Table of Contents
Introduction
Production Output Performance Analysis
Labour Market Analysis
Price Level Analysis
Conlusion
References
Indonesia is the biggest country in South-East Asia. Satellite Imaging Analysis shows that Indonesia has a coastline of 108,920 kilometers and 20,731 square kilometers of reefs consists of 18,307 islands. Indonesia is the fourth most populous nation in the world with 253,899,536 population differs to 4 major ethnic groups. Indonesia is the world’s 10th of purchasing power equivalence (Rumney, 2010).
Current data shows that out of a 254 million population, more than 28 million Indonesian live below the poverty line and approximately half of total household living around the national poverty line at $24.4 per month (Giggacher, 2015). In terms of employment, the growth is slower than population growth. Public services is still inadequate by middle income standards. Also, Indonesia’s development in health and infrastructure related indicators is remain poor.
During the years of 1965 and 1997 Indonesia perform a great number in generating GDP with average annual rate of almost 7% (Kasenda, n.d). This achievement is leveling up Indonesia income to the lower-middle income countries, leaving the lower income country level. However, in 1998, the Asian Financial Crisis and national riot caused decline in gross domestic product (GDP) of 13.6% and growth of 0.3%.
Gross domestic product (GDP) is nation’s total income and the total expenditure on its output of goods and services measured with set of current prices (Mankiw, 2013). However, since GDP is calculated using current prices, GDP gives bias result as the increase in GDP is caused either by rise in prices or rise in quantities produced.
Real gross domestic product is the value of goods and services measured using a constant set of prices (Mankiw, 2013). Real GDP eliminate inflation effect. The compared data between Gross domestic product and real GDP is stated as GDP deflator which can be used to estimate the inflation rate of a nation. However, real GDP is not perfect tools to measures economic welfare due to neglect quality improvement, household production, underground/illegal activity, health and life expectancy, leisure time, environmental damage, political freedom and social justice. Thus, real GDP can be used to compare welfare in one country with that in another or can be used as percentage to measure the economy growth of a nation.
Economic growth is the increase in the market value of goods and service produced eliminate inflation effect. Due to sing GDP data cannot be used to measure growth, the data itself need to be converted as percent rate to show how much a economy nation XXXX XXXXXXXX XX XXXXXXXX XXXX. This XX often called as XXX growth.
XXXXXXX XXXXXXXXX ratio to XXXXXXX XXXXXXX XX real XXX XXX XXXXXX (XXX, XXXX). Real GDP per XXXXXX XX XXXXXXXXXX XX XXXXXXXX real GDP with XXX number XX XXXXXXXXXX XX a XXXXXX. XXXX XXX XXX XXXXXX XX a tool XX measure XXXXXXX XX life XXXXX increase in welfare XXX shown with a XXXXXX GDP per capita, XX least XX $15,XXX XXX person (XXX Cato Institute, XXXX).
XXXXXXXXX XXX is calculated XXXX XXXXXXXXXX approach and XXXXXXXXXXX approach. Income approach is remain XXXXXXXXXX XX XXXXX due XX big XXXXXXX of unknown individual XXXXXXX. XX calculating XXX XXX XXXXXXXXXX XXXXXXXX, Indonesia sum XX whole XXXXXX XX X production sectors which XXXXXXX to agricultural XXXXXX, XXXXXXXX sector, mining XXXXXX XXX X XXXXXXX XXXXX XXXXXXX. As stated in XXXXXXXXX XXXXXX XX Statistic, XXX is calculated XXXXXXXXX XXX XXXXXX XX sum up government XXXXXXXXXXX, establish XXXXX fixed XXXXXXX, inventory, and XXXXXXXXXXX export and XXXXXX XXX the sum it XX XXXX XXXXXXXXX XXXXXXXX XXXXXXXXXXX and XXXXXXX XXXXXXXXXX. XXX real XXX XX XXXXXXXXXX XXXXX XXXX XXXXX XX XXXXXXXX. (XXX Indonesia, XXXX)
XX shown in XXXXX 1 Between XXX years XXXX and 2013 XXX XXXXXXXXX XXXXXXX steadily grew at 6% average annual XXXX XXXX XXX exception of XXXX and XXXX XXXX, United XXXXXX of XXXXXXX XXXXXX bubble effect in real property, XXXXXXXXX’s GDP XXXXXX fell to 4.X% XXX 5.58% respectively.
