Publication: Indonesia Economic Prospects, December 2021: A Green Horizon - Toward a High Growth and Low Carbon Economy
Loading...
Files in English
9,159 downloads
Published
2021-12-15
ISSN
Date
2021-12-15
Author(s)
Editor(s)
Abstract
The Indonesia Economic Prospects (IEP) is a bi-annual World Bank report that assesses recent macroeconomic developments, outlook and risks, as well as specific development challenges for the Indonesian economy. In doing so, the IEP aims to inform the public policy debate and is geared towards a wide audience, including the general public, the government, the private sector, civil society organizations, and other domestic and international stakeholders.
Link to Data Set
Citation
“World Bank. 2021. Indonesia Economic Prospects, December 2021: A Green Horizon - Toward a High Growth and Low Carbon Economy. © World Bank. http://hdl.handle.net/10986/36732 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication "Green Stimulus," Economic Recovery, and Long-Term Sustainable Development(World Bank, Washington, DC, 2010-01)This paper discusses short-run and long-run effects of "green stimulus" efforts, and compares these effects with "non-green" fiscal stimuli. Green stimulus is defined here as short-run fiscal stimuli that also serve a "green" or environmental purpose in a situation of "crisis" characterized by temporary under-employment. A number of recently enacted national stimulus packages contain sizeable "green" components. The authors categorize effects according to their a) short-run employment effects, b) long-run growth effects, c) effects on carbon emissions, and d) "co-benefit" effects (on the environment, natural resources, and for other externalities). The most beneficial "green" programs in times of crisis are those that can stimulate employment in the short run, and lead to large "learning curve" effects via lower production costs in the longer term. The overall assessment is that most "green stimulus" programs that have large short-run employment and environmental effects are likely to have less significant positive effects for long-run growth, and vice versa, implying a trade-off in many cases between short-run and long-run impacts. There are also trade-offs for employment generation in that programs that yield larger (smaller) employment effects tend to lead to more employment gains for largely lower-skilled (higher-skilled) workers, so that the long-term growth effects are relatively small (large). Ultimately, the results reinforce the point that different instruments are needed for addressing different problems.Publication South Africa Economic Update, November 2011(Washington, DC, 2011-11)The global financial roller coaster, with the Euro zone as its lead car, has hit economic prospects across the globe. The South African economy, with its close links to the world economy, has suffered, too, resulting in weakened growth prospects, lower fiscal revenues, lower and more volatile valuation of the rand, and dampened external financing. This further compounds the policy challenges facing the authorities, on top of their preoccupation with unyielding unemployment, which requires higher and more inclusive economic growth. Policymaking is also conditioned by a growing recognition that future growth needs to be less carbon-intensive. As elsewhere, opportunities in green economies are viewed with keen interest, as a way of simultaneously targeting a cleaner environment and stimulating innovation, growth, and job creation. While green policies can have large synergies and co-benefits with the growth and employment agenda, they are not a substitute for it. Indeed, such synergies are likely to be mutually enhancing and larger when the growth and environment objectives are being pursued by multiple, well-targeted and coordinated policies.Publication Taking Stock, December 2020(World Bank, Hanoi, 2020-12-14)In these early days of December 2020, most Vietnamese must wear a face mask. The cause is not only the fear of COVID-19 (coronavirus), but also of polluted air which, in the country’s major cities, is four times more polluted than the safety level recommended by international agencies. Regrettably, even if the government has done a superb job containing the biggest and most recent pandemic, Vietnam is vulnerable to many health and environmental disasters. Beyond air pollution, which is killing an estimated 60,000 people every year, the country is exposed to coastal erosion, drought, and saline intrusion and landslide. The recent series of tropical storms in the central region, with over 240 casualties and a quarter million damaged or destroyed homes, has been another painful reminder of this fragility. This edition of the Taking Stock, after describing the recent trends in the Vietnamese economy, asks why Vietnam has not been as effective in dealing with environmental and climate challenges as with the COVID-19 crisis, which are arguably different but have also many similarities. The successful experience in implementing the right measures at the right time during the COVID-19 crisis deserves more attention as it can inspire policymakers in their commitment to address the environmental and climate challenges. First, the successful management of the pandemic has demonstrated (again) that it is better to be ready and to act early and boldly. Second, beyond vision and capacity, the ability to inspire experimentation and innovation is an effective way to change individual and collective behaviors, which is fundamental in the effort to cope with health and climate threats. By all standards, Vietnam has managed the COVID 19 crisis very well. The number of infections and deaths has been minimal, with few community infections since mid-September. Despite strict social distancing measures and an unprecedented global recession, Vietnam’s economy is expected to grow at 2.8 percent in 2020. Although this performance is about 4.2 percentage points lower than