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NIM 12016002075
UNIVERSITAS KATOLIK INDONESIA No. Urut 3
Tandatangan
Mahasiswa
APRIYANTO
12016002075
MASTER OF BUSINESS ADMINISTRATION PROGRAM
ATMA JAYA CATHOLIC UNIVERSITY OF INDONESIA
A. Case #1
1. Explain why economic growth is important to our economy.
The impact of robust economic growth can keep the economic outlook for
Indonesia remains on the positive side, a low current account deficit and
unemployment, a conservative government deficit, inflation at a record low,
double-digit real wage growth, accommodative monetary policy and higher
commodity prices that helped increase household consumption and investment
and exports rebounded.
3. Do you agree that Indonesia economy remain strong? Explain the factors
influencing the strengthens of Indonesias economy.
Yes, Indonesia economy remain strong, with robust economic growth, a low
current account deficit and unemployment, a conservative government deficit
and inflation at a record low. Real wage growth, accommodative monetary
policy and higher commodity prices helped increase household consumption
and investment and exports rebounded in the fourth quarter of 2016. With an
increase in commodity prices, offers an opportunity for Indonesia to solidify its
recovery and secure stronger growth in the longer-term.
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B. Case #2
1. Why does Bank Indonesia need to coordinate with the Government (hence,
the Ministry of Finance) on controlling inflation and money supply in
Indonesia?
Bank Indonesia need to strengthen coordination with the Government,
focusing on controlling inflation within the target corridor as well as
accelerating structural reform programs to support sustainable economic growth
and strengthen policy coordination with the Government to control inflation in
response to several risks, including further adjustments to administered prices
(AP) as the Government continues to reform energy subsidies as well as
inflationary pressures on volatile foods.
When the interest rates on working capital loans, investments loans, and
consumer loans decreased, there is a surplus of money at the prevailing interest
rate. In order to get people in the economy to be willing to hold the money, the
interest rate must decrease. The increase in the money supply will make some
people deposit some of their money in banks. Therefore, excess reserves will
increase and banks will want to lend more. Banks will lower interest rate to
motivate borrowing. This will increase investment and consumption and
therefore aggregate demand will increase.
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C. Case #3
1. Discuss characteristic of unemployment in urban and rural areas in
Indonesia as provided in the case.
Most of the people that lost their jobs in urban areas during the crisis went
to join the informal sector in the rural areas (particularly in agriculture). It is
estimated that between 55 and 65 percent of employment in Indonesia can be
called informal that mostly concentrated in the nation's rural areas, particularly
in the construction and agriculture sectors. Urban unemployment exceeds rural
unemployment as people continue to move to the cities in search of employment
opportunities. A characteristic of Indonesia is that the unemployment rate is
highest for people between the age of 15 and 24, far above the country's national
average. And the higher the education degree, the lower its share towards
Indonesia's workforce. In recent years, however, there is a changing trend
visible: the share of higher education degree holders rises, while the share of
those that went to primary school only decreases.
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D. Case #4
1. Government introduced tax amnesty program in July 2016. Explain
Indonesias tax revenue realization following the tax amnesty.
Despite a better-than-expected tax amnesty program the tax revenue target
of Indonesia in 2016 was not achieved, by a distance. Indonesia's tax revenue
realization in 2016 reached IDR 1,283.6 trillion but in the Revised 2016 State
Budget authorities targeted IDR 1,539.2 trillion, implying a shortfall of IDR
255.6 trillion last year.
2. Tax revenue in Indonesia has always been low. Elaborate factors which
may cause the situation and what could be done to improve tax revenue in
Indonesia.
Tax revenue in Indonesia has always been low. In fact, the country has one
of the lowest tax-to-GDP ratios worldwide. Firstly, tax compliance is low. Only
around 28 million Indonesians - out of an adult population that numbers over
185 million people - are registered as taxpayer. However, only 10 million
actually fulfilled their tax obligations. According to information from the
Ministry for Economic Affairs, a total of at least 44 million Indonesians should
pay taxes. This indicates rampant tax evasion. The informal sector - both rural
and urban - still plays an exceptionally big role in the Indonesian economy
estimated that between 55 and 65 percent of employment in Indonesia can be
called informal, that means they shouldnt pay taxes.
Secondly, tax evasion is made possible by weak government monitoring and
weak law enforcement in Southeast Asia's largest economy. Moreover, it is
assumed that a significant portion of tax money ends in the pockets of
government officials (which also makes Indonesians unwilling to pay taxes).
But apart from (perceived) corruption, there is also a shortage of tax officials
mainly due to budget constraints and bureaucratic hurdles. There are currently
only 37,000 Indonesian tax officials, implying that there is one tax official for
each 7,000 Indonesians, an alarmingly weak ratio compared to other countries.
The country needs at least 62,000 more tax employees.
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