Anti-globalisation, poverty and inequality in Indonesia

Arief A Yusuf, Peter Warr

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

The 199798 Asian financial crisis was a turning point for Indonesia, as it was for many other East Asian countries. In addition to the economic consequences, Indonesia experienced dramatic political change, including a transition to electoral democracy and far-reaching government decen tralisation. In the post-crisis period, the average growth rate of real GDP per capita has been only marginally lower than during the two decades preceding the crisis, but the rate of poverty reduction has slowed signifi cantly. Something seems to have happened to make growth substantially less effective in reducing poverty. Simultaneously, Indonesia has experi enced a huge increase in measured economic inequality. The slowdown in the rate of poverty reduction per unit of growth and the increase in inequality can be viewed as quantitative aspects of the same distributional phenomenon, in which different segments of the population recovered from the crisis at widely divergent rates. What caused this to happen? The present study marks the initial step in a research program in which the authors aim to explore competing hypotheses that might explain the change in the povertyinequality nexus since the crisis. The hypothesis examined in this article relates to what we will call anti-globalisation: resistance to the increasing reliance on international trade that has been a characteristic of globalisation, with that resistance taking the form of tight ened restrictions on international trade. At the same time as inequality has increased in Indonesia, protectionism has also risen, both interna tionally and within Indonesia.
Original languageEnglish
Title of host publicationIndonesia in the New World: Globalisation, Nationalism and Sovereignty
EditorsArianto A. Patunru, Mari Pangestu & M. Chatib Basri
Place of PublicationSingapore
PublisherISEAS Publishing
Pages133-177
Volume1
Edition1st
ISBN (Print)9789814818223
Publication statusPublished - 2018

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