the country’s recent performance, Vietnam will remain in positive growth territory, while the world economy is expected to contract by at least 4 percent. In East Asia, only two other countries—China and Myanmar—are expected to report positive GDP growth this year. Vietnam’s economic resilience is explained by the behavior of both its domestic economy and its externalsector. After three weeks of national lockdown in April, most industrial and service activities rebounded as domestic consumers and investors regained confidence. Not only has the private sector reacted positively to the gradual easing of social distancing and mobility measures, but the government has changed the course of its fiscal policy to support the recovery. After three years of fiscal consolidation, the authorities acted decisively and accelerated the disbursement of the public investment program, which increased by about 40 percent between January and September compared to the same period a year ago. Concurrently, like most central banks, the accommodative monetary policy and temporary financial relief measures of the State Bank of Vietnam provides breathing space to affected businesses and people.Publication Indonesia Economic Prospects, June 2021(World Bank, Washington, DC, 2021-06-16)COVID-19 (coronavirus) has taken a heavy economic and human toll globally and in Indonesia. According to official statistics, over 3.8 million people have died from COVID as of May 2021. The global economy experienced one of the most severe recessions, shrinking by 3.5 percent in 2020 compared to 1.7 percent in 2009 during the global financial crisis. The recession in Indonesia (-2.1 percent) was milder than among Emerging Markets and Developing Economies, EMDEs (-4.3 percent excluding China). Small and medium-sized firms and businesses in contact-intensive services sectors were severely affected. About 1.8 million Indonesians became unemployed between February 2020 and 2021 and another 3.2 million people exited the labour force. Three hundred thousand fewer youth entered the labour market. About 2.8 million people have fallen into poverty as of September 2020 with the government’s social assistance program mitigating a potentially worse outcome. Indonesia's recovery has been relatively gradual until the first quarter of 2021 but has accelerated more recently. Indonesia’s recovery gap – the difference between real GDP and its pre-crisis trend – narrowed from -7.5 to -7.1 percent between Q2 and Q4 2020. By comparison, the average 'recovery gap' among regional and G20 peers shrank from -13.6 to -5.1 percent. The recovery gap remained elevated at -7.9 percent during the first quarter this year. Consumption and investment growth have been subdued due to the still weak labor market and high uncertainty while trade has recovered more strongly. The recovery gap in contact-intensive services sectors, such as transport and accommodation, has also been elevated compared to manufacturing industries due to social distancing and stronger external demand in manufacturing. But retail sales increased by 11 percent between March and April while the manufacturing continued to expand suggesting a stronger rebound during the second quarter.Publication Russia Economic Report, No. 46, December 2021(World Bank, Washington, DC, 2021-12)Russia saw strong growth in 2021, with momentum weakening late in the year. Growth will slow as Russia battles COVID-19 and elevated inflation. Globally, environmental sustainability is becoming central to the economic agenda. The challenge for Russia is to fundamentally transform its economic structure.
Users also downloaded
Showing related downloaded files
Publication Vietnam(World Bank, Hanoi, 2020-05-01)Following from Vietnam’s ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in late 2018 and its effectiveness from January 2019, and the European Parliament’s recent approval of the European Union-Vietnam Free Trade Agreement (EVFTA) and its subsequent planned ratification by the National Assembly in May 2020, Vietnam has further demonstrated its determination to be a modern, competitive, open economy. As the COVID-19 (Coronavirus) crisis has clearly shown, diversified markets and supply chains will be key in the future global context to managing the risk of disruptions in trade and in supply chains due to changing trade relationships, climate change, natural disasters, and disease outbreaks. In those regards, Vietnam is in a stronger position than most countries in the region. The benefits of globalization are increasingly being debated and questioned. However, in the case of Vietnam, the benefits have been clear in terms of high and consistent economic growth and a large reduction in poverty levels. As Vietnam moves to ratify and implement a new generation of free trade agreements (FTAs), such as the CPTPP and EVFTA, it is important to clearly demonstrate, in a transparent manner, the economic gains and distributional impacts (such as sectoral and poverty) from joining these FTAs. In the meantime, it is crucial to highlight the legal gaps that must be addressed to ensure that national laws and regulations are in compliance with Vietnam’s obligations under these FTAs. Readiness to implement this new generation of FTAs at both the national and subnational level is important to ensure that the country maximizes the full economic benefits in terms of trade and investment. This report explores the issues of globalization and the integration of Vietnam into the global economy, particularly through implementation of the EVFTA.Publication Digital Opportunities in African Businesses(Washington, DC: World Bank, 2024-05-16)Adoption of digital technologies is widely acknowledged to boost productivity and employment, stimulate investment, and promote growth and development. Africa has already benefited from a rapid diffusion of information and communications technology, characterized by the widespread adoption of mobile