XXXXX 1
XXXXXXXXX GDP, Real XXX, XXX Growth and XXX per Capita
Year
GDP (XXXXXXX XX$)
XXX (XXXXXXXX XXXX US$)
GDP XXXXXX (annual %)
GDP per capita (constant 2005 US$)
2004
256,836,883,XXX
270,471,818,103
-
X,XXX
XXXX
XXX,XXX,619,206
X.XX
X,273
2006
364,570,XXX,XXX
XXX,XXX,114,117
5.50
1,XXX
XXX,216,737,XXX
320,730,327,XXX
X,389
510,XXX,XXX,992
340,XXX,XXX,955
X,452
539,XXX,085,612
XXX,XXX,098,XXX
4.63
755,094,XXX,595
XXX,XXX,901,817
X.22
X,570
XXX,969,XXX,XXX
401,214,448,XXX
1,646
2012
917,869,XXX,365
425,XXX,XXX,059
6.XX
2013
XXX,XXX,XXX,099
449,XXX,XXX,XXX
X,798
XXXX: Adapted from XXXXX Bank Database. XXXXXXXXX 2015 by XXXXX Bank
XXXX, as shown in Table X, the XXXXXXX GDP shows significant XXXXXX, the XXXX XXX XXXXXX remain in static XXXXX. XXXXX XX XXXXXXXXXX XXXX this XXXXXX of growth XX not accompanied XXXX XXX management of other XXXXXXXXXXXXX indicators XXXXX could potentially reduce XXX XXXXXX of economic growth (such XX inflation, XXXXXXX XX payments XXXXXXX) XXX XXXX, the impact XX trickle-XXXX XXXXXX XX XXXXXXXX growth XXXX XXX necessarily provide a XXXXXX positive effect XX reducing XXXXXXXXXXXX XXX XXXXXXX.
XXXXXXXXX GDP XXX XXXXXX is XXXXXXXXXX to grow higher. XXXXXXX, XXX XXXXXXXXXXXX is XXXXXX a big XXXXXXXX. Due to Indonesian XXXXXXX XX XXXXXXXXX, the XXX XXXXX XXX rich and XXX poor is a XXXX spread.
XX measure XXX XXXXXXXXX’s XXXXXXX performance XXXXX is a XXXX to compare XXX and XXXX XXX in XXXXXX XXXXXXXXXXX. This can be XXXXXXXX by XXXXXXXXX Indonesia XXXXXXXXXXX XXXX XXX XXXXXX XXXXXX (USA) XXX China XX XXXXXXXXX in XXXXXXXX power (XXX table 2).
XXXXX 2
XXXX XXX XXX Capita Comparison XXX XXXX XXX XXXXXX Comparison
Real GDP XXXXXX (%)
XXXX XXX XXX Capita (USD)
2010
2011
United XXXXXX
X.9
XX,XXX
44,325
45,009
X.5
X.8
1.X
XXXXX
XX.X
2,XXX
3,XXX
X,378
9.2
7.X
X.X
XXXXXXXXX
6.1
1,798
6.5
6.2
5.X
Note: Adapted from World Bank Data. Copyright 2015 by XXXXX Bank.
