Index
A
Active labor market policies, 59
AEOI. See Automatic exchange of information
AFC. See Asian financial crisis
Ahuja, Ashvin, 143–44
AIPEG. See Australia Indonesia Partnership for Economic Governance
Aliber, Robert Z., 21
Allmen, Ulric Eriksson von, 18
AML/CFT. See Anti–Money Laundering/Combating the Financing of Terrorism
Ananta, A., 3
Andriani, Yessy, 30
Andrle, Michal, 153
Anti-Corruption Committee (Komisi Pemberantasan Korupsi) (KPK), 35, 42
Antidumping tariffs, 43
Anti–Money Laundering/Combating the Financing of Terrorism (AML/CFT), 293
Antimonopoly law, 42
Arifin, S., 3
ASEAN. See Association of Southeast Asian Nations
ASEAN-5. See Association of Southeast Asian Nations-5
Asian Bond Fund, 43
Asian Development Bank, 138
Asian financial crisis (AFC), 13, 14, 16, 21–44, 39t, 163, 164f
banks and, 25, 30–32, 37–38
BI in, 37–38
commodity prices after, 174
corruption and, 35–36
countercyclical fiscal policy in, 28
credit intermediation after, 237
cronyism and, 35–36
exchange rate and, 22, 24, 25–27, 34–35
FDI after, 164, 168
financial sector after, 168–71, 169f, 171f, 174, 229
financial stability in, 27–28
fiscal policy and, 32–34
foreign currency debt after, 171, 171f
global economy after, 164–71, 169f
inflation in, 24f
interest rate in, 27, 29
monetary policy and, 34–35
real GDP growth after, 172, 173f
safety nets in, 28
trade after, 164–68, 165f–67f
TT and, 21–29
unemployment after, 178
Asian Tigers, 164, 164n4
Asset turnover ratio, 54f
Association of Southeast Asian Nations (ASEAN), 3
exports by, 188, 188f
FTAs with, 192, 192n2
fuel excise tax in, 125–26, 125f
property tax in, 126
VAT in, 118
Association of Southeast Asian Nations-5 (ASEAN-5), 16, 16n 7
China and, 149–56, 151f, 152f, 154f, 155f
exports by, 144, 145f, 156–59, 157f–59f
financial sectors of, 159, 160f
international spillovers to, 143–61
trade by, 144–47, 145f, 146f
VIX for, 150f
Audits, for tax compliance, 131
Australia Indonesia Partnership for Economic Governance (AIPEG), 138n11
Australian Government Partnership Fund (GPF), 138n11
Automatic exchange of information (AEOI), 123
for tax compliance, 132–33
Availability Payment scheme, 78
B
Balance of Payments and International Investment Position Manual, of IMF, 252
Balance sheet approach (BSA), 249–61
for capital outflows, 258, 258t
for exchange rate depreciation shock, 256–58, 257t, 258t
GFS and, 256
matrix for, 251–58, 253t, 255t, 256f
scenario analysis for, 256–58
VAR for, 258–61, 259t, 260f
Balancing funds, 34
Balassa, B., 208
Bank Century, 28, 28n6
Bank for International Settlements (BIS), 32, 41
Triennial Central Bank Survey of, 232
Bank Indonesia (BI), 25, 26, 26n4
in AFC, 37–38
DFS and, 246
fintech and, 243–44, 246
floating exchange rate and, 28n8, 35
full authority of, 30
FX and, 41, 242, 275
inflation and, 30, 35, 38, 40–41
interest rate by, 27, 28, 40–41
as lender of last resort, 40
liquidity and, 28, 35, 40, 232, 272
minimum holding period for, 213–14
monetary policy of, 34–35
money markets and, 241
OJK and, 293
repurchase agreement and, 241, 241n8
safety nets and, 42
in TT, 28, 29
Bankruptcy laws, 42
Banks
AFC and, 25, 30–32, 37–38
blanket deposit guarantee for, 30, 40, 41
capital outflows and, 27
CAR for, 41
corruption and cronyism in, 35–36
D-SIBS, 272, 275–76, 284, 295
economic reforms of, 30–32, 38
financial stability of, 275–80, 277f, 279f
GDP and, 231
leverage of, 25, 37
liquidity of, 25, 277–78, 284
loan-to-deposit ratio in, 25, 30–32, 31t
