A new OECD publication highlights notable economic and environmental benefits of phasing out fossil-fuel subsidies in Indonesia. Interestingly, the study is based on the context that pertained until mid-2014, when international oil prices where high and before the recent phase-out of subsidies by the government.
Taxes on wages have risen by about 1 percentage point for the average worker in OECD countries between 2010 and 2014 even though the majority of governments did not increase statutory income tax rates, according to a new OECD report.
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Weaknesses in good regulatory practice remain a key challenge for improving government effectiveness, achieving greater coherence between different laws and regulations (both domestically and vis-à-vis other countries) and, ultimately, making it easier to do business in Indonesia.
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Poor corporate governance was identified as a major factor in Indonesia’s economic crisis in 1997. Since then a wide range of laws and regulations have been introduced and standards developed. Sound corporate governance will reassure stakeholders that their rights are protected, thus building confidence and trust in doing business in Indonesia.
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Infrastructure investment in Indonesia was seriously impaired by the 1997 Asian financial crisis. Indonesia plans to increase investment sharply through both public spending and private finance. Yet, Indonesia lacks suitable long-term investment vehicles and capital markets are still developing.
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Over the past years, Indonesia has implemented a number of trade and investment measures to develop local industries and move its firms up the value chain, but these measures have raised concerns in many of its trading partners.
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Corruption is perceived as a more severe problem in Indonesia than in many other countries. While international corruption indicators suggest some improvement, Indonesia needs to address gaps in integrity and anti-corruption laws, policies, and implementation to ensure continuing progress.
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Properly addressing the issue of food security will require an effective policy platform that can respond to a diversity of food insecurity scenarios, rather than focusing policy attention on domestic production of staple foods.
This report develops an analytical framework that assesses the macroeconomic, environmental and distributional consequences of energy subsidy reforms. The framework is applied to the case of Indonesia to study the consequences in this country of a gradual phase out of all energy consumption subsidies between 2012 and 2020.
The Indonesian education system is immense and diverse. It reflects aspects of its past, with a diverse ethnic and religious heritage, and a struggle for national identity.