At XXXXXX to the XXXX XXXXX, XXXXXXXXX GDP per capita XX XXXXX in growth XX compared XX XX XXX XXXXX. XXXXXX on the XXXXX Bank XXXX, Indonesia XXX one of the XXXXXX per XXXXXX GDP in the XXXXX. Indonesian XXX per capita has XXXX XXXXXX steadily between 2004 XXX XXXX. However, XXX XXXXXXXX XX XXXXXXXXXX is still XXXXXX below XXXXXXX line. XXXX is caused XX the growth of XXX per XXXXXX is XXX reflect XXX XXXXXX XXXXXXXXX. XXX existence of XXX XXXXXXX XXXXXXX and reality can be seen XX comparing XXX XXXXXX XX 43,XXX XXXXXXX XXXXXXXXXX XXXXX contributed XXXXX 25% XX XXXXXXXXX’s GDP (The XXXXX Bank, 2015), 10.3% of GDP is XXXXXXXXXXX XX XX XXXXXXX Indonesian which equal to which XXX XXXXXX XX XX XXXXXXX XXXXXXX XXXXXXXXXXX.
XXX unemployment rate XX the percentage of those XXX would XXXX XX work but XXX’t XXXX jobs. XX shown in XXXXX X, XXXXXXXXX’s XXXXXXXXXXXX XXXXXXX 2004 and XXXX XXXXX XX a downward trend in steady XXXXXXXXXX, XXXXXXXXXX, female XXXXXXXXXXXX. XXXXXXX, XXXXXXX to XXXX XXXXXXXXX, XXXXXX XXXXXXXX is XXXXXX a XXXXX issue. Although, XXX government XXX created adequate XXXXXX in education and XXXXXX areas, XXXXX XXXXXXXXXXXXX XXX still XXXX weighted to XXXX in XXX XXXXXXXX sector
XXXXX 3
Indonesia XXXXXXXXXXXX Rate
2005
2008
XXXXXXXXXXXX, total (% of total XXXXX force)
10
XX
X
8
Unemployment, XXXX (% labor XXXXX)
9
..
6
Unemployment, XXXXXX (% of XXXXX XXXXX)
14
13
Note: Adapted from World Bank Data. Copyright 2015 by World XXXX.
XXXXXX (XXXX) XXXXXXXX XXXX XXXXXXXXX XXXXX are X main category XX unemployment which XXX:
Unemployment that does not XX XXXX XX XXX own XXXX in the XXXX XXX
XXXXXX to the year-to-year XXXXXXXXXXXX in XXXXXXXXXXXX XXXXXX XXX natural XXXX
XX XXXXXXXXX, the XXXXXXXXXXXX rate measured XX calculating XXXXXX of XXXXXX actively looking for a job as a percentage XX the XXXXX force. The data is XXXXXXXXX XX XXXXX XXXXXX for XXXXX 6,000 persons XXX XXXX province (XXX Indonesia, 2015)
XXXXXXXXX’s Bureau XX XXXXXXXXX stated XXXX Indonesia’s unemployment can XX categorized XX both of XXX XXXXXXXX stated XXXXX but XXX XXXXXXXX of unemployment is categorized as XXXXXXXXXX XXXXXXXXXXXX (XXXXXXXXX, Suryahadi XXX Sumarto, 2005). XXXXXXXXXX XXXXXXXXXXXX is unemployment XXXXXX XX XXXXXX XXX gives XX XX looking for a job XXXXX try XX looking for a XXX. XXXX is XXX XX XXXX XX assumption that there XX a gap between XXXXX XXXXX and working XXXXX available for them. University fresh graduated, XXXX XXXXXXX XXX secondary schools have difficulties XXXXXXX XXX. Almost XXXX XX Indonesia"s XXXXX XXXXXX of XXXXXXX are XXXXXXXXXX, XXXXXXXXX XXX inexperienced.
XXXXXXXXXX XXXXXX try XX XXXXX XXXX XXXXXXX XX implementing The XXXXXXXXXX for Acceleration and XXXXXXXXX XX Indonesia’s XXXXXXXX Development (XXXXXXXXXXX XX XXXXX) (XXXXXXXX, 2011).
XXX XXXXXXXXXX XXX level XX Indonesia"s inflation rate XXXX XXXX in XXXX XXXXX in last XX XXXXX. XXXXXXX, XXXXXXXX to XXXXXXX country, XXXXXXXXX’s CPI XX higher than in XXXX XXXXXXXXXX XXXXXXX. XXXXXX XXX XXXXXX 2004 to XXXX, XXXXXXXXX reach XXXXXXX annual XXXXXXXXX rate of around X.5 XXXXX XXXXXXX developing country annual inflation XXXX is only X -5 % (XXXXX XXXX, XXXX)
Graph 1
XXXXXXXXX, Consumer XXXXXX (XXXXXX %)
XXXX: XXXXXXX from World Data XXXX. Copyright 2015 by XXXXX Bank.
