Case 1 Analysis: Indonesia – Asia’s Stumbling Giant
Case 1 Analysis: Indonesia – Asia’s Stumbling Giant
Case 1 Analysis: Indonesia – Asia’s Stumbling Giant
Indonesia as a Country
Indonesia is a country within Asia populated with nearly 220 million people. It has a strategic location astride major sea lanes and is an archipelago of 17,508 islands (globalEDGE, 2013). It is also deemed the world’s most Muslim nation where nearly 85% of the population consider themselves Muslim; while still remaining one of the most ethnically diverse countries. Indonesia is known for its natural resources such as: mining, oil and gas production, and forestry (Hill, 2013). From a political standpoint, Indonesia has a mixed economic system in which the economy includes a variety of private freedom, combined with centralized economic planning and government regulation (globalEDGE, 2013).
Indonesia’s Central Issues Indonesia has experienced many political, economic and environmental disasters. Although economic growth was prevalent prior to 1997, the actions of the historical dictator Suharto influenced the beginning of the downward spiral of the country. The country accumulated major debt by what is referred to as “crony capitalism” as Suharto used his command of the political system to favor the business enterprises of his supporters and family (Hill, 2013). As a result the current economic front, while it has gotten better, Indonesia still lags behind its Southeast Asian neighbors. Other central issues that stem from the foundation of economic destruction are: poor infrastructure, high unemployment, slow growth in labor productivity, significant foreign capital has left the country, decline in public, private and foreign investment, endemically high level of corruption, and business activity is delayed significantly by “red tape” or greater scrutinized processing procedures. While there are numerous issues that are occurring throughout Indonesia, all require attention in order to help stabilize the country.
Case 1 Analysis: Indonesia – Asia’s Stumbling Giant
Indonesia as a Country
Indonesia is a country within Asia populated with nearly 220 million people. It has a strategic location astride major sea lanes and is an archipelago of 17,508 islands (globalEDGE, 2013). It is also deemed the world’s most Muslim nation where nearly 85% of the population consider themselves Muslim; while still remaining one of the most ethnically diverse countries. Indonesia is known for its natural resources such as: mining, oil and gas production, and forestry (Hill, 2013). From a political standpoint, Indonesia has a mixed economic system in which the economy includes a variety of private freedom, combined with centralized economic planning and government regulation (globalEDGE, 2013).
Indonesia’s Central Issues Indonesia has experienced many political, economic and environmental disasters. Although economic growth was prevalent prior to 1997, the actions of the historical dictator Suharto influenced the beginning of the downward spiral of the country. The country accumulated major debt by what is referred to as “crony capitalism” as Suharto used his command of the political system to favor the business enterprises of his supporters and family (Hill, 2013). As a result the current economic front, while it has gotten better, Indonesia still lags behind its Southeast Asian neighbors. Other central issues that stem from the foundation of economic destruction are: poor infrastructure, high unemployment, slow growth in labor productivity, significant foreign capital has left the country, decline in public, private and foreign investment, endemically high level of corruption, and business activity is delayed significantly by “red tape” or greater scrutinized processing procedures. While there are numerous issues that are occurring throughout Indonesia, all require attention in order to help stabilize the country.
References: Gelbard, R. (2000). U.S. and Indonesia: Common Goals. The New York Times. Retrieved on January 12, 2014 from http://www.nytimes.com/2000/11/20/opinion/20iht-edgelbard.2.t.html globalEdge. (2014). Retrieved on January 9, 2014 from http://globaledge.msu.edu/ Higgins, B. Howard. (1957). Indonesia 's economic stabilization and development. New York: Institute of Pacific Relations. Hill, C. (2013). International business: Competing in the Global Marketplace. New York: McGraw-Hill/Irwin. Quah, Jon S. T (2011). Curbing corruption in Asian countries: an impossible dream?. Bingley, UK: Emerald Group.