly that inter preventional inequality has been pretty stable all the way through we're taking out the mining enclaves we have we're less clear about if you measure into regionally inequality at the couple carbon level not at the provincial level it's partly because we don't have really consistent data in a custom acre and all that good Christian man but in everybody what do you what do you think awesome yeah well we will discuss this again when we have then be analyzed great yes actually that's an important point when we've done the analysis this bania al-munkar song to mess up Barry SIA Vanya I'm on call everyone has their favorite theory and you need to do the analysis that's and that's why smear of a mankinis democracy pass so there is a question from participant that John just seeking democracy has influence to the Indonesia economic development because during this Suharto era actually people were controlled but the economy is still high what do you think oh wow this is a big topic the relationship development and I don't have an answer I mean clearly if you do a plot scattered diagram you see almost no correlation hello Sully oh oh hi oh hello hi sorry so it's a big question and that a really important question and we we don't really have clear answers so this there's a nice paper recently some of you may have seen by SM uh glue and others Robinson yo if anyone's going to get a Nobel Prize it's going to be a some hot glue and they have a nice paper in NBER paper called democracy is good for growth highly recommended do you read it it's a very technical paper but it's a really interesting paper so they're arguing the democracy in the end is going to be good for Christ and they have a kind of technical explanation for it if you look at the experience of this kawasan Asian Timor it's not clear isn't that lovely it's not clear you know the stars in that remember that first table I showed you of the star economies none of them except for Japan none of them were democracies right South Korea in the high growth Korea Korea Taiwan Hong Kong Singapore China and so hard I've seen the nature so I guess the conclusion is that authoritarian regimes can be I think can be sort of if you like almost bimodal they can be very good or very bad meaning if you get a strong leader else orator in political system and develop a strong development re that regime you can get very rapid development that's the East Asian story from the 1950s onwards in most cases but you can also get terrible regimes if you authoritarian leaders I mean a lot of the African story is of course you know terrible authoritarian regimes so the argument I guess is democracy at least puts a check on excessive sometimes you're putting a check on you know the excesses which might lead to more growth I mean sometimes you know you can you can have strong governments which you can implement reform very quickly so Toronto soja Indonesia patter town left on Hulu and remember in 1983 Indonesia was a cotton petroleum economy that is energy exports have a certitude sikita to Drupal in a person Joomla export in government revenue kira-kira dua proteger Brussels very sector mean yet so Indonesia was in a way of petroleum economy and it could have gone the same way as the other petroleum economies in the 1980s which had a Lost Decade you know Nigeria Mexico and most of the other African countries in that very good book by a guy called Ellen Gale there's a very good book caught by this guy Gil on looking at the performance Indonesia was the star exception in that period that was partly because as howdy successor as paper explained this was sort of top-down reform you know that the the technocrats Holly and Pat we Joe you'd tell told so hard oh if you want growth again you got to do this season is and do it quickly so there was no teeth out of my salad egg and day pay here t-they're DeVito plays he just did it yeah in fact Howdy's point is to making that wonderful paper by Heidi they engaged in a strategy what had he called no politics they didn't engage in big I didn't want to call debates you know doing warm doing liberalisation cuz they probably would have lost the argument this is a Hadees argument and therefore that is did it so that's the case where authoritarian governments we can be effective but of course we know authoritarian governments can be destructive so so of course of course if you take individual liberty and freedom as being the most important thing like a mattias in and all that then course you just say democracy is the most important thing yeah forget forget about growth and all that it's democracy so if you take that as the objective then of course you're right but I'm trying to draw the connection between those political developments and economic policies and outcomes and that's where it becomes a bit more economic growth may in translate the freedom may be interrupt growth but it may make I guess one key lesson is it makes reform more difficult right because when you're doing reform in a democracy by definition you have to get enough of your constituencies in favor of reform so it means if you think of all the policy actors you know thank God nadir sect or business model assing think tanks all that sort of stuff you need to win the argument and so it's a much slower and more complicated process and there are more veto players the point about I guess Mazzoni eternal upon Pulu and disini veto players veto players huh Beauty to Adam so it once so added that you meant at the top as Pat sadly used to say once you get to the top and you convince Papa it all happens quickly is that kind of it's a very important question is that I don't know if I've answered it or not thank you what