hist proj - Kevin Taylor History 100 Final Project Section...

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Kevin Taylor History 100 12/10/07 Final Project Section 1: Nike shoes from Indonesia Indonesia is a country that has seen major political and economic changes over the last half century. From 1945 until 1967, Indonesia was ruled by its first ever president, Sukarno. Sukarno was a leader who openly denounced western capitalists and went so far as to nationalize entire sectors of the economy. Sukarno was so opposed to western imperialism that he stopped receiving food shipments from the United States even though his country was in the midst of a famine (Commanding Heights: Indonesia). Policies such as this created enemies both foreign and domestic for Sukarno. A major opposition leader was a general in the Indonesian army named Suharto. With the backing of western countries like the United States and Great Britain, Suharto led an extraordinarily bloody coup to seize control of Indonesia. During this time, Suharto had nearly every member of the Communist party executed, imprisoned, or exiled. At this time, the Communist party was composed of approximately 3 million members (Commanding Heights: Indonesia). Once Suharto had control of Indonesia, he put into place new policies that reduced the role of the state, and at the same time, encouraged foreign investment. While Suharto opened the country’s economy to outside influences he was not initially supportive of unlimited access. The state still protected key industries and limited foreign ownership. During the late 1970s the state regained more power, led by the state-owned
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oil conglomerates, which reaped huge profits with rising oil prices. However, with the falling oil prices in the 1980’s, World Bank led reforms resulted in the deregulation of banking and trade. Before long, Indonesia became a center for foreign investment. Suharto enacted labor laws that were favorable to multinational corporations, and privatized the country’s natural resources. This allowed for strong growth in the economy that was becoming more and more export driven. This prosperity lasted until financial crisis swept the region, and foreign investors panicked. As the situation worsened, Suharto was forced to step down, amid accusations of corruption. Huge debts were accumulated during this period, and the IMF stepped in an effort to bring some stability to the region. The IMF influenced many policies that encouraged foreign investment and
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hist proj - Kevin Taylor History 100 Final Project Section...

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