XXXXXX (XXXX) XXXXXX that XXX XXXX cause XX XXXXXXXXX are XXXXXX XXXXXXXXXXX in aggregate XXXXXX or XXXX XXXX XXXXXXX (XXXXXX side XXXXXXX) XXXXX XXX be XXXXXXXXXXX XX:
XX XXX economy is at or close XX full employment then an increase in aggregate demand XXXXX to an XXXXXXXX in XXX price XXXXX. XX firms XXXXX XXXX XXXXXXXX, they respond XX XXXXXXX XX XXXXXX, leading to inflation. Also, near XXXX employment, XXXXXXX can XXX XXXXXX wages which XXXXXXXXX their spending XXXXX.
Aggregate XXXXXX XXX increase due XX an XXXXXXXX in XXX XX its XXXXXXXXXX XXXXX are: consumption, XXXXXXXXXX expenditure XXX investment, XXXXXXXXXXXXX trading.
XX XXXXX is an increase in XXX costs XX firms, XXXX firms XXXX XXXX this XX XX XXXXXXXXX. There XXXX be a XXXXX to XXX XXXX in the XXXXXXXXX supply
XXXXXXXXX"s XXXXXXXXX rate XXXXXXXXXX XXXX XXX energy price adjustments, meaning that the XXXXXXXXX XXXXXXXXXX can be XXXXXXXXXXX XX XXXXXXXXX caused XX cost XXXX XXXXXXXXX. XXXXXX XXXXX XXX XXXXXXXX by XXX XXXXXXXXXX and do XXX float according to XXXXXX XXXXXXXXXX. This XXXXXXXXX XXX XXXXXXXXX XXX deficit XXXXXX XXXXXX XXXXXX and XXXXXX public expenditures. XXXX, retract XXXXXX XXXXXXXXX implies political XXXXXXX XX common XXXXXX arises XXXXXXXXX by inflationary burdens. XXXX condition causing inflationary shock XXXXX wider XXX poverty XXXX.
Indonesia"s XXXXXXXXX XXXX XX highly XXXXXXXXXX by XXX XXXXXXXX to XXXXXXX XXXXXX these XXXXXXXXX. XXX XXXXXXXXXXX XXXXX XXXXX XXX a XXXXXXX impact XXX XXXXX 1% XX the XXXX XX inflation.
XXX XX XXXXXXXXX"s inflation rate volatility, XXXXX XXX XXXXXX deviation between realities XXXX XXX annual XXXXXXXXX projections XX XXXX XXXXXXXXX. XXX consequence XX this XXXXXXXXXXX XX XXXX it creates economic XXXXX, XXXXXXXXX XXXXXXXXX XX using loan to operate XXX country. Such inflation rate will cause borrowing costs rises XXXX XXXXXXXX XX XXXXXXX XXXXXXXX XXXXXX XXXXX.
XXX lack of quantity and XXXXXXX of Indonesia"s infrastructure also XXX reason XX the rise in XXXXXXXX XXXXX. Indonesia’s XXXXXXXXX majority covered XX XXX XXXXX made connectivity increasing XXXXXXXXXXXXXX costs XXX services XXX XXXXXXXX.
This inflation XX the main problem that XXXXXX Indonesia’s XXXXXXX XXXXXXXXXXX. As stated XX XXXXXXXX XXXXX, XXXXXXXXX and unemployment is XXXXX XXXXXXX XX a developing XXXXXXX (Mankiw, 2013). When government XXXXXXXX their XXXXXX XX XXXXXXXX inflation rate, XXX unemployment XXXXXX will be XXXX XXX vice versa. XXXXXXXXXX XXXXXXX try XX solve XXXX XXXXXX by implement XXXX XXXXX XXXXXX XXXXXXXXX XXXXXX XXX import XXX, remove tax XXXXXXXXX XXXX XXXXX. Bank of Indonesia also XXX XX XXXXXXX the XXXXX XXXXXX and XXXXXX XX implementing XXXX Market XXXXXXXXX (XXXXXXXXXXX as OPT).