I preach we move to the second Thank You viola Mattie young my name is risky from UC Davis I've been your quantum admirer not yet your student but my professor are all your students my question is regarding labor mobility so I would like to ask your view on back off labor mobility across regions and also across sectoral Indonesia do you think it's one of caused to slower growth Indonesia given that now we are more modern or more service-based meaning that it needs more Libra mobility in order for the agglomeration forces to work on second question is that I was kind of surprised that you mentioned regional disparity original inequality is not really changing because um coming back to Indonesia this summer like everyone has been talking about regional disparity so is it a fast algorithm from the government for example to be worried about this across within Indonesia inequality across region in ordinary thank you thank you that they're both very important question so if just to take the second one first year before I forget it my little brain so regional disparities yeah ten to Sajha Ito into Tampa and what Indonesia so if I look at the statistics Penda per ton per capita couple pattern Young Turk kya Kira Kira Lima Lima Peru Cali Libby tinggi dari part up Linda burden per capita cable pattern young term ISKCON I think that's sort of them is that right Ilan Kira Kira the top the bottom depending on how you measure he's the guy who knows all these things but so a huge gap year and then untucked propene see the pin abalone per capita provincia young Pauline Calle to Cal team average acaba Lima ballast Kelly Libby tinggi daripada young to a Miskin is it that's the sort of order of magnitude like is that right here on you monka Rick see can it how could something like I said it's really big so I often say when I talk in Australia about Indonesia I say per beta and aunt are the richest and poorest in Australia is about two to one that is Western Australia and Tasmania so it's a huge issue but question I guess is it back to initial conditions it hasn't changed much as far as we can measure it it hasn't changed much for 40 years so if we compare Indonesia with China for example clearly has been a big gap a rising gap between East and West in China and at least Indonesia hasn't had that and the for India as I read it and quite as clear but the bits of India which are really progressing quickly the gap is rising quite quickly between them and the poor states in the northeast of India for example so the gap is large but as I read it not increasing so is that a so at least that's important in a way and part of the reason we know why in China the gap is rising is because of this thing called the hawk owl system which restricts the mobility of people so you can't get a labor market adjustment you know to to respond to big income differences and that links to your first question which is labour mobility one of the strengths of Indonesia I guess is the labor market regionally I think is pretty well integrated well one please correct me if I'm wrong but you know the the freedom to migrate in Indonesia is is pretty high that is people can and we know that in the way in the frontier regions the commodity boom regions migration levels are pretty high so an overtime transport costs have fallen information costs have improved so as far as we can measure you know based on the census either sense or demographic data labour mobility seems to be fairly high and responsive to differences and so we know that you know that kids come to Java for education we know well documented story people move from the poorer eastern Indonesia to the more developed Western Indonesia so I think labor mobility my impression is it's it's it's you know it's it's not a big challenge for Indonesia but please tell me if you think I'm getting the story wrong so the regional inequality story is a big problem clearly even though it hasn't increased and a lot of what I know on that comes from work of my colleague that I knew some of you may know Blane Lewis and Blane Lewis la medicina Yeti will Bank together Blaine's argument is that is that you haven't really seen the kind of in-service quality improvement data era settler autonomy Dyer dari player Harappan Paris at Pallet Town do rebel side to win but para back to autonomy die so that perhaps the biggest challenge and I think occasionally say asana Atticus impotent Berta mooning and ebu stream warrior need anybody more yawning so they look quite the about sopretty get down a primer into lungs honker pimienta die era - tepee service quality improvement Tdap begitu banyak so I think that's an issue how to make the I'm practically to negara federal so how to make the federal system sort of work better I think is still unfinished agenda and maybe it's because my impression if I understand the autonomy to hear a story is it's back to kind of a criterion bhava Indonesia akan menjadi Yugoslavia a pas de back to Chris money for TB TB hair asada autonomy die here so heaven Big Bang decentralization that perhaps didn't have the planning to be able to make it into a took the laksana and so yeah I think that's a very important story yeah I want to hear this guy yeah say yeah this one Dubrow but her public hearing the Mulayam on blender extraction a three-kilometer German to Harper bad news yeah crawl at obscene beginning food ready missing pandas he that can begin recommend it and I couldn't do it the big attack and we have a sudra did it extract senior three German blunders and Pescara the top bridge Ellen kinda diggin the beach Aragon nibbling balkanization nap on that Reggie head one week a sukira the people - I applaud what the de belem added for