| Author | Arif, Muhammad Tasrif |
| Call Number | AIT RSPR no. IE-85-2 |
| Subject(s) | Oil industries--Indonesia
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| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Engineering, School of Engineering and Technology |
| Publisher | Asian Institute of Technology |
| Abstract | Oil revenues give Indonesia an opportunity for rapid economic growth. The revenues provide financial resources to stimulate the economy, increase Indonesian Government spending, increase investment, and import the necessary goods and services to accelerate economic growth. However, this rapid economic growth is followed by a rapid increase in domestic oil consumption that is aggravated by an oil subsidy, leading to increasing dependence on oil resources. When the oil runs out, the Indonesian economy will go through a transition into an oil-independent era. This study is an attempt to understand the process and the mechanisms of economic growth in an oil dependent economy, in particular the Indonesian economy from 1970 to 2030. In this study, a generic system dynamics model is constructed to analyze the transition. The model is developed based on a common macroeconomics model and considers market clearing mechanisms. The model also represents the physical structure of the economy and the decision making structure of the various actors in the system. Model simulation is used to examine alternative policies to achieve a smooth transition. In order to achieve a smooth transition, four main policy instruments are considered in this study. Those policies are (1) increase government spending, (2) encourage investment, (3) restrict imports and expand non-oil exports, and (4) introduce flexible specialization. The first three policies have been proposed and implemented in developing countries for improving their economic conditions over the past few decades. Among those policies, the study shows that in the long run the technological environment which is represented by the fourth policy is the most important one to sustain growth. |
| Year | 1985 |
| Type | Research Study Project Report (RSPR) |
| School | School of Engineering and Technology (SET) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Industrial Engineering (IE) |
| Chairperson(s) | Saeed, Khalid |
| Examination Committee(s) | Vrat, Prem ;Frausum, Yves G. Van |
| Scholarship Donor(s) | ASEAN-USAID |
| Degree | Research Studies Project Report (M. Eng.) - Asian Institute of Technology, 1985 |