This research develops a country risk assessment of Indonesia. The focus of the assessment is on the financial sector of the Indonesian economy.
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 industry clubs provide input to the industrial policy organizations--both regional and national.
The ASEAN member states as a group constitute a major market in Asia. The removal of tariffs for inter-regional manufactured products within the ASEAN free trade area became effective in 1994.
A more recent event that will affect the country risk of Indonesia in the future is the formation of the Asian-Pacific Economic Council (APEC). If the promise of APEC is fulfilled, economic growth and de...