net interest margins for, 237–38, 238f
profitability of, 275–76
real-time gross settlement for, 42
recapitalization of, 30–32, 40
resilience to shocks by, 281–87, 282f, 283f, 285t, 286f, 286t, 287f
risk management for, 291
safety nets for, 30
supervision of, 291–92
system structure for, 275t
vulnerabilities of, 25, 35
World Bank on, 237
See also Central banks; Nonperforming loans; specific banks
Bantuan Siswa Miskin (BSM), 99
BAPPENAS. See Ministry of Home Affairs, the National Development Planning Agency
Barnes, Sebastian, 51
Basel Core Principles for Effective Banking Supervision, 32, 41, 282n3
Basel III, 271, 288
Basri, Muhamad Chatib, 3, 14, 22, 22n1, 24, 25, 32, 35–36, 37, 174n21
Belt and Road Initiative, 11
Bergas untuk Rakyat Miskin (RASKIN), 99
BI. See Bank Indonesia
Big data, 10
BIS. See Bank for International Settlements
Blanket deposit guarantee, for banks, 30, 40, 41
Boards of commissioners (BoC), 289–90
Boards of directors (BoD), 289–90
BoC. See Boards of commissioners
BoD. See Boards of directors
Bond market, 233
corporations in, 250
for NFCs, 235
for SOEs, 246
See also Government bonds
Bond Market Development Program Team, 242
Booth, A., 3
Bottom-Up Default Analysis (BuDA), for corporations, 265–66, 265n8
Bouis, Romain, 51
BPN. See National Land Agency
Brazil, Russia, India, China, South Africa (BRICS), 51
fuel excise tax in, 125–26, 125f
Gini coefficient of, 98
structural reforms and, 61
BSA. See Balance sheet approach
BSM. See Bantuan Siswa Miskin
BuDA. See Bottom-Up Default Analysis
Budget deficit
GDP and, 29, 32, 33f
portfolio inflows for, 36
restrictions on, 44
state debentures for, 42
of US, 36
C
Capital adequacy, assets, management capability, earnings, liquidity, and sensitivity (CAMELS), 32, 32n9, 41, 41n13
Capital adequacy ratio (CAR), 25, 286f
for banks, 41
economic reforms for, 30
stress-testing for, 283f
Capital flows, 43
determinants of, 211–26
Capital inflows, 17
developments in, 211–16, 212f–16f
drivers of, 221–24, 222t, 223f, 225t
fiscal deficit and, 211
GARCH for, 223–24, 225t
after GFC, 217
from government bonds, 17, 213–15, 214f–16f
interest rates and, 211
panel analysis for, 222–23, 222t
from portfolio inflows, 17, 212–13, 213f, 214f
See also Foreign direct investment
Capital Investment Coordinating Board, 42
Capital Market Infrastructure Development Program Team, 242
Capital markets, 213, 229, 231, 242
Capital outflows
banks and, 27
BSA for, 258, 258t
floating exchange rate and, 34–35
portfolio investment and, 37
VIX and, 149
CAR. See Capital adequacy ratio
C-efficiency ratio, 88
Central Bank Acts, 42
Central banks
LCY government bonds and, 219
long-term inflation and, 35
Chan-Lau, Jorge, 18, 265n8
Chicago Board Options Exchange Volatility Index (VIX), 149
for ASEAN-5, 150f
credit default swaps and, 224n7
GARCH and, 224
for stock markets, 259
VAR and, 260–61
China
commodity exports to, 12, 187, 191, 192f
commodity prices and, 148
exchange rate and, 213
exports to, 17, 191
policy shock in, 155, 155f
private demand shock in, 154, 154f
RCA of, 195
real GDP growth in, 175
rise of, 11–13, 11f
slowdown of, 149–56, 151f, 152f, 154f, 155f
spillovers from, 16, 143–47, 146f, 147f, 149–56, 151f, 152f, 154f, 155f, 250
tax reform in, 102, 104f
trade with, 144–47, 146f, 147f
See also Brazil, Russia, India, China, South Africa
Choleski decomposition, 259
Chung, Kyuil, 221
CIT. See Corporate income tax
CLNs. See Credit-linked notes
Coady, David, 52
Coal, 17, 188, 189
