ABSTRACT
INTRODUCTION Over the past 30 years, Indonesia’s economic structure has undergone a remarkable transition. In 1967, Indonesia was in chaos. Per capita income had declined to a level below that reached five years earlier, the economy was wracked by hyper-inflation, the agriculture sector could not produce enough food, and poverty was the lot of most people.1 Although the New Order Government moved decisively to establish some degree of economic order, even as recently as 1985 Indonesia showed little evidence of industrialization. The country’s exports still consisted largely of oil and gas, with a variety of other primary products making up most of the rest. The agricultural sector still constituted 24 percent of GDP while non-oil/ gas manufacturing contributed less than 14 percent. Yet by 1994, real GDP had grown by an average of 7.6 percent per year and non-oil/gas manufacturing had grown to 20 percent of GDP. This performance made Indonesia eligible for inclusion in the World Bank’s East Asian Miracle volume.
