Economics Assignment Indonesia

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INTRODUCTION Indonesia plays major role in today’s economic as Indonesia is one of the countries with the biggest GDP with the 4th largest population in the world. Joining the member of G-20 major economies, Indonesia has successfully emerges as the largest economy in Southeast Asia, moreover, Indonesia also classified as a new industrialized country. Government plays substantial role through ownership of 141 state industries and enterprises, and administration of prices of basic goods such as rice, fuel, and electricity. Main goods to export from Indonesia are oil & gases, rubber, cement, plywood and food. In addition, Indonesia main export partners are Japan, China, and Singapore. PRODUCTION OUTPUT PERFORMANCE ANALYSIS Gross Domestic…show more content…
The consumption of fuel has soared as more Indonesian could afford to buy cars and motorcycles. While preparing incentives to stimulate national industries by banning exports of raw materials in the mining industry by 2014, Indonesian government also grant tax holidays for specific innovative industries. This regulation forces manufacturers to build smelters and processing facilities to produce value-added products. LABOR MARKET ANALYSIS Unemployment is a waste because it should be count as a loss all the goods and services those unemployed workers could have produced if they had been working (McConnell, Brue, & Flynn 2009). Unemployment is divided into three category; frictional which arises from labor turnover, structural which arises from technological advances, and cyclical which arises from economic recession (Parkin, 2010). The proportion of Indonesia unemployment declined gradually during the period shown. The graph reaches the peak at 11.24% in the middle of 2005 and the lowest was shown in 2013 with 5,4%. Indonesia has been experiencing cyclical unemployment, a severe unemployment caused by economic or business cycle. In Indonesia, thanks to the impressive economic growth by ample investment from outside the country, Indonesia has escaped the highest level of unemployment and attempt to reduce unemployment looked successful. Things start to change from 2013. As the Federal Reserve announced the
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