The Global Financial Crisis On Indonesia’s Real Economy Impact And Policy Analysis

The global financial crisis impact on the real economy of Indonesia and Indonesia to deal with the crisis the main countermeasures, and draw some inspiration. In the case of deterioration of the world economy, sluggish external demand market, the high dependence on foreign trade in Indonesia’s export trade between the two countries have been a great impact on the decline in exports led to the deterioration of the other real economy indicators; the world economic recession has led to Indonesia’s stock market crash, assets shrink; devaluation of the dollar led to a relative appreciation of the RMB and the rupiah further cause deterioration in Indonesia’s bilateral foreign trade.The global financial crisis had little impact on the financial sector in China and Indonesia, the main combat between the two countries, the real economy, the thinking commence. In addition to the introduction, the paper is divided into five parts.The first part is the theoretical framework section. This section introduces the theory of financial crisis, the real economy and virtual economy, the theoretical model of the financial crisis on the real economy, describes the three theoretical models: theoretical models of the Fisher model of Keynesian theory and the theoretical model of Minsky, as well as the financial crisis on the real economic impact of the conduction path.The second part reviews the instance of the Asian financial crisis on Indonesia’s real economy. The world’s no other developing countries, groups like the Southeast Asian economies, rapid economic growth, poverty reduction nearly two-thirds of rapid integration into the world market, to improve people’s living standards, per capita income quadrupled. Known as the "Southeast Asian miracle" from such a dramatic and sudden shift to the Asian financial crisis. People’s assets have suffered serious losses, companies going bankrupt and private investment in equipment is drastically reduced. Indonesia, the economic and political have been a serious impact, economic crisis, political crisis and the financial crisis is intertwined with simultaneously.The third part is the focus of this article; mainly through a large number of informative data comprehensively and systematically shows how external shocks brought about by the global financial crisis affect the real economy in Indonesia. This section is described from two aspects. The first aspect, describes the overall economic situation in Indonesia, mainly from the decline of Indonesia’s GDP quarterly data, type of expenditure, and industrial structure analysis of the contribution rate to economic growth. The second aspect, namely, a detailed description of Indonesia’s international trade, investment, industrial and consumption changes. Pursue long-term opportunity to seize the international industrial transfer, the development model of export-oriented and resource-processing strategy "shift from import substitution and resource development strategy, so that Indonesia will become a dependence on foreign trade in countries with higher export has been Indonesia’s economy important engine of growth. Reduction in exports, reduce the national income through a multiplier effect. The investment is also driven the national income is an important factor to increase the investment can be multiplied to promote economic growth, in turn, will accelerate the economic recession. Decline in production capacity and domestic and foreign decline in the ability of the two market demand led to the bankruptcy of large numbers of Indonesian enterprises, rising unemployment, the declining number of effective demand, resulting in reduced consumer spending. Exports, investment and consumption is the "Troika" to promote economic growth, they are at the same time reduced, resulting in recessions and depressions of the Indonesian economy as a whole.The fourth part is also the focus of this article; this section describes the Indonesian government to deal with the main measures taken by the global financial crisis. Set up special team collaboration by government, banking and business circles of the world economic crisis impact on Indonesia’s care and continuity of fiscal and monetary policy to stimulate the development of industrial economy, and establish clear laws to attract foreign industrial investment, vigorously develop the high-tech industries. Indonesia’s central bank and government mainly used in conjunction with expansionary monetary policy and expansionary fiscal policy to rescue the market. Its expansionary policy indeed improve in the second half of2009, Indonesia’s real economy indicators, inhibiting the further decline of the domestic economy, but also lay hidden dangers of inflation and government deficit.The fifth part is a summary of the article, to learn from the Indonesian government policy recommendations drawn Implications for China of the global financial crisis. Some suggestions for China’s economic recovery and development.