World Bank2013-08-282013-08-282001-12-10https://hdl.handle.net/10986/15452Indonesia's recovery was already slowing several months before the events of September 11. Political instability had raised social tensions and slowed reforms--fueling capital flight, alarming investors, and delaying official external finance for development. Progress on bank restructuring had slowed and the debt of financially strapped corporations remained largely unresolved. Corruption flourished, unchecked by a justice system that itself was corroded. Regional tensions increased even as the country embarked upon an ambitious decentralization program. And, if real wages are any indication, progress on poverty reduction--encouraging in 1999 and 2000-ground to a halt. Although markets initially welcomed President Megawati Soekarnoputri into office, the new administration has made little progress on structural and governnance reforms in her first one hundred days in office, thus renewing nervousness in markets and worrying external donors and creditors. The events of September 11 have emphatically underscored the urgency of Indonesia's reform priorities. but 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.en-USCC BY 3.0 IGOADBAGGREGATE ANALYSISAGRICULTUREANTI- CORRUPTIONANTI-CORRUPTIONASSET SALESAUDITSAUTONOMYBALANCE OF PAYMENTSBALANCE SHEETBANK FOR INTERNATIONAL SETTLEMENTSBANK INDONESIABANK LOANSBANK RESTRUCTURINGBANKING SYSTEMBANKRUPTCYBANKRUPTCY PROCEEDINGSBONDSBUDGET DEFICITBUDGETARY RESOURCESCAPITAL ADEQUACYCAPITAL FLIGHTCAPITAL FLOWSCAPITAL FORMATIONCENTRAL BANKCENTRAL GOVERNMENTCIVIL SERVICECIVIL SERVICE REFORMSCLEAN WATERCOMPETITIVE BIDDINGCONSUMER PRICE INDEXCONSUMERSCORPORATE SECTORCPIDEBTDECENTRALIZATIONDEMOCRACYDEVELOPMENT PROJECTSDISTRICTSECONOMIC GROWTHECONOMIC OUTLOOKENDANGERED SPECIESEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT GROWTHFINANCIAL DATAFINANCIAL INSTITUTIONFINANCIAL MANAGEMENTFINANCIAL MARKETSFINANCIAL SECTORFINANCING CONSTRAINTSFISCALFISCAL DECENTRALIZATIONFISCAL POLICYFISCAL SUSTAINABILITYFISCAL YEARFOREIGN BANKSFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN INVESTORSFORESTRYFREE TRADEGDPGOOD GOVERNANCEGOVERNANCE REFORMGOVERNANCE REFORMSGOVERNMENT BONDSGOVERNMENT CONSUMPTIONGOVERNMENT OFFICIALSGOVERNMENT POLICIESGOVERNMENT REGULATIONGROSS DOMESTIC PRODUCTGROWTH RATEGROWTH RATESIMPAIRED ASSETSIMPORTSIMPROVING GOVERNANCEINCOMEINFLATIONINFLATIONARY PRESSURESINSTITUTIONAL WEAKNESSESINSURANCEINTEREST RATEINTEREST RATESINTERMEDIATE GOODSINTERNATIONAL COMMUNITYINTERNATIONAL DEVELOPMENTINTERNATIONAL RESERVESINTERNATIONAL TRADEINVESTMENT CLIMATELAWSLEGAL DISPUTESLEGAL FRAMEWORKLIQUIDITYMACROECONOMIC PERFORMANCEMACROECONOMIC STABILITYMINISTRY OF FINANCEMONETARY POLICYMONEY LAUNDERINGMUNICIPALITIESNATIONAL DEVELOPMENTNATIONSNET EXPORTSOILOIL PRICESORGANIZATIONAL STRUCTUREPARLIAMENTPOLICY INTERVENTIONPOLITICAL INSTABILITYPOLITICAL UNCERTAINTYPOTENTIAL INVESTORSPOVERTY ALLEVIATIONPRICE INCREASESPRIVATE CONSUMPTIONPRIVATIZATIONPROFITABILITYPUBLIC PROCUREMENTPUBLIC PROCUREMENT SYSTEMPUBLIC SECTORREAL WAGESRECAPITALIZATIONREGULATORY FRAMEWORKREHABILITATIONREPRESENTATIVESREVENUE MOBILIZATIONREVENUE SHARINGSECURITIESSERVICE DELIVERYSOCIAL SAFETYSOCIAL SAFETY NETSTATE ADMINISTRATIONSTATE BANKSSTATE ENTERPRISESSTATE-OWNED ENTERPRISESTELECOMMUNICATIONSTELEVISIONTRANSPARENCYTRANSPORTVESTED INTERESTSWAGESWORLD TRADE ORGANIZATIONWTO DEVELOPMENT POLICYMACROECONOMIC POLICYINTERNATIONAL TRADEFISCAL POLICYEXTERNAL FINANCEFISCAL SUSTAINABILITYDEBT MANAGEMENTSTRUCTURAL REFORMSPRIVATIZATION OF PUBLIC ENTERPRISESCORPORATE RESTRUCTURINGAGRICULTURAL POLICYENERGY POLICYMINING DEVELOPMENTGOVERNANCECORRUPTION IN POLITICSFINANCIAL MANAGEMENTPROCUREMENTLEGAL FRAMEWORKJUDICIAL REFORMDECENTRALIZATIONFORESTRY OPERATIONSPOVERTY REDUCTION STRATEGIESGOVERNMENT SPENDING POLICYEMPOWERMENTMONEY LAUNDERINGORGANIZATIONAL STRUCTURERICE PRODUCTIONMACROECONOMIC STABILIZATIONSTATE BANKSSUGAR INDUSTRYBANK MERGERSCIVIL SERVICE REFORMSREGULATORY FRAMEWORKALLOCATION OF RESOURCESWorld Bank10.1596/15452