Country Risk in Indonesia

Historic Events Influencing Country Risk in Indonesia

One of the more significant historic events influencing country risk in Indonesia was the creation of the Association of Southeastern Asian Nations (ASEAN) of which Indonesia was a charter member and is a current member. ASEAN is a regional economic development organization that is composed of five members: Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

The industrial policy organization for the ASEAN nations as a group is the Economic Bureau of the ASEAN Secretariat. (UNIDO, 1994, p. 10). The Economic Bureau functions through five separate committees, each of which exercises association industrial policy development responsibilities in a separate area. These five areas are industry, minerals, and energy, food, agriculture, and forestry, finance and banking, transportation and communications, and trade and tourism. Each of the five ASEAN countries also has its own industrial policy organization.

In addition to the ASEAN Secretariat and the national industrial policy organizations, the Economic Council of the ASEAN Secretariat has formed what are called industry clubs. These industry clubs are associations of industry participants in the various industries in the ASEAN countries. The indust

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permitted to be repatriated. Profits are permitted to be repatriated at the prevailing international currency exchange rate which is applicable. With respect to the United States dollar, Indonesia's currency is permitted to float--within limits. An important aspect of financial regulation in Indonesia involves the permission of monopolistic enterprise. Monopolies are permitted (created) by government regulation in Indonesia in a wide variety of industries and economic activities. In the mid-1980s, there were well over 200 such government protected monopolies. Under pressure from The World Bank, the government agreed to end 165 of these monopolies. The 165 monopolies being terminated, however, account for less than two-percent of the countries total imports, while those permitted to remain account for 63.3 percent. The most significant of the monopolies remaining are in banking and finance, steel, plastics, oil trading, insurance, foodstuffs, tourism, and telecommunications. The monopoly creating regulations in Indonesia are called network of trade regulation. Critics of the monopoly regulation contend that it is stifling economic growth, causing increases in inflation and unemployment, and jeopardizi
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Approximate Word count = 2147
Approximate Pages = 9 (250 words per page)

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