Combo Card, 243
Committee for Acceleration of Priority Infrastructure Delivery (KPPIP), 70, 78, 78n6, 96
Commodities supercycle, 4, 6, 17, 187, 211, 212
Commodity exports, 17, 143, 188–89, 189f
to China, 12, 187, 191, 192f
destinations for, 205t–6t
Commodity prices, 16
after AFC, 174
exports and, 156, 188
IMF on, 182
spillovers from, 143, 148, 148f
terms of trade and, 148, 148f
Common Reporting Standard (CRS), of OECD, 132
Comparative advantage, 17, 193–200
Compliance, tax
audits for, 131
data-matching capability for, 131–32
DGCE and, 131–32
DGT and, 131–32
for employer withholding, 130
high-risk areas for, 128
for HWIs, 130
from MTRS, 116
tax reform for, 128, 129–33, 133f
for UHWIs, 130–31
for VAT, 92, 128, 129–30, 133n9
Compliance risk management (CRM), 132
Concessions, for infrastructure investment, 83
Construction Services Law No. 2, 56
Contracts, enforcement of, 57, 57n3
Corporate income tax (CIT), 15, 28, 71
exemptions to, 90
for inclusive growth, 88–91, 89f, 90f
MTRS and, 105, 121
tax reform of, 121, 122f
Corporations
in bond market, 250
BuDA for, 265–66, 265n8
debt of, 250, 262f, 263f, 264f
financing of, 235–36
FX and, 262–65
leverage of, 25, 37, 250, 261, 261f, 262f, 280f
NPLs of, 264, 264n7
profitability of, 287f
stress-testing for, 284
vulnerabilities of, 18, 261–66, 261f–64f, 267f, 278
See also Nonfinancial corporations
Corruption, AFC and, 35–36
Countercyclical fiscal policy, in AFC, 28
Credit bureaus, 246
Credit default swaps, VIX and, 224n7
Credit intermediation, 236–39
Credit-linked notes (CLNs), 218, 221f
Credit-to-GDP ratio, 275, 276f
Crisis management, 18, 295–96
See also Asian financial crisis; Global financial crisis
CRM. See Compliance risk management
Cronyism, AFC and, 35–36
CRS. See Common Reporting Standard
Currency depreciation, 169n11
Current account balance (or deficit), 5f
AFC and, 24
capital inflows for, 212, 213f
exports and, 36
FDI and, 36, 37
of India, 37
inflation and, 34
infrastructure and, 71–72
structural reforms and, 63
TT and, 25, 36–37
Curristine, Teresa, 15
D
Dabla-Norris, Era, 52
Dana Alokasi Khusus (DAK), 96
Dana Alokasi Umum (DAU), 95
Das, Mitali, 16
DAU. See Dana Alokasi Umum
Debt. See External debt; Foreign currency debt; Government debt; Leverage
Demographic dividend, 6–9, 8f, 8t, 9f
de Mooij, Ruud, 15
Deposit Insurance Corporation (LPS), 30, 41, 295
Depreciation, 27
of currency, 169n11
of exchange rate, 256–58, 257t, 258t
Derivatives markets, 246
DFS. See Digital financial services
DGCE. See Directorate General of Customs and Excises
DGT. See Directorate General of Taxation
Digital economy, 9–11, 10f
Digital financial services (DFS), 17–18, 238–39, 238n5, 239f, 247
e-money and, 242–43
Direction of Trade Statistics, of IMF, 208
Directorate General of Customs and Excises (DGCE), 112n3
tax compliance and, 131–32
Directorate General of Taxation (DGT), 112n3, 116n5
MTRS for, 133–35
tax compliance and, 131–32
tax reform of, 128–29
Diversification, of exports, 193–94, 194f, 195f, 208
Dizioli, Allan, 52, 144
Doing Business ranking, of World Bank, 50, 54, 93, 94t
Domestic systemically important banks (D-SIBs), 272, 275–76, 284, 295
Double tax agreements, 123
D-SIBs. See Domestic systemically important banks
Duan, J. C., 265n8
Duval, Romain, 51, 143
E
Economic complexity index (ECI), 198–200, 199f, 209
GVCs and, 200
Economic reforms, 4–6, 29–36
of banks, 30–32, 38
fiscal, 14
of fiscal policy, 32–34, 60–64, 62t, 87–107
for infrastructure investment, 70
