Editing Economy of Indonesia (section)

==Challenges==
===Embezzlement and corrupt bureaucracy===
[[File:KPKHQ.jpg|thumb|As the result of a revised law in 2019, the anti-graft agency ([[Corruption Eradication Commission|KPK]]) has been viewed more negatively by the public.]]
[[Corruption in Indonesia|Corruption is pervasive]] in the Indonesian government, affecting many fields that are central to barrier the country's economic development from local governments, the police, the private sector even various ministerial institutions which are close to the president.<ref>{{cite news |last1=Karmini |first1=Niniek |title=Indonesia's social minister named suspect in million-dollar bribery case |url=https://www.smh.com.au/world/asia/indonesia-s-social-minister-named-suspect-in-million-dollar-bribery-case-20201206-p56l12.html |access-date=6 December 2020 |publisher=The Sydney Morning Herald |date=6 December 2020}}</ref><ref>{{cite news |last1=Connors |first1=Emma |title=Indonesian cabinet minister arrested in corruption probe |url=https://www.afr.com/world/asia/indonesian-cabinet-minister-arrested-in-corruption-probe-20201125-p56hu0 |access-date=25 November 2020 |publisher=The Australian Financial Review |date=25 November 2020}}</ref> It is related to problems of human capacities and technical resources remains a major challenge in merging effectiveness and integrity in public administration, especially in regencies and cities.<ref>[http://www.oecd.org/gov/ethics/integrityframework-for-public-investment-9789264251762-en.htm OECD (2016), Integrity Framework for Public Investment] ''OECD Publishing''</ref> A 2018 [[World Economic Forum]] survey reports that corruption is the most problematic issue regarding doing business in Indonesia, as well as inefficient government bureaucracy policies. The survey also showed that 70% of entrepreneurs believe that corruption has grown in Indonesia, while low trust in the private sector is a major obstacle to foreign investment in the country.<ref>[http://www3.weforum.org/docs/GCR2017-2018/03CountryProfiles/Standalone2-pagerprofiles/WEF_GCI_2017_2018_Profile_Indonesia.pdf Most problematic factors for doing business in Indonesia], {{webarchive |url=https://web.archive.org/web/20171118170050/http://www3.weforum.org/docs/GCR2017-2018/03CountryProfiles/Standalone2-pagerprofiles/WEF_GCI_2017_2018_Profile_Indonesia.pdf |date=18 November 2017 }}, ''World Economic Forum''</ref>

In 2019, a [[2019 Indonesian protests and riots#Revision of Corruption Eradication Commission Law (RUU KPK)|controversial bill]] regarding the anti-corruption body ([[Corruption Eradication Commission]] (KPK)) reduced the commission's effectiveness in tackling widespread corruption problems and stripped its independence was passed despite massive protests across the country.<ref>{{Cite web|url=https://coconuts.co/jakarta/news/parliament-ratifies-controversial-revisions-to-law-governing-indonesias-corruption-eradication-commission/|title = Parliament ratifies controversial revisions to law governing Indonesia's Corruption Eradication Commission &#124; Coconuts Jakarta|date = 17 September 2019}}</ref><ref>"Suharto with a saw: Indonesia is lurching back into authoritarianism with Joko Widodo at the helm", (October 2020) ''The Economist''</ref> There were 26 points in the revised law that crippled the commission and might further undermine efforts to eradicate corruption in Indonesia.<ref>[https://jakartaglobe.id/context/corruption-not-kpk-the-main-obstacle-to-investment-in-indonesia-antigraft-agency-says Corruption, Not KPK, the Main Obstacle to Investment in Indonesia, Antigraft Agency Says], 25 September 2019 ''Jakarta Globe''</ref>

===Labour unrest===
As of 2011, labour militancy was growing with a major strike at the [[Grasberg mine]], the world's largest [[gold mine]] as well as the second-largest [[copper mine]],<ref>{{cite web|title=Grasberg Open Pit, Indonesia|url=http://www.mining-technology.com/projects/grasbergopenpit|website=Mining Technology|access-date=16 October 2017}}</ref> and numerous strikes elsewhere. A common issue was the attempts by foreign-owned enterprises to evade Indonesia's strict labour laws by calling their employees' [[independent contractor|contract workers]]. ''The New York Times'' expressed concern that Indonesia's cheap labor advantage might be lost. However, a large pool of the unemployed who will accept substandard wages and conditions remains available. One factor in the increase of militancy is increased awareness via the Internet of prevailing wages in other countries, and the generous profits foreign companies are making in Indonesia.<ref name=NYTKASBI>{{cite news|title=As Indonesia Grows, Discontent Sets in Among Workers|url=https://www.nytimes.com/2011/12/27/business/global/as-indonesia-prospers-discontent-sets-in-among-workers.html |archive-url=https://ghostarchive.org/archive/20220103/https://www.nytimes.com/2011/12/27/business/global/as-indonesia-prospers-discontent-sets-in-among-workers.html |archive-date=2022-01-03 |url-access=subscription |url-status=live|access-date=27 December 2011|newspaper=The New York Times|date=26 December 2011|first=Sara|last=Schonhardt}}{{cbignore}}</ref>