XXXXXX XXXX of XXXX and 2013, XXXXXXXXXX economy XXX a good performance. As the XXXXXXXX rise in real GDP XXXXXXXX by the decrease in unemployment rate. However, the XXXXXXXXX XXXX remain a problem, although government may reducing the unemployment XXXXX, the XXXXXXX XXXXX XX XXXXXX XXXX XXX XX XXXXXXXXX XXXX.
XXX XXXX problem XX Indonesia’s economy is the lack of infrastructure XXX XXXX loan XXXXX XXXXX causing XXXXXXX problems. The deficit budget XXXXXX should be XXXXXXX XX XXXXX XXX XXXXXXXX ASEAN Economic Community.
XXXXXXXXX resources is XXXXXXXX XXX XXX management is XXXXX lack of skillful XXXXX XXXXX. This is the XXXXXXXXX’s XXXXXXXXXX and society responsibility XX they want to XXXX the XXXXXXXXX XXXXX.
XXX XXXXXXXXX. (XXXX). XXXXXXXXX Tahun XXXXX PDB Berbasis XXX XXXX. XXXXXXX: XXX Indonesia.
Giggacher, X. (2015, May 14). XXXXXXXX the XXXX. XXXXXXXXX from XXX Mandala: http://asiapacific.anu.edu.au/XXXXXXXXXX/XXXX/05/XX/XXXXXXXX-XXX-cost/
XXX. (2012). Statistic on the Growth of XXX Global Gross XXXXXXXX Product (XXX) XXXX 2003 to XXXX. Retrieved from XXXXXXXXXXXXX XXXXXXXX XXXX: http://XXX.XXXXXXXX.XXX/XXXXXXXXXX/273951/XXXXXX-of-XXX-XXXXXX-XXXXX-domestic-product-gdp/
XXXXXXX, D. (n.d). XXX XXXXX XXXXXXXXXX XXXXXXXXX Stuck in X "Middle-XXXXXX XXXX" XXXXX From South Korea"s Economic Development XXXXXXXXXX? XXXXXXXXX from GDn: XXXX://XXX.gdn.XXX/XXXXX/XXXXXXX/XXXXXX/XXXXX/2nd%XXXXXXXXXXXXXXXXX%20Kasenda.XXX
XXXXXX, G. N. (2013). In XXXXXXXXXXXX XXX edition. New York: XXXXX Publication.
XXXXXX, T. A. (2010). XXX Geography of XXXXXXXXX XXXX: A Scholary XXXXXXXXXXXX XXX Guide. New XXXX: XXXXXXXXXX XXXXX of America.
Suryadama, D., XXXXXXXXX, X., &XXX; XXXXXXX, S. (XXXX). XXX XXXXXXXXXXX and Trends XX XXXXXXXXXXXX in Indonesia: The XXXXX XX Discouraged Workers. XXXXX, XXXXXXXXX XXX Informal Sector XXXXXXX Paper, 10.
The XXXX Institute. (2007). XX XXXXXXX of Happiness XXXXXXXX. Is it Reliable? XXXX Does It XXXXX XXX Policy? XX - XX.
The World Bank. (XXXX, XXXXX 17). Indonesia"s Economic Overview. XXXXXXXXX from The World XXXX: XXXX://XXX.XXXXXXXXX.org/en/XXXXXXX/indonesia/XXXXXXXX
XXX XXXXX Bank Group. (2015). XXXXX Development XXXXXXXXXX. XXXXXXXXX XXXX World Bank: XXXX://XXXXXXXX.worldbank.org/data/reports.aspx?XXXX=IDN&XXX;id=XXXXXXXX&XXXXXXXXXXX=Popular_countries&populartype=country&XXXXXXXXX=y