Globalisation has played a large part in the East Asian economic region, proving to have had a large influence in recent years. As a result, the economies in this region have witnessed increased international trade, foreign investment and rapid industrialization. Additionally, this region is home to some of the fastest growing economies in the world. They are a clear illustration of the growth opportunities that come from more open markets, demonstrating the challenges of managing rapid economic change. Indonesia is a country situated in South-East Asia with a population of 238 million people, spread over 17508 islands. It is the largest economy in the South-East Asian economic region, ranking 19th in the world. Indonesia is an emerging economy, increasing its international integration in recent years. As a result of taking its economy to global scale in the mid 1980s, Indonesia has experienced growth of trade, investment and greater participation of TNC’s in the economy. Through experiencing major international economic disturbances such as the Asian Financial Crisis (1997), Indonesia has become stronger as an economy. Furthermore, Indonesia’s experiences with economies policies highlights the complexity that accompanies tackling both short and long term issues in an ever-changing environment.
Distribution of Income and Wealth
In Indonesia, the poorest 10% of the population earns approximately 3.6% of the country’s income, while the highest 20% of the population earns nearly half of the country’s wealth, at 45.5%. This shows a fair amount of inequality between the richest and the poorest within the Indonesian economy. Gini index is the measure of income equality; Indonesia’s Gini Index has dropped from 34.3 in 2002, to 39.4 in 2005. This is one of the reasons why the middle-class household income in Indonesia is relatively even, therefore allowing Indonesia to do better in the international market over other economic. Nearly 18% of the...