to monetary policy, 34–35
weaknesses of, 110
See also Tax reform
Economist Intelligence Unit, 11
Education, 12
access to, 58–59
for financial literacy, 244
government spending for, 59f
inclusive growth for, 97–98, 97f
income inequality and, 52
inequality of, 99, 100f
for labor market, 59
quality of, 58
scholarships for, 99
VAT for, 107
Edwards, Sebastian, 36
Efficiency
C-efficiency ratio, 88
of infrastructure investment, 94–96, 96f
from MTRS, 116
savings, for education, 58–59
Eichengreen, Barry, 25
Ekberg, J., 235
ELA. See Emergency liquidity assistance
Electrical appliances, 17
Electricity, 6, 7t
Emergency liquidity assistance (ELA), 294, 296–97
Emerging Market Bond Index, 175
E-money, 238–39, 238n6, 239f
DFS and, 242–43
fintech and, 244
Employer withholding, tax compliance for, 130
Environmental regulations, 56
with fuel excise tax, 126
Equity-neutral tax system, 101
from MTRS, 116
Equity price index, 160f
corporations and, 265
E-Shops (E-Warungs), 243
Eugster, Johannes, 51
Europe, portfolio inflows from, 217
Evaluation and Monitoring Team for State and Regional Budgets Realization, 96
E-Warungs (E-Shops), 243
Exchange rate, 17
AFC and, 22, 24, 25–27, 34–35
China and, 213
corporations and, 265
depreciation shock, BSA for, 256–58, 257t, 258t
forward, 224n6
in GFC, 27
in TT, 27, 28
TT and, 159
with US dollar, 22, 23f, 27, 35, 175
See also Flexible exchange rate; Floating exchange rate
Excise tax, 72, 101, 117
MTRS and, 124–26, 124f, 125f
Export basket, 174, 174n21
export sophistication and, 209
Exports, 16–17
by ASEAN, 188, 188f
by ASEAN-5, 144, 145f, 156–59, 157f–59f
commodity prices and, 156, 188
current account balance and reserves and, 36
destinations for, 191, 191f, 192f, 193–94, 195f
diversification of, 193–94, 194f, 195f, 208
GDP and, 24, 24n3, 50, 165–66, 166f, 188
after GFC, 188
growth of, 165, 165f
imports and, 43
of merchandise, 187–209
products classification for, 208
by region, 167f
of SOEs, 41
value added from, 207f
VAT and, 119
world share of, 190f
See also Commodity exports; Merchandise exports
Export sophistication, 195, 198, 198f, 208–9
External debt, 217–20
in LCY government bonds, 218–19, 220f, 221f
from portfolio inflows, 217, 218f
short-term, 26, 26f
External-debt-to-GDP ratio, 217
External shocks
resilience to, 17
VAR and, 175n24
vulnerability to, 36
External Wealth of Nations database, US dollar in, 169n10
F
Fane, George, 25
FATF. See Financial Action Task Force
FDI. See Foreign direct investment
FDI Regulatory Restrictiveness Index, of OECD, 170n15
Federal Reserve, US, 14n6, 21, 36
Fertility rate, 7, 8f
Financial Action Task Force (FATF), 293
Financial deepening, 229–48
credit intermediation and, 236–39
financial inclusion and, 236–39
financial markets and, 230–36, 230f–33f, 231n1, 235f, 236f, 240f
IMF on, 245
inclusive growth and, 240–44, 242f
national strategies for, 240–44
Financial inclusion, 236–39
Financial literacy, 17, 39t, 237
education for, 244
Financial markets, 17–18
development of, 230–36, 230f–33f, 231n1, 235f, 236f, 240f
structural reforms for, 235–36
Financial risk, 18
Financial sector
after AFC, 168–71, 169f, 171f, 174, 229
BSA for, 252
conglomerates, 288–89, 288f
framework for, 40–41
global economy and, 168–71, 169f, 171f
oversight of, 287–93
recent developments in, 159, 160f
safety nets for, 296–97
spillovers from, 148–49, 149f
structure of, 272, 273f, 274t
See also Banks
Financial Sector Assessment Program (FSAP), 291
stress tests by, 282
