Indonesia’s Economic Performance in Comparative Perspective, and a New Policy Framework for 2049

Indonesia began its war for economic development in 1949 after winning the war for political independence that started in 1945. This is a speculative paper because it is the exploratory paper of the planned Indonesia 2049 project which asks whether Indonesia’s war on economic development would be won after one hundred years. We compared various dimensions of Indonesia’s economy with those of two oil exporters (Mexico and Nigeria), three large populous developing economies (Brazil, China and India) and three Southeast Asian neighbors (Malaysia, Philippines, and Thailand). Indonesia’s post-1965 economic performance was very good when compared with its own pre-1965 period, was above average when compared with the other eight countries, and was slightly below average when compared with the East Asian economies. Our tentative conclusion is that a new economic policy framework should be adopted in the second SBY administration to ensure that Indonesia in 2049 would be close to achieving the dreams of the Generasi 1945. This new policy framework must go beyond the twin Washington Consensus prescriptions of “getting prices right�? and “getting institutions right�? to include actions like “getting the role of science right�? and “getting the conception of the reform process right�?.