A True Success Story for This Country’s Overall Growth

Over the last 20 years, Indonesia has experienced impressive economic and political growth. The country has not only caught up to richer ones and finds itself now in the middle-income category, but it has also become one of the most democratic in Southeast Asia.

Since the fall of the dictator Suharto in 1998, the country has had four peaceful transitions of power. Minority rights have improved over time. Eventhough 87% of the population is Muslim, the country is generally looked upon as a model for peaceful Islam.

In the 1960s, the country went through an industrialization phase to promote rapid economic growth. By the 1980s, Indonesia was a powerhouse in its arc of industrialization via clothes, fabrics, and electronic assembly. Over time, it went through a deindustrialization phase, transitioning into logging and mining. Since 1990, its per capita GDP experienced an increase of 160 percent, with an average income of $11,000. The change in Indonesia’s development model happened quite smoothly, partly due to the government’s investment in infrastructure and education, the stabilization of the macroeconomy, and the promotion of free trade and entrepreneurship back in the 1960s when the country was establishing its initial development model. The country now plans to convert back to its manufacturing heyday of the 1980s and 1990s should it put into action policy suggestions made by the Asian Development Bank and Indonesia’s National Development Planning Agency meant to revive the manufacturing sector.