Download In the past Indonesia has had a considerable

Indonesia
ECOFIN
Topic 1: Third United Nations Decade for the Eradication of Poverty
In the past Indonesia has had a considerable amount of people living in poverty. In 2007,
37 million out of 231 million people lived in poverty. However its poverty rate has gradually
declined throughout the years to 28 million in 2017. Although Indonesia’s poverty rate is low
compared to its neighbors, many people are vulnerable to falling into indigence because they live
just above the poverty line. In the past Indonesia has reduced its destitution due to economic
growth. The government and business owners created more jobs and started to sell more in the
global market. Indonesia also moved from agriculture to industries and more skilled services
which cut their poverty rate in half. Despite Indonesia’s shift from rural to urban, natural
disasters play a key role in keeping citizens in impoverishment. Indonesia is prone to volcanic
eruptions, tsunamis, earthquakes, landslides and floods. These disasters are costly and occur in
rural areas in which a majority of Indonesia’s impoverished population resides. As most of these
disasters occur in land occupied by the poor, the financial tolls they take are unbearable. As a
result of these natural disasters, Indonesians have made a push into industrialization that has in
fact decreased its poverty rate.
Currently, Indonesia’s poverty reduction has slowed down. Currently, it is the 16th
largest economy in the world and the largest in Southeast Asia. Since 2004, its annual growth is
between four and six percent. Furthermore, Indonesia has a low unemployment rate at just
5.81%. Indonesia has implemented programs to alleviate poverty in urban areas. In spite of a
recent decrease of poverty in Indonesia, the inequality in the country is rising. This could begin
to affect political and social coherence and obstruct economic growth. Recently, Indonesia has
implemented multiple social protection programs to ease the poor from economic disturbance. In
turn, this would benefit the poor population by quickly getting them back on their feet if an
economic crash were to occur. This would also gradually help diminish the poverty rate and near
poverty rate. In today’s society, women are prone to poverty due to unequal access to education
and women earn much less than men. Another step the government has taken is investing in
small local companies. This helped increase employment and helped its consumers. Since 1990,
Indonesia has become more and more globally involved in the global market being said, this
allowed the country to reduce poverty and increase its GDP. As of 2017, the economy is still
growing, but at a more gradual rate.
In order to completely eradicate poverty, Indonesia must increase its cooperation with
other countries. Since Indonesia is rich in very prized natural resources such as gold, silver,
copper, natural gas, petroleum and timber; trading and expanding connections to countries with
stable economies could lead to a more stable economy and a decline of poverty. With
Indonesia’s supply of petroleum and natural gas, they could create oil rigs and fracking
establishments. This would create more jobs and would allow the country to make enormous
profit by selling it to popular first world countries. In addition, establishing schools would
educate children and women, which would lead to more skilled workers. The skilled workers can
then start their own companies or work for pre-existing companies and produce more goods and
get paid more. Also, having multinational corporations create stores and factories could make the
prices for products decrease, which would allow a diversity of people to purchase and have
access to necessary goods.
Topic 2: External Debt Sustainability and Development
Historically, Indonesia has had a very stable and positively changing government.
Although in the beginning it suffered due to inexperience, it got back on its feet under President
Suharto who brought down inflation, rescheduled foreign debt stabilized currency and attracted
foreign investment. With Indonesia’s supply of petroleum and natural gas, the economy has been
able to grow continually and consistently. More and more multinational industries and
corporations started to flow into Indonesia; this allowed the economy to grow by just above 7%
and increased the amount of trade between other countries. However this all took a turn in the
1990s when Suharto corrupted the Indonesian government, which later led to mismanagement in
manufacturing. Not only did corruption take place, but the availability of resources started to
plummet driving its economy down because of its heavy reliance on oil and natural gas. To try
and get out of debt Suharto placed many high tariffs on exported goods which led to domestic
subsidies and other economic distortions. In 1997 a political crisis peaked, and in agreement with
the IMF, Indonesia reformed many of its economic policies aimed at macroeconomic
stabilization. With the help of the IMF Indonesia agreed on an Extended Fund Facility (EFF)
which helped with structural reforms. Unfortunately in 1997, the value of the rupiah depreciated
greatly and reached in all-time low. Inflation increased rapidly in 1997 and 1998, but later
dropped to its previous rate.