Financial Services Authority (Otoritas Jasa Keuangan) (OJK), 18, 30, 237, 271
BI and, 293
DFS and, 246
fintech and, 243–44, 246
Integrated Supervisory and Regulatory Department of, 245–46
oversight by, 287–93
repurchase agreement and, 241
stress-testing by, 287
Financial shocks, 16
banks and, 281–87, 282f, 283f, 285t, 286f, 286t, 287f
for exchange rate depreciation, 256–58, 257t, 258t
flexible exchange rate and, 38
with interest rates, 143
in volatility, 143
See also External shocks; Policy shock
Financial stability, 18
in AFC, 27–28
of banks, 275–80, 277f, 279f
in GFC, 27–28
macro-financial context for, 275–79
reinforcing, 271–97, 298t
Financial Stability Board Key Attributes of Effective Resolution Regimes for Financial Institutions, 294
Financial System Stability Committee (Komite Stabilitas Sistem Keuangan) (KSSK), 28, 42, 293–95
Fintech, 243–44, 244n11, 247
Fiscal deficit, 5f, 6
capital inflows for, 211, 212
GDP and, 275
GIMF and, 71
structural reforms and, 64
Fiscal policy
AFC and, 32–34
economic reforms of, 32–34, 60–64, 62t, 87–107
framework for, 43–44
government debt and, 87
for inclusive growth, 87–107
infrastructure and, 70–72, 72t
in Malaysia, 102
multipliers for, 103, 103t
Fiscal reforms, 14
Fiscal risk, with infrastructure investment, 67, 76, 80
Fithrania, Syarifah Namira, 37
Flexible exchange rate, 14, 174
financial shocks and, 38
TT and, 26–27
Flexible System of Global Models (FSGM), of IMF, 153
Floating exchange rate, 27
BI and, 28n8, 35
capital outflows and, 34–35
Foreign Account Tax Compliance Act, 123
Foreign currency debt, 18
after AFC, 171, 171f
Foreign direct investment (FDI), 6, 12, 212–13, 215
after AFC, 164, 168
BSA for, 254
capital inflows from, 17
current account balance and reserves and, 36, 37
for education, 58–59
after GFC, 217
GVCs and, 200–201
for infrastructure, 68, 80
liberalization of, 14, 15, 50, 52, 53–54
structural reforms for, 61
TFP and, 182
Foreign exchange (FX), 232, 246
BI and, 41, 242, 275
BSA for, 254
capital flows and, 43
corporations and, 262–65
in interbank markets, 232–33, 233f
repo market and, 241
reserves, 174
sterilization policy, for liquidity, 41
Foreign liabilities, 217–20, 217f
Forward exchange rates, 224n6
Fragile Five, 21–22, 37
Free-trade agreements (FTAs), with ASEAN, 192, 192n2
FSAP. See Financial Sector Assessment Program
FSGM. See Flexible System of Global Models
FTAs. See Free trade agreements
Fuel excise tax, 125–26, 125f
Fuel subsidies, 28, 69, 189n1
FX. See Foreign exchange
G
G20. See Group of 20
Gai, Prasanna, 30
Gal, Peter, 51
GARCH. See Generalized autoregressive conditional heteroscedasticity
Gas, 17
export of, 188, 189
revenues, 88
GDP, 3
banks and, 231
budget deficit and, 29, 32, 33f
capital inflows and, 211–12, 212f
China spillovers and, 151–52, 151f
CIT and, 88
credit-to-GDP ratio, 275, 276f
exports and, 24, 24n3, 165–66, 166f, 188
external-debt-to-GDP ratio, 217
financial markets and, 230–31
fiscal deficit and, 275
foreign liabilities and, 217
government bonds and, 213
government debt-to-GDP ratio, 32, 38
imports in, 50, 165–66, 166f
infrastructure and, 51, 69, 70, 75, 94
MTRS and, 15–16, 117
social transfers and, 61
taxes and, 69
tax reform and, 117
US spillovers and, 151f, 152
volatility and, 152f
See also Tax-to-GDP ratio
GDP growth, 23f
in stress-testing, 265
See also Real GDP growth
GDP per capita, 9
PRODY and, 208
VAT and, 118
Gender gap, in labor force participation rate, 6, 7n5, 7t, 58
