Introduction
In the 1960s, the economy of Indonesia deteriorated due to political instability. This led to increased poverty and hunger. In the mid 1960’s the economy was in bad shape with 1000% inflation, minimal investment, low export revenues, poor infrastructure and companies were operating at a very low capacity.
When the president Sukarno failed the new order administration worked hard and brought the Indonesia’s economy back on track in the mid 1960’s. The recent government brought an extent of discipline in economy which reduced inflation, suspended foreign debt, helped to stabilize the currency, engrossed foreign aid and investment (Fane, 2003).
The raised oil prices made the economy of Indonesia to grow with a 7% from 1968 to 1981. GDP per capital grew at 545% from 1970 to 1980 as result of increased oil export revenues. The economy growth since then has been accelerating. Despite this growth there are problems that keep dragging economic growth behind.
These includes the wide spread corruption, low foreign investments, exploitation and destruction of natural resources, health issues among others (Natasha, 2001). This paper will focus on inflation, environmental issues and health issues as the biggest problems in Indonesia.
Environmental issues
The problem is due to large scale deforestation and wildfire; there is also over exploitation of marine resources, high population has contributed greatly to the environmental problems. Environment preservation is important as it contributes to economic development.
Good environment that is free from deforestation and pollution is good for agricultural production. Agriculture contributes to economic growth of a country. The increase in population in the country has resulted to a strain in the resources of the country to appoint that they have made the country fall in the trap of resources misuse. Deforestation and wildfires has contributed to desertification leading to hungry population (Miller, 1997).
A lot of money is being used to restore back the good environment and this has been leading slow economic development as a lot of money is being used in environment conservations and preservation.
In 1983, an area that was estimated to be equivalent of 30,000km2 or an amount of $10 billion was burnt in Kalimantan Timur Province as a result of wild fire; this affected the economy growth as it led to environmental disaster, other than China and United state, Indonesia comes in third as the major emitter of green house gasses; this can be attributed to the way they clear their bushes; by burning.
Air pollution in Indonesia is high and it is leading to public health issues. Inflammation of respiratory system is linked to air pollution and it greatly leading to death in Indonesia. Water quality in Indonesia is deteriorating as there are no good sewerage systems in urban area (Miller, 1997).
Health issues
Indonesia has a high population and many people are living with HIV/AIDS. This has great impact on healthcare systems in the country and it is leading to economic crisis and problems with resource allocation. HIV/AIDS has been affecting the productive age group between 15-45 years leading to early deaths and high population of orphans. This has led to increased poverty and food insecurity.
The drugs that are being used to reduce multiplication of the virus are also too expensive and this is affecting the country’s economic development. Tuberculosis is the second most communicable disease that is causing death in Indonesia. It is approximated that 175,000 people die due to tuberculosis each an every year.
Malaria is another disease that has remained a problem and causing many deaths every year. All this diseases are indeed a problem in economic development as a lot of resources are being allocated in their prevention and treatment (Fane, 2003).
Inflation
As a result of political exertions inflation has persistently been an economic predicament in Indonesia. The country has gone through very high levels of inflation estimated at 1000% inflation between1964 and1967. As a result the country suffered from harsh poverty and hunger.
Even though the economy improved swiftly under the new order government, inflation has constantly been greater than 10% per annum (World Bank, 2008). Though the economy grew as a result of high revenue from oil exports, inflation has persisted leading to wider economic gap among Indonesians.
Inflation has been higher than economic growth and this has lead to high level of poverty. The government has been attempting to lessen inflation during economic recuperation and development. In the year 2010, inflation was at 7% higher than economic growth which was 6%.
This is greatly affecting Indonesians especially middle class who cannot afford to buy food when prices increase. This is indeed a problem in Indonesia as it is leading to increased poverty (Natasha, 2001).
Policies
In environmental issues the government introduced plantation of trees to cover for deforestation. The plantation trees included coffee, palm and rubber. This was in attempt to replace the original forest cover although it was not that successful. In the mid1980s the government joined World Bank to develop forestry management plans.
