In the wake of the Asian financial crisis, Indonesia experienced severe economic contraction and steep devaluation of the rupiah. The consequent problems for economic reform policy were compounded by political turmoil.
Through the Partnership for Economic Growth (PEG), a USAID-funded project, Nathan Associates helped the Government of Indonesia liberalize its economy by implementing and improving an International Monetary Fund and World Bank reform package on various policy fronts.
Building Capacity in Ministries
Our advisory team supported counterparts in five ministries: BAPPENAS, Indonesia’s economic planning agency; the Ministry of Industry and Trade; Bank Indonesia; the Ministry of Cooperatives; and the Ministry of Justice. We
- Performed economic studies and policy memoranda on domestic trade, international trade, and small and medium enterprise finance;
- Analyzed the content, construction, and application of a monthly Industrial Production Index for Indonesia’s Central Bureau of Statistics;
- Studied local budget expenditures and national-provincial fiscal relations, and monetary rules for Bank Indonesia; and
- Administered the PEG Grants Program.
PEG’s Grants Program funded US$5 million for policy research on Indonesia’s economic reforms. Nathan Associates administered the grants procedure, processed applications, and negotiated and executed grants.
Each grantee represented a partnership between an Indonesian and a U.S. institution, such as universities, government departments, public and private think tanks, and research organizations.
These partnerships help build Indonesia’s capacity to formulate and implement economic reform policies and practices and to build dialogue between the public and private sectors on policy.