Indonesia Economic System Analysis

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Indonesia has been independent since 70 years ago but the economy in Indonesia have also improved. Indonesia has three three-era an era where it is led by a different President of the old order led by President Sukarno, the new order regime headed by President Suharto, reformasi era led by President B.J.Habibie, Abdurahman Wahid, Megawati Soekarno Putri, Susilo Bambang Yudhoyono. Based on Constitution of 1945 Indonesia . Indonesia follows the Constitution where economic system as the foundation of Pancasila in Indonesia. Mubyarto and Emil Salim was the first to promote this system . Pancasila Economic system is an economic system based on values Constitution of 1945 and Pancasila. There are several articles related to the economic system,…show more content…
As we know indonesia is still using the Constitution as the basis of its ideology despite that every President has its own strategy to lead a country. In the old order Indonesia was known to have high spirits because freed from colonialism and became an independent country, indonesia at that time have the motto Achieve Berdikari “Berdiri Di Kaki Sendiri” (stand on our own Feet) . The definition of this motto itself was that Indonesia society must stand in all areas especially in the economic sphere. There are several challenges in dealing with the Government at a time when the old order as free include: 1. Inflation is very high, this is because the release more than one currency uncontrollably. There are three valid currency in the territory of INDONESIA, namely currency De Javashe Bank, Netherlands Indies Government currency, and the currency of the occupation of Japan. 2. The existence of an economic blockade by the Netherlands since November 1945 to close the doors of foreign trade RI. 3. The State Treasury empty. 4. Massive exploitation of colonial…show more content…
The economic challenges facing Indonesia is heavy due to the decline of foreign exchange revenues from petroleum exports in the early 1980s Indonesia development policy taken is colloquially known as "structural adjustment" where there are 4 types of adjustment policies as follows: 1. The existence of a fiscal policy, monetary policy, exchange rate and currency with the aim of lowering the level of demand 2. The policy Package "Paknov 1988" which removes the import monopolies for some steel products and other important raw materials, have been pushing the market mechanism to function effectively at the time. 3. A policy of productive capacity and thus economy through savings and investment. 4. Creating an environment of legal Policies that could encourage market mechanisms to operate effectively including guarantees of property rights and various actions of his

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