Economics Assignment Indonesia

The more Americans employed means we as a nation are experiencing economic growth. However, if there is a high unemployment rate this interprets that more Americans are struggling in our economy. There are several types and reason for high unemployment. Though America’s unemployment rate was 5.6%, as of December 2014, every state’s unemployment rate varies for different reasons. America’s unemployment rate has a direct negative impact on our entire nation’s economy and affects individual firms, organizations, and people.

Indonesia is a rich country with its resources. Not only oil and gas, but Indonesia also had been a producer of mining and agricultural products such as rubber, tin, tea, coffee, spices and timber. In 2002, timber is one of the key export for “non-migas” (non oil and gas) commodities to provide foreign trades.

Indonesia is now the 15th largest economy on the planet with a global output of just under 1.5% but is expected to rise in the coming years. Manufacturing is the largest single component of Indonesia’s economy with its main exports including crude petroleum and natural gas as well as rubber, coffee, cocoa and palm oil while Australia mostly benefits from exporting mineral fuels, gems, precious metals and meat. Indonesia received $187.3 billion USD from exports in 2012 ranking it 27th in profit from global exports but Australia placed 22nd and profited a total of $257.9 billion USD from its exports leaving Indonesia in the dust. Although Indonesia has showed significant growth recently their quality of life is still worse than Australia’s due to a lower Gross Domestic Product or GDP. GDP is the total value of goods produced and services provided within a country in the duration of a year and determines the strength of a countries currency.

Unemployment is one of the main financial complications in America today. Individuals who are measured as unemployed if the individuals is looking for work or laid off for more than a week. There are numerous diverse details why an individual could be jobless. Three of those causes are cyclical, structural and seasonal unemployment. The administration tries to find answers in order to decrease unemployment by making up guidelines.

According to AAFC (Agriculture and Agri-Food Canada, 2010) due to its extensive natural resources and geographical location, in the way of several of the world’s most important trading routes, Indonesia represents the Southeast Asia’s largest economy. On a global perspective, Indonesia is the fourth most populated country and has the largest Muslim population, besides being the world’s largest archipelago, with around 17,000 islands. The country’s GDP (Gross Domestic Product) is also showing considerable and stable growth throughout the years and unemployment rates dropped considerably (AAFC, 2011).

On the outstanding work “unemployment and job creation programs: is there a skills gap?” by Belinda Shipps and Robert L. Howard four types of unemployment are identified: Frictional, seasonal, structural, and cyclical. Frictional

Indonesia had a GDP of 868.3 billion international dollars (GDP of Indonesia, 2016) and a GDP per capita of 3,475.25 international dollars in 2013 (GDP per capita, Indonesia, 2016). The GDP is primarily used to indicate an economies performance, it is measured by Y = C + I + E + G, where Y = GDP, C = Consumer Spending, I = Investment made by industry, E = Excess of Exports over Imports, G = Government Spending (Birch T, 2016). The GDP per capita is calculated by the GDP of a country, divided by the population of a country. The GDP and GDP per capita are very vital indicators of an economies progress. A rise in GDP shows that there an increase of value in an economy or there is a higher income or rise in expenditure which implies that there is a rise in the standard of living of the citizens and due to rise in income there will be a higher spending on various goods and services like healthcare, education, etc. Therefore as Australia’s GDP is higher than Indonesia’s there is an indication of higher living

Since oil price and devex are two of the most crucial factors affecting NPV and GT, thus both factors will be used to explain Indonesia’s fiscal flexibility and neutrality in more detail.

