World Bank2013-08-282013-08-282001-11https://hdl.handle.net/10986/15466In the one hundred days since assuming office, the new administration of Megawati Soekarnoputri has made little progress on structural and governance reforms. The events of September 11 and the slowdown in the global economy worsened the investment climate in Indonesia, adding to the government's already formidable array of challenges. Indonesia's recovery has lagged behind its neighbors and over half its population vulnerable to poverty, more than any other crisis country. Moreover, its fragile banking and corporate sectors, and the precarious state of its government finances, make the country highly vulnerable to risks--with immediate implications for fiscal sustainability. Donors need to be realistic about what is feasible, given strong vested interests, severe institutional weaknesses, the uncertainties arising from decentralization, and a turbulent transition to democracy. Progress is most needed in the key areas of structural reforms, good governance, and empowering and investing in the poor. Together with fiscal sustainability, they are consistent with the premise that stability, growth, and effective government are the key ingredients for long-lasting and sustainable poverty reduction.en-USCC BY 3.0 IGOADBAGGREGATE ANALYSISAGRICULTUREANTI- CORRUPTIONANTI-CORRUPTIONASSET SALESAUDITSAUTHORIZATIONAUTONOMYBALANCE OF PAYMENTSBANK FOR INTERNATIONAL SETTLEMENTSBANK INDONESIABANK LOANSBANK RESTRUCTURINGBANKING SYSTEMBANKRUPTCYBANKRUPTCY PROCEEDINGSBONDSBUDGET DEFICITBUDGETARY RESOURCESCAPITAL ADEQUACYCAPITAL FLIGHTCAPITAL FLOWSCAPITAL FORMATIONCENTRAL BANKCIVIL SERVICECIVIL SERVICE REFORMSCOMPETITIVE BIDDINGCONSUMER PRICE INDEXCONSUMERSCORPORATE SECTORCPIDEBTDECENTRALIZATIONDEMOCRACYECONOMIC OUTLOOKENDANGERED SPECIESEXCHANGE RATEEXPENDITUREEXPORT GROWTHFINANCIAL DATAFINANCIAL INSTITUTIONFINANCIAL MANAGEMENTFINANCIAL MARKETSFINANCIAL SECTORFISCALFISCAL DECENTRALIZATIONFISCAL POLICYFISCAL SUSTAINABILITYFISCAL YEARFOREIGN BANKSFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFORESTRYFREE TRADEGDPGOOD GOVERNANCEGOVERNANCE REFORMGOVERNANCE REFORMSGOVERNMENT BONDSGOVERNMENT OFFICIALSGOVERNMENT POLICIESGOVERNMENT REGULATIONGROSS DOMESTIC PRODUCTGROWTH RATEGROWTH RATESIMPAIRED ASSETSIMPORTSIMPROVING GOVERNANCEINCOMEINFLATIONINFLATIONARY PRESSURESINSTITUTIONAL WEAKNESSESINSURANCEINTEREST RATESINTERMEDIATE GOODSINTERNATIONAL COMMUNITYINTERNATIONAL DEVELOPMENTINTERNATIONAL RESERVESINTERNATIONAL TRADEINVESTMENT CLIMATELAWSLEGAL DISPUTESLEGAL FRAMEWORKLIQUIDITYMACROECONOMIC PERFORMANCEMACROECONOMIC STABILITYMINISTRY OF FINANCEMONETARY POLICYMONEY LAUNDERINGNATIONAL DEVELOPMENTNATIONSNET EXPORTSOILOIL PRICESORGANIZATIONAL STRUCTUREPARLIAMENTPOLITICAL INSTABILITYPOLITICAL UNCERTAINTYPOVERTY ALLEVIATIONPRICE INCREASESPRIVATE CONSUMPTIONPRIVATIZATIONPROFITABILITYPUBLIC PROCUREMENTPUBLIC PROCUREMENT SYSTEMPUBLIC SECTORREAL WAGESREGULATORY FRAMEWORKREHABILITATIONREPRESENTATIVESREVENUE MOBILIZATIONREVENUE SHARINGSECURITIESSERVICE DELIVERYSOCIAL SAFETYSOCIAL SAFETY NETSTATE ADMINISTRATIONSTATE BANKSSTATE-OWNED ENTERPRISESTELECOMMUNICATIONSTELEVISIONTRANSPARENCYTRANSPORTWAGESWORLD TRADE ORGANIZATIONWTO INVESTMENT ENVIRONMENTGOVERNANCEPOVERTY INCIDENCEPOLITICAL ENVIRONMENTGOVERNMENT FINANCEECONOMIC RISKFISCAL SUSTAINABILITYDECENTRALIZATIONINSTITUTIONAL CAPACITYTRANSITIONAL ECONOMIESEMPOWERMENTSTRUCTURAL REFORMSEXTERNAL FINANCEINTERNATIONAL TRADEFISCAL POLICYDEBT MANAGEMENTCORPORATE RESTRUCTURINGAGRICULTURAL PRODUCTIVITYENERGY POLICYPRIVATE SECTOR PARTICIPATIONMINING SECTORCORRUPTIONLEGAL FRAMEWORKNONGOVERNMENTAL ORGANIZATIONSWorld Bank10.1596/15466