Executive Summary: The Macroeconomics Of Indonesia

Ashton Mason

Dr. Watson

Macroeconomics

November 13, 2014

The Macroeconomics of Indonesia When considering the world’s most prestigious economic systems, Indonesia would not likely come up as a top contender. But right now, Indonesia is 18th in the world for the largest economy. That is quite a jump then what most people, like myself, would have thought. And remarkably, they are still growing! “After the Asian Financial Crisis of the late 1990s halted a booming economy fostered by the Suharto government, Indonesian macroeconomic indicators started to come back on track in the mid-2000s.” (Indonesia Investments. “General Economic Outline of Indonesia” 2014) From the fate of the Asian Financial Crisis, the people and the government were able

Indonesia exports many things, but they have a few that have had the biggest impact on the government. In recent years there has been high demand for palm oil in China, India, and several other countries. Indonesia has great climates and the crop space for the needed palm trees to extract the oils. This in turn has made Indonesia the world leader in palm oil production. Along with the increases in net exports, the production of palm oil employs over 3 million people. According to the World Bank, “the main source of the palm oil revenue is the export tax.” In 2008 alone; “the Indonesian government earned at least 1 billion dollars in export tax.” (Obidzinski, Krystof. 2013) Coffee is considered a major export in many foreign countries. With the many possibilities of flavors and popular coffee chains, coffee has become a worldwide phenomenon and has been for many years. Indonesia has been producing coffee since the 17th century and it continues to play an important role in the growth of the country. “The subtropical and equatorial regions provide good conditions for coffee to be grown. Therefore, countries that dominate the world's coffee production are found in South America, Africa, and Southeast Asia.” (Indonesia Investments. “Coffee” 2014) Indonesia is third in the world for top production of coffee beans in 2013 and third in the world for top coffee bean exports in 2012. Indonesia exports several types of coffee beans with their most exported being the cheaper priced and one of the lower quality types; Robusta. However, the country is well known for exporting the most expensive and rarest coffee in the world; ‘kopi luwak.’ Kopi luwak sells for 15 dollars an ounce. And people say ‘Starbucks’ is expensive! “It is brewed from beans that have passed through the digestive system of the Asian palm civet (catlike animal). Due to this special fermentation process inside the animal, (and due to the fact