Ethan Niederhauser

Analysis
GDP per Capita: Australia-$65,400, Indonesia-$11,100
According to the data, Indonesia is on a steady track to increasing their standard of living.
The country exports more than it imports, they have a strong workforce capability with
low tax rates, as well as a GDP growth rate that is double that of Australias. One thing
that makes it strikingly similar to a first world country is consumption. In countries like
the U.S. and Australia, GDP is so large because of a high percentage of purchases. As
seen in the chart, both of these developed nations import almost twice as much as they
export. Household consumption can make up as much as 60-70% GDP in these countries.
In Indonesia, household consumption makes up 57% of GDP, making it seem like more
of a developed nation than that of its current developing status.
These facts aside Indonesia still is a developing country, having 11% of the
population below the poverty line, and as of 2015 a 6.4% inflation rate. It also should be
mentioned that though it is ranked in the top 100 on the freedom index, there are still
areas that need improvement. So where the contrast between these two countries is
somewhat astounding, with the growth being seen right now, Indonesia should be very
optimistic about its future.
Taxes and Other Revenues: Indonesia-13.10%, Australia-34%
Based on my readings of the Indonesian governmental structure, a few things stick out.
One is that the government seems to act more like a republic than a democracy, with
much of the representation coming from provincial legislation. Another thing is that there
is not much evidence of big government. Sure there is plenty of regulation, placing the
country in #99 on the freedom index. But based on its infrastructure report, the country is
still not quite there with improving things such as its transportation needs, with only a
third of airport runways paved, and barely half of all of its roads paved. Australia
however has a much higher amount of roads and airport runways, and a drastically higher
percentage of them are paved. Australia also seems to lean more in the social democratic
direction, thus spends more on social programs. In conclusion, Indonesias developing
status means that there is less government spending on infrastructure and social
programs, therefore less taxes are levied upon the people.
Gross National Savings: United States-14.1%, Indonesia-32.5%
Over the last twenty years, Indonesia has experienced high to low levels of inflation,
especially in 1998, where the rate of inflation was as high as 80%, and then promptly
dropped to 2% the next year. All of this uncertainty, as well as an ever-fluctuating price of
food and oil has compelled Indonesian people to save more of their earnings. This
coupled with the facts that the country still struggles with tackling poverty and
unemployment have created an atmosphere of uncertainty in the economy.

All of this aside, as stated earlier, Indonesia is becoming more and more of a
consuming nation, with household consumption equaling that of 57% GDP. As high as
that is though, the United States is running at close to 70% consumption, putting over
13% more of the cash back into the system than in Indonesia. Perhaps the U.S. saves too
less and spends too much, but I also think that Indonesians should be spending more of
what they save. Doing this puts the money back into circulation, and would ultimately
benefit the economy and create more profit among local bussinesses.
Health Expenditures (% of GDP): United States-17.10%, Indonesia-2.8%
For the United States, this is kind of a big deal. One can easily argue that the reason we
spend so much is the fact that our system is so advanced and thus costs are more. But the
facts are this, the reason we spend money on healthcare is to help us and our children live
longer. Where we spend in worth 17% of our GDP on healthcare we get a 79-80 year
average life expectancy. Indonesias life expectancy seems at first, considerably lower at
72-73 years, but they spend close to a tenth on healthcare than we do, which Id like to
point out, puts them only a few years behind the U.S. in life expectancy. A tenth of the
cost verses an even smaller margin of life expectancy.
But on the other hand, yes they are a developing country, so their healthcare is not
as advanced as in the United States or Australia. There is also the fact that in Indonesia
there are an estimated 0.2 physicians for every 1,000 people, as opposed to the Unites
States 2.45 physicians per 1,000 people. This would in part explain the considerably
larger infant mortality rate in Indonesia than that of a developed nation.