Currently, Indonesia has the 16th largest economy and it is gradually increasing annually.
As of right now Indonesia’s fiscal policy is credible and government spending has increased as
well as, low and secure inflation, booming private consumption prosperity and moderate budget
deficit, current account deficit, and government debt. Unfortunately, China’s economy is
decelerating and that is Indonesia’s second largest exporter right after Japan. This could lead to a
surplus of product and loss of money. Another hazard to Indonesia’s economy is its
unpredictability. Due to seven new reforms, the economy has had a steady growth rate. The
reforms eased starting a business, receiving electricity for paying taxes, recording property,
gaining credit, implementing contracts and trading across borders.
In order to solve the growing economic crisis, Indonesia advises putting focus on one
troubled country at a time and for the IMF and WB to help provide a stable financial base for
economic prosperity as they did not too long ago with Indonesia. Although helping one country
at a time may seem selfish, it is required in order to be certain that a country can get back to
where it was. The IMF and WB can team up to create AGIDE, or Attempt to Guide in Debt
Economies. They would put all their focus on one country for a maximum of one year and will
help it come up with a financial progress report. After that is set, the country will be monitored to
observe its progress. This would help each in debt country rise, stay secure and remain at a
sustainable economy. This program would use the same steps that the IMF used to help refurbish
the Indonesian economy and would adjust and abide to countries’ economies.
Topic 3: Protection of Global Climate for Present and Future Generations of Humankind
With Indonesia’s growing economy, natural resources have been cut down or drilled into
in order to sell. Unfortunately, the greenhouse gas emissions caused by such industrialization,
increased the temperature and aided global climate change. Along with significantly affecting the
climate, Indonesia is prone to the effects of climate change such as an increased sea level, more
frequent and aggressive natural disasters and extreme adverse weather. In fall of 2016, over
130,000 forest fires darkened the skies of Southeast Asia. This not only polluted the skies, but it
also destroyed thousands of trees which decreased timber supplies and affected trade. These fires
released more than 1.75 billion tons of carbon dioxide into the atmosphere, similar to the annual
emissions in Japan. However, forest fires are nothing new in Indonesia. For more than 20 years
prior to last year, similar forest fires have taken place and have continued to pollute the world.
Since 2011, the president of Indonesia has vowed to limit the amount of greenhouse
gases emitted. Despite the president’s words, government enforcement is not in order. Many
manufacturers still emit tons of carbon dioxide and do not regulate it. This is partially due to the
company's’ partnership with the military. Not only do these fires negatively affect the
atmosphere and ozone layer they also cause a variety of respiratory illnesses to the citizens of
Indonesia. If the climate change were to continue to increase by 0.3 degrees Celsius every year,
this would lead to drought and less rainfall. These effects would make the majority of people in
Indonesia drastically fall beneath the poverty line and would lead to many deaths. The National
Medium-Term Development Plan illustrates the importance of conservation, and utilization of
the natural environment to assist continuous economic growth and increased welfare of the
people. To prevent the impact of climate change the government is engaging on pollution and
emission controls, diminishing deforestation, peatlands management advancements and
environmental reconstruction.
In order to solve this problem, the government needs to be more proactive and reactive
when enforcing emission laws and regulations. They should also be firm on their word and not
give in to bribery for this could lead to corruption and more unnecessary pollution. In order to
limit pollution, the Indonesian government should limit the amount of controlled forest fires due
to their high carbon dioxide and monoxide emissions. As well as build more railways and limit
the use of semi-trucks, due to the fact that they use more gas and give off more pollution.
Railways would not only transport more goods in one trip, but would also significantly decrease
the use of oil and reduce pollution. Indonesia should halt their acts of deforestation since cutting
down the trees emits a lot of carbon dioxide and Sulphur, hazardous to human health, and cutting
down trees reduces the amount of carbon dioxide being taken away from the atmosphere and
processed into oxygen.