Irwan Jo's List: Indonesia Watch

• The strategy covers liberalization of the current account and capital account of the balance of payments, as well as the financial sector.
• closer integration of the domestic economy to global markets
• export-oriented strategy
• tap into skilled laborers and other global factors of production, to upgrade infrastructure and technology for development.
• Through strategic state-owned enterprises and industrial policies
• First, to correct the Dutch disease of the exchange rate and make the real effective exchange rate (REER) positive. REER is the nominal exchange rate adjusted against a basket of foreign currencies with which the country trades.
• The export-oriented strategy consists of two broad policies
• positive REER makes domestic-made products have financial competitiveness in international markets.
• The second policy to promote international competitiveness is to raise economic productivity through training and education as well as building institutions.
• The appreciation of the rupiah hurts other sectors of the economy as it makes prices on import cheaper and raises prices of exports in foreign currencies.
• The competitive exchange rate management is therefore to correct this and encourage the transfer of economic resources from the low-productive non-traded sector of the economy to the high-productive traded sector.
• we are now more depending on imported food, fruits and manufactured consumer goods that are mainly produced by farmers and manufacturers on the populous island of Java that cannot compete with import
• Liberalization in the capital account
• The role of foreign capital is also on the rise in our narrow and shallow bond and capital markets.
• On the other hand, most of the economic sector hurt by the appreciation of the rupiah, such as food, agriculture and horticulture, and labor intensive manufacturing products, are being produced on Java.
• This includes protection of property rights, enforcement of contract, correction of market failures and externalities
• , the elimination of red tape and corruption, and improvements in the investment climate and the cost of doing business.
• Indonesia should reestablish the Postal Saving Bank that had been destroyed by the past high inflation and regional conflicts.

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• This is also the value that an individual consumer will pay for an imported good at the consumer level. This price will include any tariffs and transactions costs associated with importing the good.

• the bulk of Indonesian
  voters is at the center of the spectrum. To become a major political party, the PKS needs to move to the center.
• First is minimizing the contradictions in the party’s rhetoric and behavior
• Second is minimizing defections of party loyalists
• Third is accommodating and finding a middle ground with PKS leaders
• Fourth is minimizing penetration of opportunistic politicians who have the potential to taint PKS’ image as one of the cleanest parties in Indonesia.
• First is the declining level of party identification and attachment among the Indonesian voters
• Second and related to the first, is the low level of trust of voters toward parties that encourage them to vote for new alternatives.
• Third, it is unlikely that Indonesia will have a figure as dominant as SBY in 2014, which provides an advantage for PKS, which is more of an organization-based rather that a figure-based political party

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