Lunch Lecture - Hal Hill: Half a Century of Economic Development in Southeast Asia's Emerging Giant: Continuity and Change in Indonesia

Indonesia was characterized as the ‘chronic economic dropout’ according to the most widely used development economics textbook in the 1960s. However, since the late 1960s it has grown rapidly, such that most comparative assessments judge it to be among a small group of (mainly East Asian) economies to have achieved historically unprecedented growth rates. Over the past half century Indonesia has also experienced a deep economic and political crisis, including a temporary growth collapse of about 20 percentage points and a rapid transition from centralized, authoritarian rule to decentralized, democratic rule. Thus there are two main development episodes over this period, 1966-97 and 1999 to the present, with very different political and institutional arrangements between the two. This paper examines these two episodes, investigating in particular the continuities and differences, and asking whether the abrupt transition to democracy introduced a discontinuity in economic outcomes. The analysis is undertaken with reference to a range of socio-economic indicators, including growth dynamics, economic resilience, macroeconomic policies, openness to the global economy and distributional outcomes. These outcomes are then linked to the prevailing political economy processes of the two periods. The conclusion, perhaps surprising, is that, comparing these two episodes, the continuities are more important than the differences.

Programme FRIAS Lunch Lectures, Summer Term 2015