A Dirty Word? Neo-liberalism in Indonesia's foreign economic policies

By Alexander C. Chandra on September 7, 2011

Neo-liberal economic ideology is once again in the spotlight in Indonesia.

Although in principle neo-liberal ideology has never featured much in the history of Indonesian foreign economic policy (FEP), the same cannot be said about current Indonesian FEP. Both external factors (e.g. the changing global and regional economic environment) and internal factors (e.g. the emergence of new intellectual groups and individuals keen to promote economic reforms) are central to the promotion of neo-liberal economic ideology in the country. While it remains to be seen whether the market reform agenda is good or bad for the country, one thing is certain: there is a significant gap between the more socialist approach on which the Indonesian economy is supposedly based and the neo-liberal principles embedded in the economic policies that nearly all post-reform governments have pursued. As a result, the paper argues for the need for Indonesia to revisit its constitution so as to allow more flexibility in its economic policy-making process.

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IISD, 2011