Generalized autoregressive conditional heteroscedasticity (GARCH), 223–24, 225t
GFC. See Global financial crisis
GFS. See Government finance statistics
Ghosh, Atish, 221
GIMF. See Global Integrated Monetary and Fiscal Model
Gini coefficient, 98, 98f
Global economy
after AFC, 164–71, 169f
financial sector and, 168–71, 169f, 171f
linkages with, 163–83
portfolio inflows and, 234n4
spillovers from, 16
volatility of, 16
Global financial crisis (GFC), 3, 14, 21, 39t
advanced economies in, 172
capital inflows after, 217
economic reforms since, 38
exchange rate in, 27
exports after, 188
FDI after, 217
financial stability in, 27–28
IMF after, 249
income tax rate in, 28
inflation in, 24f
interest rate in, 27
portfolio inflows after, 213, 217
protectionism after, 180
survival of, 29–36
TFP after, 163, 177–79
from US subprime crisis, 24
Global Findex database, 237
Global Integrated Monetary and Fiscal Model (GIMF), 49, 60–61
infrastructure investment and, 67, 70–72, 72t
MTRS and, 105
Global interest rates, 16
Global risk aversion, 17
capital inflows and, 221, 223
Global Trade Alert, 193
Global value chains (GVCs), 187, 209
participation in, 200–201, 201f–4f
Global vector autoregression (GVAR), 149, 149n3, 151, 155
Gordon, Robert, 179
Government bonds, 211
capital inflows from, 17, 213–15, 214f–16f
exchanges for, 40
foreign ownership of, 234
panics from, 36
primary dealers system for, 234n2
Scripless Securities Settlement System for, 42, 241n9
See also Local currency government bonds
Government debt, 5f, 15, 33f
fiscal policy and, 87
GIMF and, 71
Government debt-to-GDP ratio, 32, 38
Government finance statistics (GFS), 252, 255
BSA and, 256
Government Finance Statistics Manual, of IMF, 252
Government Finance Statistics system, of IMF, 34
GPF. See Australian Government Partnership Fund
Greenwald, Bruce, 25, 27
Group of 20 (G20), 3
MTRS for, 109, 112, 112nn1–2, 113
NTMs of, 193
tariffs with, 193
Guajardo, Jaime, 16
Gupta, Poonam, 25
GVAR. See Global vector autoregression
GVCs. See Global value chains
H
Haircut associations, 241
Hanson, G. H., 3
Hatzichronoglou, T., 208
Hausmann, R., 195, 198, 208, 209
Health services, 12
of China, 155
inclusive growth for, 96–97, 97f
MTRS for, 15
VAT for, 107
Herfindahl-Hirschman index (HHI), 193, 208
Hidalgo, C. A., 198, 209
High-wealth individuals (HWIs), tax compliance for, 130
Hijzen, Alexander, 51
Hill, H., 3, 21, 22, 22n1, 24, 25, 32, 35–36, 37
Ho, Giang, 52
Human capital, 58–60
slowdown in accumulation of, 16
TFP and, 179, 180f
Hwang, J., 195, 208
HWIs. See High-wealth individuals
I
ICR. See Insolvency and creditor rights
IIP. See International investment position
IMF. See International Monetary Fund
Immigration, for labor market, 60
Imports
of China, 155
exports and, 43
in GDP, 50, 165–66, 166f
growth of, 165, 165f
licensing for, 54
of oil, 189n1
by region, 167f
See also Protectionism; Tariffs
Inclusive growth
CIT for, 88–91, 89f, 90f
for education, 97–98, 97f
financial deepening and, 240–44, 242f
fiscal policy for, 87–107
for health services, 96–97, 97f
inequality and, 98–102, 98f, 99t, 100f, 101f
infrastructure investment for, 94–96, 95f, 96f
MTRS for, 88, 104–7, 106t
taxes for, 88–93
VAT for, 88–91, 89f, 90f, 92f
Income inequality, 12, 13f
education and, 52
MTRS for, 15
Income tax, 71
in GFC, 28
tax reform for, 120–24
See also Corporate income tax; Personal income tax
India, 37
See also Brazil, Russia, India, China, South Africa
Indonesia. See Association of Southeast