democracy God their substantive democracy no idea when Jay had fallen Bashar birthday party politic again get the mystery at me go to Louie Ganga have a dick Fernando listen have a dick for a new leash Bo Dietl nothing there for young boogie - good job I can do D mu nu setta that even overload the Germans were Kobuk in mature all since we're stationary bend a bit three so are you happy my wish a PDF puddin NEBOSH a - to Canyon CSF yet to return to you today's envelop Antigua in fish canyon live one where the entry Mexico Nigeria's voice the back again gonna the tube whatever last name will be jr. never in a rubric analyst on both you can only know and you cannot remember that sugar I did it because I can move explore the Kashima can make it as nearly recognizable every day on the Ponyo Ponyo crashing a pack a warning saya most awesome idea at all gosh did he do Lu he took possible to system the region and became it to her check at all of us in Semarang and so Lulu system we took it the robot see the new Maneri wahpeton ipython akita sonic responsive makai do blue brahma guru dunya man chahta hoon aruna think at Comiskey nanda petition would get to LeDoux depending and mana public a man with on boolean Vietnam as he William a capella there is Karen Brunei me unique Republic McCain catch all real penny if he can crisis yeah he'll rip internal is a idea yes okay leave it on there even J assist you - okay I get us aluminum and aluminum whoopee-doo mm was a tornado alley the country is hit well crisis I don't know when but in the past year ladies current Guinea you mean Christ Chris crisis itself and crisis economy at all to do it we said the economic crisis we said a little bit bizarre lucky yeah did he scare an evening clue is Dylan anger in the Republic to the hancher me an apple deidara hit sOooo boopity boopity it that can do low we can open a Madeira mug should never gamble on Caputo son let me see the cat can't air Ayad super a cobra p happen Monica then juga well it does Nyman ink and LBM America done race and I get the Peter had with Juliet live observer Napa yeah able I'm talk about this but don't talk about yourself xuxa of to get American Caprica and never go down you may give a physical president Megawati when it is Lexi did nothing but ice I hear my sob Monsanto Shehadeh Billabong what true democracy see bomba that's against anna-marie data did he did they add their press she did a thoughtful job man opinion multiplicative way cockatoo shibai kappa khabiri say boa well my dear Andrew do add one yeah good picker do you know my dear gamma into the coma did he come rally any extract see shall I introduce Miami so no Madeira the pinja machine running head and Riviera canapa can see me now in theory applied mascara in carlo begin etroesch missionary daddy accountability or on Norman Baja cyka cyka a tea didn't get another winner part a politic commissioned by Hunkin to systemic dreamily parity anger on and dream lay anger on Judy after ran down the anger and River Antonia proclaimed no one did it it's at the heart of the Republic with a bogey to lyrical issue before they all agree so actually we have been running out of the time but seems that you are still into this fashion so should we continue for another like 10 minutes okay um but response to that question so do you want to add tea the bees atomic de commencer Yes Mother Thank You Paulie Annamarie local law from IPPs less there one per team on president so I have to speak a little bit up domestic mad and the tone of pessimistic even no pinellia nerium psycho Cornell the decentralization sat in history moratorium Karen I am among Tamron family had effect if it passed near allow me to speak and bison initiatory there is a mecca right right yeah can I sue daddy evaluated so that evil was a baja Molly thank you yeah Cassie [Music] see daddy moratorium lingo lalu where is a German $3 McCree which already the pancetta City we know that the government realized that the autonomy Dehradun the surrender is the city begitu effective office the data young would be nice if you struts a little bit to the pounce Karen and you use that I angle be terbaru heredity track until he had you know make digital mapping apron and panting then juga again arise amudha mummy Ellen panting Kabuto inside you go to a catalyst to deny opposite in Antibes ecstasy repair Tampa economy digital adapter to my an economy in Asia santoña intimacy very short the policy particular Canton where you to job last durable open blasts the poppy Shakira any akan menjadi driver and took economic development engineer then setup optimist Wow Indonesia comedian and garea Lapine majula geek and then it will open unicorn ladonia added the Indonesia tokopedia bucola pack go-jek tan travel oka then if you analyze the economic economic realities then economic digital doll important when economy Nisha a control yet scary damn positiveness even though at the Juba thumbpick negativeness phenomena program programming under ripping here on the McKenzie kaboom - bundes dance-pop Teresa - Piniella tiene de la coka no es Maru but a sad mom present a second I decided solicita so I think I am gonna bro my point is to to bring a little bit own of optimistic on Indonesian economic development thank you a Tremec SE saya saya Sabaton ISA - Jessica leading an e-book ana saya juga moussaka Lombok optimist be a Sonia my friend say say it - Lallu up to me sexually so my monks are to do ding and Tintin digital economy yeah uber of a bull and Lallu coming out of seminar da new la EBU mari mari pangestu theatre thing Munoz paper yang sangat Maneri Tintin yeah Pinero digital economy then da juga optimist Papua Indonesia my man Sarang in Asia Japan adopts the