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Indonesia final - An overview of the country and an approach to its business environment BUS 187 Global Dimensions of Business R Kepple Section 5

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An overview of the country and an approach to  its business environment BUS 187 Global Dimensions of Business R. Kepple Section 5 Table of Contents Chapter 1: Overview of Indonesia                     Page 3 - Economy ----------------------------------------------- 3 - Business Cycle (w/ implications)------------------  5 - Business Opportunities ----------------------------- 9 - Trade Policy and FDI --------------------------------13 1
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- Tariffs and Quotas ---------------------------------- 16 Chapter 2: Lifestyle and Culture                          18 - Culture Context ------------------------------------- 18 - Competitive Society --------------------------------- 19 - Standard of Living ---------------------------------- 23 - Cost of Labor ---------------------------------------- 25 Chapter 3: Politics                                              32 - Political System ------------------------------------- 32 - Political Culture-------------------------------------- 33 Chapter 4: Money Market                                    34 - Central Bank ---------------------------------------- 34 - Riot of 1998 ------------------------------------------ 36  - Inflation ----------------------------------------------  37 - Gross Domestic Product---------------------------- 39 - Currency Valuations -------------------------------  40 - Balance of Payments ------------------------------- 41 Chapter 5: A Strong Foundation                          43 - Protected Industries -------------------------------- 43 - Natural Resources ---------------------------------- 46  References -------------------------------------------  49 Chapter 1: Overview of Indonesia 2
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Economy Much of the reason why Indonesia is currently facing economic troubles is due to  the strong GDP growth between the late 1980s and 1990s. Due to this sudden growth  there was a need for a quick economic reform. This led to the toleration of many  distortions that were the main reason for the crash of 1997-1998. The economy became  very dependent on imports and in property development; meanwhile, they neglected  manufacturing on their own soil. The effects of all this importing had been that it created  the widening of current-account deficits and large scale foreign borrowing. Much of this  borrowing which was done by the banking system at the time was going through a tough  transitional period, but it was short-term. Now with the responsibility of paying off all of  their debt obligations, their interest-rate structure went through a sudden change which  had a negative impact on the real economy.    Following the crash of 1997-1998 the International Monetary Fund (IMF) held a 
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Indonesia final - An overview of the country and an approach to its business environment BUS 187 Global Dimensions of Business R Kepple Section 5

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