Asian Nations-5; specific topics
Indonesia Infrastructure Guarantee Fund, 74n3
Indonesian Banking Architecture, 41, 42
Indonesian Bank Restructuring Agency, 30, 40
Indonesian Debt Restructuring Agency, 40
Indonesia Public Financial Management Multi-Donor Trust Fund (PFMMDTF), 138n11
Indrawati, S. M., 3
Inequality
for education, 99, 100f
inclusive growth and, 98–102, 98f, 99t, 100f, 101f
for infrastructure, 99, 100
for social services, 99, 100
See also Income inequality
Infant mortality, 6, 7t
Inflation, 5f, 6, 24f
in AFC, 22
BI and, 30, 35, 38, 40–41
corporations and, 265
current account balance and reserves
and, 34
monetary policy and, 275
structural reforms and, 63
in US, 175, 175n24
Infrastructure
constraints on, 68–70
current account balance and, 71–72
FDI for, 68, 80
fiscal policy and, 70–72, 72t
GDP and, 51, 69, 70
for GVCs, 200
inequality for, 99, 100
land acquisition for, 6, 15, 52, 78, 79, 82, 82nn1–2
MTRS for, 15
taxes for, 12–13, 71–72
for trade, 68, 68f
VAT for, 107
Infrastructure investment, 50, 52, 60–61, 67–84, 68f, 69f
concessions for, 83
efficiency of, 94–96, 96f
GIMF and, 67, 70–72, 72t
for inclusive growth, 94–96, 95f, 96f
from PPPs, 15, 52, 67, 70, 78–83, 79t, 95
from SOEs, 67, 69, 70, 74–76, 74f–77f, 74n3, 95
in Thailand, 82, 82n9
Ing, L. Y., 3
Insolvency and creditor rights (ICR), 245
Insurance companies, 231, 234
supervision of, 291
Integrated Supervisory and Regulatory Department, of OJK, 245–46
Interbank markets, 284
FX in, 232–33, 233f
Interest rate
in AFC, 27, 29
BI and, 27, 28, 40–41
capital inflows and, 211
by Federal Reserve, U.S., 36
financial shocks with, 143
in GFC, 27
infrastructure investment and, 76
net interest margins, for banks, 237–38, 238f
NPLs and, 27
in US, 17, 211
International investment position (IIP), 252
International Monetary Fund (IMF)
Balance of Payments and International Investment Position Manual of, 252
on bank vulnerabilities, 25, 35
on commodity prices, 182
Direction of Trade Statistics of, 208
on financial deepening, 245
FSGM of, 153
after GFC, 249
GIMF of, 49
Government Finance Statistics Manual of, 252
Government Finance Statistics system of, 34
loan commitments from, 40
Monetary and Financial Statistics Manual and Compilation Guide of, 252
PIMA of, 72–73, 73f
on portfolio inflows, 234n4
Spillover Reports of, 143
vulnerability analysis by, 249
World Economic Outlook of, 221
International taxation, 123
Internet, 6, 10
DFS on, 239
Investment Coordinating Board, 78
Islamic Banking, 41
Isnawangsih, Agnes, 16–17
J
Jakarta Initiative Task Force, 40
Jakarta Interbank Spot Dollar Rate (JISDOR), 28n8
Japan, exports to, 17, 191
Jin, Hui, 15
JISDOR. See Jakarta Interbank Spot Dollar Rate
Joint venture financing, 246
K
Kang, Heedon, 17, 18
Kindleberger, Charles P., 21
Komisi Pemberantasan Korupsi (Anti-Corruption Committee) (KPK), 35, 42
Komite Stabilitas Sistem Keuangan (Financial System Stability Committe) (KSSK), 28, 42, 293–95
Kose, Ayhan, 144
KPK. See Komisi Pemberantasan Korupsi
KPPIP. See Committee for Acceleration of Priority Infrastructure Delivery
Kredit Usaha Rakyat (KUR), 242
ICR of, 245
KSSK. See Financial System Stability Committe; Komite Stabilitas Sistem Keuangan
Kyobe, Annette, 52
L
Labor force participation rate
gender gap in, 6, 7n5, 7t, 58
growth of, 181, 182f
Labor market, 58
active policies for, 59
education for, 59
for GVCs, 200
immigration for, 60
protections for, 60
Laku Pandai (LP), 242–43
Land acquisition, for infrastructure, 6, 15, 52, 78, 79, 82, 82nn1–2