phones. However, access to and use of digital technology among firms is uneven in the region, varying not just among countries but also within them. Consequently, African businesses may not be reaping the full potential benefits offered by ongoing improvements in digital infrastructure. Using rich datasets, “Digital Opportunities in African Businesses” offers a new understanding of the region’s incomplete digitalization—namely, shortfalls in the adoption and effective use of digital technology by firms to perform productive tasks. The research presented here also highlights the challenges in addressing incomplete digitalization, finding that the cost of machinery, equipment, and software, as well as the cost of connectivity to the internet, is significantly more expensive in Africa than elsewhere. “Digital Opportunities in African Businesses” outlines ways in which the private sector, with support from policy makers, international institutions, and regulators, can help bring down these costs, stimulating more widespread digitalization of the region’s firms, thereby boosting productivity and, by extension, economic development. This book will be relevant to anyone with an interest in furthering digitalization across Africa.Publication World Bank Group Climate Change Action Plan 2021–2025(World Bank, Washington, DC, 2021-06-22)Update 2025: The World Bank Group Climate Change Action Plan (CCAP) has been extended until June 30, 2026, with no other changes. The Climate Change Action Plan 2021–2025 aims to advance the climate change aspects of the WBG’s Green, Resilient, and Inclusive Development (GRID) approach, which pursues poverty eradication and shared prosperity with a sustainability lens. In the Action Plan, we will support countries and private sector clients to maximize the impact of climate finance, aiming for measurable improvements in adaptation and resilience and measurable reductions in GHG emissions. The Action Plan also considers the vital importance of natural capital, biodiversity, and ecosystems services and will increase support for nature-based solutions, given their importance for both mitigation and adaptation. As part of our effort to drive climate action, the WBG has a long-standing record of participating in key partnerships and high-level forums aimed at enhancing global efforts to address climate change. The new Action Plan represents a shift from efforts to “green” projects, to greening entire economies, and from focusing on inputs, to focusing on impacts. It focuses on (i) integrating climate and development; (ii) identifying and prioritizing action on the largest mitigation and adaptation opportunities; and (iii) using those to drive our climate finance and leverage private capital in ways that deliver the most results. That means helping the largest emitters flatten the emissions curve and accelerate the downward trend and ramping up financing on adaptation to help countries and private sector clients prepare for and adapt to climate change while pursuing broader development objectives through the GRID approach.Publication Zambia Economic Brief, June 2015, Issue 5(World Bank, Washington, DC, 2015-06-01)After several years of strong economic performance, Zambia now confronts several important challenges that must be managed carefully to ensure sustained and inclusive growth in the future. On the one hand, the economy grew by an estimated 5.5–6.0 percent in 2014, somewhat above the average for African economies. Monthly copper production increased by an average of 8 percent during the second half of 2014, reversing the sharp slide in early 2014. Inflation fell to 7.2 percent in March and April, helped both by falling world oil prices and by the Bank of Zambia’s monetary tightening. In the first half of 2015, the authorities adjusted several key economic policies to respond to serious problems: revising rules on VAT refunds in February, announcing a new mining fiscal regime in April, and raising fuel prices in May so that the government could recover import costs. On the other hand, the kwacha has come under renewed pressure. It lost 17 percent of its value against the U.S. dollar from December 2014 through the end of March 2015. Since then it has recovered somewhat, but foreign exchange markets remain volatile. Interest rates have been rising since September 2014, due in part to increased government borrowing and in part to steps taken by the Bank of Zambia to tighten credit. Over the medium term, growth should hold steady in 2015 and then accelerate to around 6–7 percent per year in 2016–2018. Although inflation is expected to rise towards the end of 2015, it should resume falling in 2016. Low commodity prices, a more stable exchange rate, and adequate local harvests would help contain inflationary pressures and boost real disposable incomes. The resulting pick-up in private consumption, coupled with increasing copper exports, should help strengthen growth prospects.Publication World Development Report 2022(Washington, DC: World Bank, 2022-02-15)World Development Report 2022: Finance for an Equitable Recovery examines the central role of finance in the economic recovery from COVID-19. Based on an in-depth look at the consequences of the crisis most likely to affect low- and middle-income economies, it advocates a set of policies and measures to mitigate the interconnected economic risks stemming from the pandemic—risks that may become more acute as stimulus measures are withdrawn at both the domestic and global levels. Those policies include the efficient and transparent management of nonperforming loans to mitigate threats to financial stability, insolvency reforms to allow for the orderly reduction of unsustainable debts, innovations in risk management and lending models to ensure continued access to credit for households and businesses, and improvements in sovereign debt management to preserve the ability of governments to support an equitable recovery.