ABSTRACT

INTRODUCTION The fall of international oil prices in the early and mid-1980s had profound consequences on the direction of Indonesian economic policy.1 Essentially, it heralded a difficult period of readjustment which involved pressures to significantly liberalise the economy and redefine the role of the state. In terms of economic thinking, what emerged was a fundamental challenge to the statist-nationalist position which predominated since the first oil ‘boom’ of 1974. This challenge, significantly, embodied many of the concerns of the World Bank critique of Indonesian economic policy discussed in Chapter 4.