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AbstractHistory shows that trade and industrialization were the keys to economic development in East Asia and Southeast Asia. But situations change. The current rise in economic nationalism leads one to ask: Can Southeast Asian nations, including Indonesia, still use the old recipe of open trade and industrialization? Does economic cooperation still have a place? Against the backdrop of a changing trade environment and creeping protectionism under the Donald Trump US administration and amid lackluster global growth, the question that we must ask is, what can Indonesia and other Southeast Asian nations do given these conditions? This essay will specifically examine how the Asian Infrastructure Investment Bank (AIIB) can play a role in this situation. This essay argues that to overcome the anti‐globalization sentiment, it is necessary to create regional cooperation success stories from policies that are politically feasible and economically sound. There are several candidates for such success stories, including using the ASEAN Infrastructure Fund to develop ASEAN connectivity. The AIIB together with the ADB can play an important role here.

AbstractThe impossible trinity suggests that an economy cannot simultaneously achieve a fixed exchange rate, high capital mobility, and independent monetary policy without abandoning one of these. However, This paper looks at Indonesia's experiences from the 2009 QE and the 2013 taper tantrum, considering why Indonesian policy-makers were unable to use policies as per the trilemma, and the policy implications of this. There are three possible reasons why Indonesia found it difficult to implement this trilemma policy choice: differing monetary policy objectives, volatile floating exchange rates, and balance sheet effects. The commodity supercycle also plays an exogenous role, unable to be overcome by monetary or exchange rate policy while at the same time impacting fiscal policy, income redistribution, trade balance, and the exchange rate. Overall, this paper argues that monetary policy on its own is likely to be insufficient to manage the economy adequately. Other levers and factors, such as macroprudential policy, fiscal policy, capital flow management, and institutional quality, are critical to make the policy choices more effective.

This book assesses the impacts of COVID-19 on the Indonesian economy, particularly on employment, education, poverty, trade, and macroeconomy. The chapters explain how fiscal and monetary stimulus work and the roles of local governments in managing stimulus. It also presents paths to recovery and lessons learned from countries that have found success in mitigating the economic impacts of the pandemic (China, Germany, Singapore, and Vietnam). This text will be a useful reference for policy makers, scholars, students, and public audience working or interested in the fields of development economics, trade, health economics, economics, and East Asia.

This book assesses the impacts of COVID-19 on the Indonesian economy, particularly on employment, education, poverty, trade, and macro economy. The book explains how fiscal and monetary stimulus work and the roles of local governments in managing stimulus. It also presents ways to recovery and lessons learnt from countries that have found success in mitigating the economic impacts of the pandemic (China, Germany, Singapore, and Vietnam). This book will be a useful reference for policy makers, scholars, students, and public audience working or having interest in the fields of development economics, trade, health economics, economics, and East Asia.

Globalisation is more complex than ever. The effects of the global financial crisis and increased inequality have spurred anti-globalisation sentiment in many countries and encouraged the adoption of populist and inward-looking policies. This has led to some surprising results: Duterte, Brexit and Trump, to name a few. In Indonesia, the disappointment with globalisation has led to rising protectionism, a rejection of foreign interference in the name of nationalism, and economic policies dominated by calls for self-sufficiency. Meanwhile, human trafficking and the abuse of migrant workers show the dark side of globalisation. In this volume, leading experts explore key issues around globalisation, nationalism and sovereignty in Indonesia. Topics include the history of Indonesia's engagement with the world, Indonesia's stance on the South China Sea and the re-emergence of nationalism. The book also examines the impact of globalisation on poverty and inequality, labour markets and people, especially women.

We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into "medium taxpayer offices," with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining nonlinear changes to corporate income tax rates, we estimate an elasticity of taxable income of 0.579. Combining these estimates, improved tax administration is equivalent to raising top rates on all firms by 8 percentage points. On net, improved tax administration can have significant returns for developing countries. (JEL H25, H26, K34, O17)

This book examines Indonesia's business environment since reformasi began in 1985 -- what stayed the same, what changed, and would could change. Economic recovery has been hesitant. Regime change and political reform have created uncertainties that have deepened reluctance to invest. A raft of government-instigated changes have left their imprint: decentralization, privatization, new company legislation, anti-corruption efforts, nationalization of debt-ridden banks, and firms being forced into receivership. More cautious lending practices by remaining financial institutions have imposed a credit crunch. Increased worker militancy and minimum wage rises have led some international firms to reconsider their presence in Indonesia. Changes in the business environment have caused a redefinition of private enterprise-government relations, inducing firms to re-examine their organization and management. The book includes insights of distinguished and stimulating speakers from business, independent research organizations, and academic institutions in Indonesia, Australia and elsewhere