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By any indicator, Indonesia, the fourth most populous nation on earth, is a development success story. Yet 20 years after a deep economic and political crisis, it is still in some respects an economy in transition. The country recovered from the 1997-98 crisis and navigated the path from authoritarian to democratic rule surprisingly quickly and smoothly. It survived the 2008-09 global financial crisis and the end of the China-driven commodity super boom in 2014 with little difficulty. It is now embarking on its fifth round of credible national elections in the democratic era. It is in the process of graduating to the upper middle-income ranks. But, as the 25 contributors to this comprehensive and compelling volume document, Indonesia also faces many daunting challenges -- how to achieve faster economic growth along with more attention to environment sustainability, how to achieve more equitable development outcomes, how to develop and nurture stronger institutional foundations, and much else.

For Indonesia, which is keen to accelerate its infrastructure development, Belt and Road Initiative (BRI) is seen as an opportunity to tap into China's huge financial resources and technological capability. There has however been no concrete BRI project agreed to between China and Indonesia so far. While China considers all projects, including infrastructure projects and economic interactions as part of BRI, Indonesia only considers those infrastructure projects initiated during the Xi Jinping period as BRI projects. Indonesia has offered several broad areas for cooperation under the BRI framework and carefully selected project locations to minimize political risk for the Joko Widodo government. But no agreements have been signed yet as China requires detailed project proposals from Indonesia, which it has apparently not received. What appears to hamper progress are four key issues: the perception of China's economic domination, the ethnic Chinese issue, the Natuna issue, and the mainland Chinese workers issue.

The relationship between the performance of Special Economic Zones (SEZs) and their governance is an under-researched topic. Despite their popularity as a development policy tool in developing countries, many SEZs fail to achieve their intended goals. A key factor determining the success of SEZs is their governance set-up. This article examines the designs and practices of governance in three SEZs in Indonesia—two tourism-oriented SEZs and one industry-oriented SEZ. Exploring the gap between the theoretical concept of "good governance" and the actual governance practices in SEZ development and operation, the article finds that current governance designs and practices neglect the importance of local contexts, which in turn results in suboptimal outcomes. We therefore suggest that the designs and practices for SEZ governance should be adjusted to reflect local socio-economic, cultural and political conditions. In other words, successful SEZ models should be based on a governance framework that needs to be both "good" and "proper". (Contemp Southeast Asia/GIGA)

AbstractDespite Indonesia's impressive economic growth, it still lags behind other countries with a similar income level in terms of the quality of its human capital. This paper argues that one key factor explaining this low quality of human capital relates to the lack of focus and clear strategies to develop its education system. This paper attempts to assess Indonesia's current state of human capital development with particular focus on its education sector. In order to benefit from its demographic bonus, Indonesia needs to to improve its current education and skill training system. Better education and skill training system will support the country's effort to reduce poverty and youth unemployment. The effectiveness of public spending in education should be improved to raise the quality of education. Indonesia needs to integrate its human capital development plan with its economic master plan.Keywords: Human Capital; Poverty; Unemployment; Education; DevelopmentAbstrakMeskipun mencatatkan pertumbuhan ekonomi yang mengagumkan, kualitas sumber daya manusia Indonesia masih tertinggal dibandingkan negara lain dengan tingkat penghasilan setara. Tulisan ini berpendapat bahwa faktor kunci yang menjelaskan rendahnya kualitas sumber daya manusia berhubungan dengan ketiadaan strategi yang terfokus dan jelas untuk mengembangkan sistem pendidikan Indonesia. Tulisan ini menilai kondisi kekinian dari pengembangan sumber daya manusia Indonesia dengan fokus khusus pada sektor pendidikan. Agar dapat mengoptimalkan manfaat dari bonus demografi, Indonesia perlu membenahi sistem pendidikan dan pelatihan keterampilan. Sistem pendidikan dan pelatihan keterampilan yang lebih baik akan menunjang upaya pengentasan kemiskinan dan pengurangan pengangguran muda. Efektivitas pengeluaran pemerintah di sektor pendidikan perlu ditingkatkan guna meningkatkan kualitas pendidikan. Indonesia perlu mengintegrasikan rencana pembangunan sumber daya manusia dengan master plan perekonomian.Kata kunci: Sumber Daya Manusia; Kemiskinan; Pengangguran; Pendidikan; PembangunanJEL classifications: I25; O15

This paper reviews some major works of Thee Kian Wie, one of Indonesia's most distinguished economic historians, that spans from the Colonial period until the post-New Order period. His works emphasize that economic history can guide future economic policy. Current problems in Indonesia were resulted from past policy failures. Indonesia needs to consistently embark on open economic policies, free itself from "colonial period mentality". Investment should be made in rebuilding crumbling infrastructure, improving the quality of health and education services, and addressing poor law enforcement. If current corruption persists, Indonesia could not hope to become a dynamic and prosperous country.