technology Baru so I think that's a positive development so Christian is epic i added unpack macroeconomic yay - epic era kita bisa leah thumb pak sakera macro 10 Teresa jibanyan kangaroo micro that is firm Gajic then took a PD their line line is it big enough to have a macro story repay us a basic errand balloon hello Delhi had a deal a Juba Tomba an economy not yet an impact at a c'mon Keenan Baron Kali dari National Accounts Perrin Kelly - underestimated yeah he took anabolic sector Jos ijaza demon a per heating and Joomla products e agra agra lemma or like Anna Sousa Ming Akua coup D etat and kata and digital yeah so it's possible maybe where it's being underestimated how they can lead to Mookie larger boo to Manly Beach engi dairy products young resmio Lake Anna this undercounting the sector sector Jassa so yeah I think it's a positive story it's young it's also has big policy implications lasagna took sector pendidikan murid mercy upon took salmon digital and I kiss if you read the the Penelope and re Pat Danielle the bottom may be our inner Daniel bottom forty percent looking balloons see upon to examine some and it's digital so that's kind about education also a big question in Tang sect or Burbank on is the is a financial sector epic a to juga see upon took prison prison micro young muscle salmon digital so yeah I agree with you I'm an optimist I'm afraid we don't have time anymore so I think it's the last question still related about the industry it still possible to apply in from industrial policy which successfully broach Japan Korea and Taiwan to where they are today Oh yang pertama yeah yeah so with Hari oh hi Emma Sierra hurricane question please young pertama you you know much more better place young pertama is it so possible infant industry young super D Japan Korea can you please answer dia tell Jarry banyak dairy saya I think the world has changed I mean in the past it is possible to do in fine industrialization provided that Cory remember Cory ax in Taiwan etc they have a very insulated bureaucrat and and disciplined by performance criteria it's different with Indonesia we almost impossible to put performance criteria and I have a bureaucrat that is insulated from politics Parag is Cara Mia then and the second like we are left behind the word has changed the model is now global production network in global production network it is impossible to have a complete complete production from hulu to Healy so it are Taniya see that it abyssal Akita my Sydney I am motya motya motya products senior to the approver and Mugen assignment ellen sue gotlander silicon Thank You Mario put me on the spot I think it's my serous common is correct at both F James so I like the in fact no is likely the global press a network failure chain so we need to also change their perception of import because I think even the government still have the negative sentiment about import but as we know the manufacturing in Indonesia especially do one engine to accelerate the growth because now the girls 5% is most more because of the commodity like the manifest manufactory sector actually it's quite Hadoop Maaloula so it's like it's still there but not really contribute to the growth so one thing to excellent our growth is actually to revitalize the manufacturing sector and most of the manufacturing input is actually imported so we need to also change our perception that import is always bad because our manufacturing actually heavily in import content so I think there's also something that we need to work on and in a mission economy that import is not always fair because if you want to tap into the global production as an affirmative if we are automatically our import will increase but then our export will also increase and one also one thing that makes our qur'anic on is not good at our our import of our manufacturing is for domestic market which is will not gain the dollar dollar that we use for import but if our manufacturing is for export oriented so we can can get another for it excessive to compensate our import expense terima kasih banyak booked eden Hario book teenybopper corbin saya telah banyak sorry Paris aya so thank you very much actually how you I think we wrote a paper with dead a called industry auto babe a young suda2 area so something like that and then you remember a simple and daddy-doo citta see today a new dissertation governments and not very good at picking winners that losers are good at picking governments so I think that's for her not to industrialize the yeah so in a way managing so who was the creation so that's doing doing industry policy in a globalized world is the big challenge isn't it so we know you gotta have policies you've got to have the missing markets and you know the standards and the certification and the infrastructure back to infrastructure and the schools can you pick we know that firm level don't think so can you pick industry level even though I don't think so and that's look to your story in a way the global production networks you can't pick a particular we know because it's production yeah nice closing okay thank you so much but how so I think we have a special gift from Samara I invite percept to important give this gift [Music] [Applause] and I become your friend scalper okay so alert everyone on behalf of Muru I would like to thank you for your fully attention and active participation for today's seminar I believe now we have a complete story about Indonesia development economics for the last half century so about the questions so whether that anyone who so whether it's true or not so answer it and okay so we have a lunch walk there so once again I'm the lower layer thank you so much yeah [Music] you