On 1 September 2015, thousands of workers in Indonesia staged large demonstrations across the country in pursuit of higher wages and improved labour laws. Approximately 35,000 people rallied in total. They demanded a 22% to 25% increase in the minimum wage by 2016 and lower prices on essential goods, including fuel. The unions also want the government to ensure job security and ensure the fundamental rights of the workers.<ref>{{cite news|title=Textile workers protest for new minimum wage in Indonesia|url=http://banglaapparel.com/en/news/2015-09-09_14:04:47:0.424106001441785887.en.html|newspaper=BanglaApparel.com|date=9 September 2015|first=Kaniz|last=Fatima|access-date=9 September 2015|archive-url=https://web.archive.org/web/20150923163508/http://banglaapparel.com/en/news/2015-09-09_14:04:47:0.424106001441785887.en.html|archive-date=23 September 2015|url-status=dead}}</ref>

In 2020, thousands of workers across the country held a massive march to protest against the [[Omnibus Law on Job Creation]] that included several controversial rules, which revised minimum wages, lowered severance pay, relaxed firing rules, among other disadvantaging regulations for labors and factory workers.<ref>{{Cite web|last=Afifa|first=Laila|date=2020-02-12|title=Omnibus Is Throwing People and Democracy under the Bus|url=https://en.tempo.co/read/1306889/omnibus-is-throwing-people-and-democracy-under-the-bus|access-date=2020-11-21|website=Tempo|language=en}}</ref><ref>{{Cite web|last=Bhwana|first=Petir Garda|date=2020-11-17|title=Jokowi Asserts No Perpu to Revoke Job Creation Law|url=https://en.tempo.co/read/1406025/jokowi-asserts-no-perpu-to-revoke-job-creation-law|access-date=2020-11-21|website=Tempo|language=en}}</ref><ref>{{Cite web|last=Hakim|first=Rakhmat Nur|editor-last=Erdianto|editor-first=Kristian|publisher=Kompas Cyber Media|location=[[Jakarta]]|title=Jokowi Sebut Protes terhadap UU Cipta Kerja Akan Ditampung di PP dan Perpres|url=https://nasional.kompas.com/read/2020/11/16/22110361/jokowi-sebut-protes-terhadap-uu-cipta-kerja-akan-ditampung-di-pp-dan-perpres|access-date=2020-11-21|website=KOMPAS.com|date=16 November 2020|language=id}}</ref>

===Inequality===
Economic disparity and the flow of natural resource profits to Jakarta has led to discontent and contributed to separatist movements in areas such as Aceh and Papua. Geographically, the poorest fifth regions account for just 8% of consumption, while the wealthiest fifth account for 45%. While there are new laws on decentralization that may address the problem of uneven growth and satisfaction partially, there are many hindrances in putting this new policy into practice.<ref name="nationsencyclopedia.com">{{cite web|url=http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Indonesia-POVERTY-AND-WEALTH.html#ixzz1FB50TL4X |title=Indonesia Poverty and wealth, Information about Poverty and wealth in Indonesia |publisher=Nationsencyclopedia.com |access-date=29 August 2011}}</ref> At a 2011 Makassar Indonesian Chamber of Commerce and Industry (Kadin) meeting, Disadvantaged Regions Minister said there are 184 regencies classified as disadvantaged areas, with around 120 in eastern Indonesia.<ref>{{cite web|url=http://www.thejakartapost.com/news/2011/04/04/120-poor-regencies-are-east.html|title=120 poor regencies are in the east|work=The Jakarta Post|date=18 July 2011|access-date=29 August 2011}}</ref> 1% of Indonesia's population has 49.3% of the country's $1.8 trillion wealth, down from 53.5%. However, it is ranked fourth after Russia (74.5%), India (58.4%) and Thailand (58%).<ref>{{cite web|url=http://jakartaglobe.id/business/indonesias-richest-one-percent-controls-nearly-half-nations-wealth-report/|title=Indonesia's Richest One% Controls Nearly Half of Nation's Wealth: Report|access-date=2 December 2016}}</ref>

