The Pattern of Growth in Indonesia after the Economic Crisis 1997/1998: Does the Primary Sector Still Need to Support Economic Growth?

Author: 
Fajar Bambang Hirawan
Sergio Cesaratto
Description: 
CSIS WORKING PAPER SERIES, WPE 104
JEL codes: 
Organisation: 
Abstract: 
This paper aims to examine the pattern of growth in Indonesia, especially after the economic crisis 1997/1998. Indonesia suffered a catastrophic economic crisis from the year 1997 until 1999 and the economy improved from the year 2000 even though it was still dependant on the non-economic fundamental factor. This paper represents the progress of each of the main sectors in the economy, such as primary, secondary, and tertiary sectors, from the year 2001 until 2007, particularly focusing on its role to support economic growth. The primary sector, which consists mostly of agriculture and mining, is always excluded by policy makers because of its decreasing contribution to the Gross Domestic Product (GDP). The interesting phenomenon that we can learn from this paper is the two-way correlation, which happens between primary sector growth and GDP growth, it also happens to the secondary sector. On the other hand, tertiary sector growth has only one-way correlation with GDP growth.