Economic system is a system of beliefs (concerning work, property and wealth), activities (extractions, production and distribution), organizations(business firms, labour unions), and relationships(ownership, management) that provide the goods and services consumed by the members of a society.(Cullen 2011, p.81) The economic system is unique in that Indonesia has a market-based economy in which the government plays a significant role. There are 141 state-owned enterprises, and the government administers prices on several basic goods, including fuel, rice, and electricity. Growth rebounded in 2010 to 6.1% and is forecast to have reached 6.2%-6.5% in 2011. Poverty and unemployment have also declined despite the global financial crisis, with the poverty rate falling to 12,5% (March 2011) from 13.3% a year earlier and the unemployment rate falling to 6.6% (February 2011) from 6.8% a year earlier. In December 2011, Fitch Ratings upgraded Indonesia’s sovereign debt rating to investment grade. . There are many potential infrastructure projects in multiple sectors including hydroelectric and solar power, palm oil, new roads including toll motorways, mining, expansion of broadband internet, and

Cyclical unemployment is the most problematic due to the general decline of the gross domestic product which means the current economy is weak. Currently, in the United States, the household, business, and government sectors are buying fewer goods and services. This is causing a slowdown in the economy. As a result, there is will a significant increase on the cyclical unemployment.

Unemployment is a problem faced by all nations only that it varies in degree (Teichova & Matis, 2003). Reduction in its levels promotes economic growth and development in any country. There are various types of unemployment which include voluntary unemployment, involuntary unemployment, frictional unemployment, cyclical unemployment, structural unemployment and seasonal unemployment. Voluntary unemployment is where workers willingly leave the jobs they are holding and go to look for better ones. Involuntary unemployment on the other hand is where workers are fired or laid off from their jobs and need to find new ones. Frictional unemployment is where workers take some time before they can secure a job after leaving a certain job. This is a type of unemployment faced by many people since they leave jobs without having already secured new ones. Cyclic unemployment is the type of unemployment that is dependent on economic cycles of recession and boom (Cogley & Sargent 2005). As the economy enters into recession, some companies respond by cutting on the level of production hence laying off workers since they are not in full production. Cyclic unemployment naturally ends during boom. Structural unemployment on the other hand is the type of unemployment where some labor markets have more workers than the total jobs available (Jena, Kandalam & Sun, 2009). Also, it can occur where the

Indonesia is the sixteenth largest economy, the largest economy in the South-east Asian economic region with the world's fourth largest population (263 million in 2017). It is an emerging economy that has increased its international integration, trade liberalisation and diverted from policies of import substitution towards export-led development. Indonesia is a member of the Group of 20 (G20) major economies and has been an active founding member of the World Trade Organisation (WTO). The impact of globalisation has benefited Indonesia as quality of life indicators and economic developments have improved but it also presents the challenge of improving regulations, building more competitive industries, increasing investment into education and infrastructure to remain competitive. Consequently, Indonesia has introduced numerous strategies to promote economic growth and development.

Since 1965, the president of Indonesia continued to provide continuity and stability. However, in order to define an effective and complex growth plan, a company wishing to be successful needed the president’s support to succeed in the plan.

Monthly operations is important, but it also depends on company performance in particular areas of activity. Performance in the marketplace influences profitability, and in the case for Bintang Harapan Desa, their heart and soul lies in the production of crude palm oil. Nearly 4,500-5,000 tons of Crude Palm oil is made monthly to be distributed to buyers who are mainly cooking oil manufacturers and biodiesel manufacturers. The key indicator on overall performance of market operation are market share and market ranking by sales volume. As of now, Indonesia is the largest producer of crude palm oil, producing more than 20.9 million tonnes. Despite Indonesia being the largest producer, there are only a few businesses that are in the business of palm oil making; Bintang Harapan Desa is one of the few. Thus, a substantial market share and being one of the top supplier is a factor to determine the overall performance too, since it allows market influence on pricing and are more likely to be more

Capital account liberalization process in Indonesia started under Soeharto’s New Order presidency which was remarked by the introduction of Foreign Investment Law in 1967. Prior the issuance of this law, under President Soekarno regime (1945-1967), the government initiated self-sufficiency policy and Indonesia was administered as a socialist economy. In Soekarno era, investors from western countries were strictly restricted to invest in Indonesia (Fitriandi et al 2014, p.81). As a consequence, Indonesia was not an attractive place for foreign investors (Lindblad 2015, p.221). The absence of rule of law concerning foreign direct investment in the period of 1945-1967 has made investment environment in Indonesia became uncertain and had high business risks which were unfavourable for businesses. The business parties were became unconfident and faced uncertain and unpredictable of