===Inflation===
Inflation has long been a problem in Indonesia. Because of political turmoil, the country once suffered hyperinflation, with 1,000% annual inflation between 1964 and 1967,<ref>By the time of Sukarno's downfall in the mid-1960s, the economy was in chaos with 1,000% annual inflation, shrinking export revenues, crumbling infrastructure, factories operating at minimal capacity, and negligible [[Investment#In economics or macroeconomics|investment]]. Schwarz (1994), pages 52–57</ref> resulting in severe poverty and hunger.<ref>{{cite web|url=http://www.welcome2indonesia.com/index.php?option=com_content&view=article&id=90:ir-soekarno-the-first-president-of-indonesia&catid=70:famous-people&Itemid=87|title=Ir Soekarno The First President of Indonesia|publisher=Welcome2indonesia.com|date=18 May 2010|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110718023555/http://www.welcome2indonesia.com/index.php?option=com_content&view=article&id=90:ir-soekarno-the-first-president-of-indonesia&catid=70:famous-people&Itemid=87|archive-date=18 July 2011|url-status=dead}}</ref> Even though the economy recovered quickly during the first decade of the New Order administration (1970–1981), never once was the inflation less than 10% annually. The inflation slowed during the mid-1980s; however, the economy was also languid due to the decrease in oil price that reduced its export revenue dramatically. The economy was again experiencing rapid growth between 1989 and 1997 due to the improving export-oriented manufacturing sector. Still, the inflation rate was higher than economic growth, and this caused a widening gap among Indonesians. Inflation peaked in 1998 during the 1997 crisis at over 58%, causing poverty to rise to the levels of the 1960s.<ref>{{cite web|url=http://www.imf.org/external/pubs/ft/weo/2010/02/weodata/weorept.aspx?pr.x=46&pr.y=15&sy=1980&ey=2000&scsm=1&ssd=1&sort=country&ds=.&br=1&c=536&s=PCPI%2CPCPIPCH&grp=0&a=|title=Report for Selected Countries and Subjects|publisher=Imf.org|date=14 September 2006|access-date=29 August 2011}}</ref> During the economic recovery and growth in recent years, the government has been trying to lower the inflation rate. However, it seems that inflation has been affected by global fluctuation and domestic market competition.<ref>{{cite web|url=http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/INDONESIAEXTN/0,,contentMDK:21517996~pagePK:141137~piPK:141127~theSitePK:226309,00.html|title=Indonesia – Financial & Private Sector Development in Indonesia|publisher=World Bank|date=18 October 2007|access-date=29 August 2011}}</ref> As of 2010, the inflation rate was approximately 7%, when its economic growth was 6%. To date, inflation is affecting the Indonesian lower middle class, especially those who are not able to afford food after price hikes.<ref>{{cite web|url=http://www.thejakartaglobe.com/bisindonesia/faced-with-skyrocketing-food-prices-indonesian-govt-to-speed-up-work-on-food-estate/415712|title=Faced With Skyrocketing Food Prices, Indonesian Govt to Speed Up Work on Food Estate|work=Jakarta Globe|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110717011136/http://www.thejakartaglobe.com/bisindonesia/faced-with-skyrocketing-food-prices-indonesian-govt-to-speed-up-work-on-food-estate/415712|archive-date=17 July 2011|url-status=dead}}</ref><ref>{{cite web|url=http://www.forextradinglb.com/news.php?go=fullnews&newsid=1383|title=Indonesia Inflation Accelerates, Adding Pressure to Raise Rate :: Forex Trading Lebanon|publisher=Forextradinglb.com|date=1 February 2011|access-date=29 August 2011|archive-url=https://web.archive.org/web/20110711020316/http://www.forextradinglb.com/news.php?go=fullnews&newsid=1383|archive-date=11 July 2011|url-status=dead}}</ref> At the end of 2017, Indonesia's inflation rate was 3.61%, or higher than the government-set forecast of 3.0–3.5%.<ref>{{Cite news|url=http://www.nasdaq.com/article/indonesias-dec-annual-inflation-rate-at-361-pct-above-forecast-20180101-00085|title=Indonesia's Dec annual inflation rate at 3.61 pct, above forecast|date=2018-01-01|work=NASDAQ.com|access-date=2018-01-28}}</ref>