"Islam in the Malay world of Southeast Asia or Islam Nusantara, as it has come to be known, had for a long time been seen as representing the more spiritual and Sufi dimension of Islam, thereby striking a balance between the exoteric and the esoteric. This image of 'the smiling face of Islam' has been disturbed during the last decades with increasing calls for the implementation of Shari'ah, conceived of in a narrow manner, intolerant discourse against non-Muslim communities, and hate speech against minority Muslims such as the Shi'ites. There has also been what some have referred to as the Salafization of Sunni Muslims in the region. The chapters of this volume are written by scholars and activists from the region who are very perceptive of such trends in Malay world Islam and promise to improve our understanding of developments that are sometimes difficult to grapple with." — Professor Syed Farid Alatas, Department of Sociology, Faculty of Arts and Social Sciences, National University of Singapore "Perceptions of Southeast Asian Islam are increasingly contested. On the one hand, much of the international community continues to laud the region's Muslims as among the most 'moderate' and 'inclusive' in the world. On the other hand, stories about creeping Wahhabism and escalating jihadist threats abound in media reporting, often accompanied by commentary that the nature of Southeast Asian Islam is becoming more radical, less tolerant and more 'Arabized'. In this volume, a range of Muslim scholars and activists from Indonesia, Malaysia and Singapore reflect upon developments in their communities and seek to bring greater nuance to our understanding of these complex religio-cultural and political changes. This book opens up authentic regional perspectives on Islam's contemporary role." — Assoc Professor Greg Fealy, Department of Political and Social Change, Australian National University

This study empirically examines how a reduction in input tariffs changes firms' choices between domestic and foreign inputs. In order to do so, we employ Indonesian manufacturing surveys from 2002 to 2010 and compute the share of imported inputs among total inputs at the firm‐product level. With this dataset, we examine the effect of preferential tariffs for ASEAN countries—that is, ASEAN Free Trade Area (AFTA) tariffs. Our findings can be summarized as follows: First, we found that a reduction in AFTA tariffs in Indonesia encouraged plants to raise their share of foreign inputs. Second, such an effect of AFTA tariffs was observed only for indigenous plants, or those whose primary sales market is the domestic market. Third, we found that the more productive plants experienced a greater impact of AFTA tariffs on foreign inputs. In short, the reduction in AFTA tariffs encouraged input reallocation, at least in some specific firms in Indonesia.

ISEAS - Yusof Ishak Institute has commissioned a second nationwide survey in Indonesia as a follow-up to the first similar project in 2017 called the Indonesia National Survey Project (INSP). Its broad aim is to enhance understanding of political, economic, and social developments in Indonesia.

The ISEAS - Yusof Ishak Institute commissioned a nationwide survey in Indonesia, called the Indonesia National Survey Project (INSP) to enhance understanding of economic, social, and political developments in Indonesia. President Joko Widodo's approval rating hovers at around 68 per cent, and respondents generally think that the President has made improvements to the economy, although there are concerns with the price of necessities and job-seeking prospects. The Widodo administration scores well in infrastructure development, which is its signature policy thrust. Roads, education and electricity supply remain the top priorities for respondents, while corruption is still considered the most important problem facing Indonesia today. Some key issues that have emerged during the Jakarta gubernatorial election, such as punishing blasphemy against Islam and voting a Muslim leader into office, receive significantly high support from respondents, suggesting that these issues have currency beyond Jakarta and the election. On the political front, state institutions, especially the Army, are more highly trusted than politicians. Key elements of Indonesia's political infrastructure, such as democracy, Pancasila, and decentralization are supported by an overwhelming majority of respondents. Indonesians identify strongly with Indonesia and consider traditional economic partners such as Malaysia, Japan, Singapore and ASEAN to be most important for Indonesia.

Introduction: Access to electricity and welfare -- Potential of energy resources in east nusa tenggara -- political economy of geothermal utilization: Cultivating the potential of ulumbu for welfare improvement -- Electricity access and community welfare: a case study of Satarmese-NTT -- Agenda for development of rural electrification.