This led to first forest inventory, development of national parks and conservation programs, seminal forestry plans and development of master plan by food and agriculture organization of United Nations (Miller, 1997). Use of fire to clear land for agriculture has been prohibited as it has been leading to emission of greenhouse gases.
Efforts are being put to reduce deforestation and forest degradation although this has not been successful because of increased population and industrialization. Human activities are increased due to high population that is demanding large lands for agriculture.
This puts environment at risk leading to desertification and low rainfall thus agricultural produce is reduced leading to a hungry population (Deutser, 2002).
In health issues, polices have been put in place to prevent diseases such as HIV/AIDS, Tuberculosis and malaria as they are leading to high morbidity and mortality rates in Indonesia. When the economy grew from 1968 to 1998 the government invested in prevention and curative measure in health and this lead to reduction in mortality rate from142 per1000 in 1968 to 50 per 1000 in 1998.
The economic crises have lead to slow development in health systems. The administration has taken extraordinary steps in defending the health of its populace by transforming its seventy five year plan, but the progress in resolving health problems has been dawdling (World Bank, 2008).
In communicable diseases the government has introduced programs like population education on these diseases with the aim of prevention. All age groups are being educated on communicable diseases such as HIV/AIDS, Tuberculosis, sexually transmitted diseases, and malaria among others.
The population is being educated on their causes, prevention and they are being advised to seek medical attention on time in order to reduce mortality rate. Although Indonesia has prioritized health promotion and prevention of these diseases, the policies are being implemented very slowly and thus they are ineffective (Natasha, 2001).
To correct the inflation the new order administration put a lot of effort and this led to increased revenue from oil exports. This led to reduced inflation as economy grew rapidly.
The export oriented industrialization also assisted in dropping inflation. Though the economic development in Indonesia has been improving, inflation has not been eliminated completely because there was great impact on its economy during its political instability (Deutser, 2002).
Recommendation
To avoid environmental issues that are hindering economic growth, the government should invest in educating the population on importance of conserving environment. Environmental studies should be introduced to schools at an early stage to ensure the population learn the importance of environment to the country’s economy.
Heavy penalties and regulations should be put in practise for people charged with deforestation and polluting environment. Rules and regulations should be set on waste disposal for manufacturing companies to avoid environment pollution especially water pollution which leads to poisoning of fish.
To avoid health issues the government should hire more medical personnel to educate the population on prevention of communicable diseases. This will ensure all the population is well educated on prevention and this lowers the costs incurred in buying drugs for curing diseases which could have been avoided through prevention.
To avoid increased rates of inflation the government and politicians should avoid political instability recurring as it leads to high rate of inflation which has been hard to recover from. The government should encourage private and foreign investors in order to gain more revenue in effort to recover from inflation. Also export oriented manufacturing should be practised to earn extra revenue for the country.
Conclusion
The biggest problems in Indonesia have been environmental issues which has lead to degradation of environment. This has been mainly due to deforestation and wildfire. This has been leading to poor agricultural production and emission of greenhouse gases.
The government has put in place rules of reforestation which have not been applied because of high population. The population should be educated on importance of conserving the environment (Miller, 1997). Health issues have been another problem in Indonesia as they have lead to high mortality and morbidity rates.
The government has invested in preventive and curative measures though they have been implemented slowly due to few medical personnel compared to the high population. The government should employ more medical staff to educate population on prevention of communicable diseases.
Inflation is still a problem in Indonesia despite the continuous economic growth. The government should avoid recurrence of political instability which led to high inflation.
References
Deutser, P. (2002). Survey of Recent Development. Bulletin of Indonesian Economic Studies, 1(1).1.
Fane, G. (2003). Change and Continuity in Indonesia’s New Fiscal Decentralization Arrangements. Bulletin of Indonesian Economic Studies, 1(1).1.
Miller, J. (1997). Deforestation in Indonesia and the Orangutan Population. TED Case Studies, 1(1),1.
Natasha, H. (2001). Anti-Corruption Strategies in Indonesia. Bulletin of Indonesian Economic Studies, 1(1),1.
World Bank. (2008). Indonesia: Economic and Social update. Retrieved from www.worldbank.org