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2018 OECD Economic Surveys: Indonesia 2018

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Indonesia's steady economic growth, with help from government policies, has raised incomes and lowered poverty rates to record lows. Prudent macroeconomic policies have contributed to economic stability, muted inflation and limited government debt. However, government infrastructure investment and social spending is constrained by low revenues. There is ample scope to grow revenues by strengthening the tax administration to raise compliance and broadening tax bases. Indonesia has a youthful population that will boost growth in coming years. Reaping the benefits requires shifting the employment mix towards better jobs in the formal sector. That, in turn, means tackling informality and raising skill levels, including through further structural reforms and better quality education. Indonesia's wealth of natural resources and rich cultural diversity offer many opportunities to grow tourism across the country. The recent surge in arrivals is generating export revenue but it is also increasing pressure on the environment. Developing tourism more sustainably will involve investing in skills and supporting infrastructure accompanied by local stakeholder involvement.

SPECIAL FEATURES: TAX POLICY; SUSTAINABLE TOURISM

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Basic Statistics of Indonesia, 2017

(Numbers in parenthesis refer to the OECD average)a

This Survey was prepared in the Economics Department by Christine Lewis and Patrice Ollivaud under the supervision of Peter Jarrett and Vincent Koen. It has benefited from valuable background research by Rita Helbra Tenrini, seconded from the Indonesian Ministry of Finance. Peter Haxton and Jarmila Botev also contributed to the Survey. Statistical research assistance was provided by Klaus Pedersen and editorial assistance was provided by Elisabetta Pilati. The previous Survey of Indonesia was issued in October 2016.The Survey was discussed at a meeting of the Economic and Development Review Committee on 10 September 2018 with participation of representatives of the Indonesian government and representatives of France and Hungary as lead speakers.The Survey is published under the responsibility of the Secretary-General of the OECD.Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at www.oecd.org/eco/surveys.

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