Financial growth in Indonesia

Financial growth in Indonesia

Indonesia has four unicorns, all tech startups worth over $1 billion: ride-hailing Go-Jek, travel site Traveloka, and market places Bukalapak and Tokopedia. We can expect more unicorns to come from Indonesia once they improve things like transport (roads, rail, MRT, airports), internet (need more speed), decent electrical connections that don't suffer power cuts which bring tech companies to a standstill as mobile connections cannot handle the data volume of broadband, at least not until 5G is fully in use.

Indonesia contains the largest economy in South Asia and is emerged as one of the best market in the world. It is considered as the top 16th largest economy in the world by nominal GDP. Indonesia still depends upon the government budget spending, but from the recent years the economy of Indonesia is controlled by Private Indonesians from some foreign companies. In the financial as well as economic crisis that starts in the mid 1997 the government has taken custody of the significant portion of the private sectors. Since 1999 economy gets recovered and growth has improved and increased to over 4-6% in the recent past years.

Economy in new order:

There was high level of economic development in from 1987 to 1997 marked a lot of structural weakness in Indonesia. In the terms of corruption and weakness the economic growth became a high level, severe public through misconduct of financial sector. Corruption gradually goes on increasing with the passage of time as result of which the permissible system became very fragile, and there was no efficient way to put into effect contracts. Non traffic barriers, domestic subsides, barriers in domestic deals and sell overseas restrictions, all these things create the harmful aspect upon economy of Indonesia.

Financial Crisis:

Financial crisis in Asia started to badly affect the economy of Indonesia in the mid of 1997 which became financial and political calamities. Severe effects were produced due to financial along with the economic crisis. By the end of 1997, quick currency reduction was seen and public debt reached to $60 bin imposing some stress on the government' budget. Since 1998 a real GDP (Gross domestic product) contracted to 13.1%. The financial system reached its lowest point in the mid of 1999 and GDP for the whole year was about 0.8%. Inflation mounted up to 72% in the year 1998 but slow down by 2% in next year.


Since late 1980s Indonesia had made some changes to meet economic needs and to encourage the economic growth. This growth was done by some financial support from some private investments both foreign and domestic. US investors highlight oil and gas sectors and some of the largest Indonesian projects regarding to Mining Projects. The presence of US banks, manufactures and service providers expanded especially after financial and industrial sector changes of the 1998. The economic crisis created continued private financing which creates problems too. The crisis further became more prominent in those areas where the additional changes were required. Indonesia again gains the investment grading rating from Fitch rating in late 2011, after losing the investment grade in December 1997 in the financial crisis while doing this Indonesia spent more than above Rp450 trillion.

Economic relations with the United States:

There is a relation between Indonesia and United states for the sort of business in which they get the things import and export. US exports to Indonesia in the late 1999 totaled $2.0 billion. The main exports of the US towards Indonesia were machines, chemicals, equipments for transportation, petroleum, natural rubber, footwear, equipments for construction, aviation parts, agricultural products, petroleum