Economic Growth and Sustainable Development in Indonesia: An Assessment *

Robi Kurniawan, Shunsuke Managi

Research output: Contribution to journalArticle

13 Citations (Scopus)

Abstract

We explore the nexus between sustainability and economic growth in Indonesia between 1990 and 2014, using an inclusive wealth framework that covers the country’s unique resources and biodiversity. Indonesia’s inclusive wealth growth is considered positive. However, the ‘dilution effect’ on Indonesia’s population has outpaced the country’s wealth growth, so that its per capita inclusive wealth growth has been negative. This study implies that the GDP per capita growth in Indonesia does not necessarily indicate sustainability. The depreciation of both renewable and non-renewable natural capital is driving the decline in wealth per capita. Despite this, sustainability has been improving, although marginally, due to increases in the rates of produced and human capital growth. To return to a sustainable growth path, Indonesia must increase its investments to a net gain in the rate of wealth growth, and it must reduce its resource extraction to levels that its productive base can maintain.

Original languageEnglish
Pages (from-to)339-361
Number of pages23
JournalBulletin of Indonesian Economic Studies
Volume54
Issue number3
DOIs
Publication statusPublished - Sep 2 2018

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics

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