ABSTRACT
Over the last two decades, the Indonesian economy has experienced remarkable economic growth. The economic reforms and deregulation instituted in this period have led to a recovery in gross domestic product (GDP) from a low of 2.6 per cent in 1985 to an average of 6-7 per cent in the 1990s in real terms (Feridhanusetyawan 1999). However, fortunes reversed in 1997 with the onset of the Asian Crisis. The Crisis quickly spread into the real sector,1 and by early 1998 Indonesia was in its worst economic recession since the 1960s. Further, political and social instability following democratisation and regional decentralisation escalated. To complicate matters, the impact of external forces such as globalisation was also becoming increasingly evident.
