Category Archives: Indonesia

Service-sector reforms enhance manufacturing productivity: Evidence from Indonesia

Here’s a short piece on voxeu.org presenting research from a recent paper prepared by my co-authors and I.

Study: Liberalizing Foreign Investment in Services Boosts Manufacturing in Indonesia

Here is a post on the World Bank’s ‘The Trade Post’ blog written by Gonzalo Varela, Sjamsu Rahardja and myself on our recent working paper.

Economic Premise: Service Sector Reform and Manufacturing Productivity

On foot of a recently published Policy Research Working Paper, exploring the potential for reforms to Indonesian service sector FDI policy to drive productivity in downstream manufacturing sectors, my co-authors and I have prepared a – much more digestible! – Economic Premise note for the World Bank’s Poverty Reduction and Economic Management Network. Published today, and available here.

Service Sector Reform and Manufacturing Productivity: Evidence from Indonesia

WorldBank_logoFor the past six months, I have been working with the World Bank in both Indonesia and in the US. In particular, I have been looking at the impact of changes to service sector FDI policies on productivity in downstream manufacturing sectors. Today, the fruits of these labours were published as a World Bank Policy Research Working Paper, co-authored with two of my colleagues from the Jakarta office. Continue reading

Picking up the Pace – Renaissance in Indonesian Manufacturing

While working with the World Bank over the summer, I contributed to this in-depth report on the state of Indonesia’s manufacturing sector, which has just been published.

Having never fully recovered its dynamism after the Asian financial crisis, now is the ideal moment for Indonesia’s manufacturing sector to recapture its former glory. With recent improvements and a favorable outlook, the sector may be on the verge of a renaissance if critical competitiveness challenges can be overcome. Continue reading

Indonesia Rising

After the trauma of the 1997-98 Asian financial crisis, Indonesia has come roaring back, growth averaging over 6% in recent years even as the world struggles with the first financial crisis of the 21st century, and the deepest since the 1930s.

If the developed world remains wracked by ‘slowing pains’, many of Indonesia’s economic challenges can be classed as ‘growing pains’.

Creaking infrastructure, for instance, results from under-investment, but the problem is rendered far more acute by the capacity strains that come with break-kneck economic growth. Roads may be of insufficient number and quality, but the trebling of road traffic over the past decade is the real source of bottlenecks.

Policymakers aim to help the economy kick on to reach its full potential, with growth in the 7-8% range which would see Indonesia become one of the world’s top ten economies by 2025.

While Indonesia’s large domestic market and burgeoning middle class shield the economy to a certain extent from ongoing economic weakness and uncertainty in the developed world, so-called ‘decoupling’ has been proven a mirage for emerging markets. Indonesia is no different. The combination of slowing growth in China and stagnation in developed export markets are two challenges on the immediate horizon.

Economic transition in China, however, brings its own opportunities. Increasingly, rising wages in China mean Indonesia is being sought out as a low cost production hub. Increased domestic demand in China means a massive, growing export market on Indonesia’s doorstep.

During my time working with the World Bank in Indonesia, I made a modest contribution to the latest Indonesian Economic Quarterly.

These are its top five take-aways: Continue reading