Large Taxpayer Office (LTO), 130, 131
Laws
enforcement of, 57
See also specific laws
Layanan Keuangan Digital (LKD), 242–43
LCY. See Local currency
Leverage
of banks, 25, 37
of corporations, 25, 37, 250, 261, 261f, 262f, 280f
Liabilities-to-assets ratio, 261
Liberalization of, 50
Life expectancy, 6, 7t, 8f
Lipinsky, Fabian, 234
Liquid benchmark yield curve, 17, 245, 246
Liquidity, 18
of banks, 25, 277–78, 284
BI and, 28, 35, 40, 232, 272
CAMELS and, 32, 32n9, 41, 41n13
economic reforms for, 30
ELA, 294, 296–97
FX sterilization policy for, 41
stress-testing for, 284, 286t
LKD. See Layanan Keuangan Digital
Loan-to-deposit ratio, in banks, 25, 30–32, 31t
Local currency (LCY) government bonds, 211, 214–15, 214f, 216f
external debt in, 218–19, 220f, 221f
GARCH and, 224–25
London Club, 40
Long-term inflation, central banks and, 35
Loukoianova, Elena, 18
LP. See Laku Pandai
LPEM, 36
LPS (Lembaga Penjamin Simpanan). See Deposit Insurance Corporation
LTO. See Large Taxpayer Office
Lu, Yinqiu, 16–17
Lump sum taxes, 71, 72
M
Macro-financial context
for financial stability, 275–79
for linkages management, 249–68
for risk management, 282f
Macroprudential policy, 37, 38, 275
for financial sector oversight, 292–93
Malaysia
fiscal policy in, 102
See also Association of Southeast Asian Nations-5
Manuelli, R., 179
Marks, S., 168
McKinsey and Company, 9, 11
McLeod, Ross, 25
Medium Taxpayer Office (MTO), 131
Medium-term revenue strategy (MTRS), 15–16, 111t
CIT and, 105, 121
core elements of, 113, 113f
for DGT, 133–35
excise taxes and, 124–26, 124f, 125f
external support for, 138, 138n11
implementation of, 109–39, 112n1
for inclusive growth, 88, 104–7, 106t
for infrastructure investment, 80
need for, 110–15
political commitment for, 135–38
for property tax, 126–27, 127f
setting objectives for, 115–17
tax reform and, 117–21, 118f
for VAT, 105, 107, 116, 116n5, 117
Merchandise exports, 187–209
export sophistication and, 195, 198, 198f
GVCs for, 187, 200–201, 201f–4f
Mexico, tax reform in, 102–4, 104f
MFS. See Monetary and financial statistics
Miao, W., 265n8
Micro, small, and medium-sized enterprises (MSMEs), 242, 244
portfolio inflows for, 246
Mineshima, Aiko, 103
Minimum wage, 50, 60
Ministry of Finance (MoF), 112n3, 241
liquid benchmark yield curve and, 246
Ministry of Home Affairs, the National Development Planning Agency (BAPPENAS), 78n6, 81, 96
Miyajima, Ken, 18, 265
MoF. See Ministry of Finance
Mondino, Thomas, 221
Monetary and financial statistics (MFS), 252
Monetary and Financial Statistics Manual and Compilation Guide, of IMF, 252
Monetary policy
AFC and, 34–35
of BI, 34–35
economic reforms to, 34–35
financial deepening and, 229–48
framework for, 40–41
inflation and, 275
of US, 36, 143
Money laundering, 293
Money markets, 231–32
BI and, 241
MSMEs. See Micro, small, and mediumsized enterprises
MTO. See Medium Taxpayer Office
MTRS. See Medium-term revenue strategy
Multipliers, for fiscal policy, 103, 103t
Mutual Evaluation Report of the Asia/Pacific Group on Money Laundering, 293
Mutual funds, 42, 149n2, 234
N
Nabar, Malhar, 144
Nasution, Anwar, 25, 27, 30
National Land Agency (BPN), 82
National Strategy for Financial Inclusion (SNKI, NSFI), 230, 240, 242, 243f
Nazara, Suahasil, 15
NBFIs. See Non-bank financial institutions
NDF. See Nondeliverable forwards
Negative Investment List, 52, 79
Net interest margins, for banks, 237–38, 238f
NFCs. See Nonfinancial corporations
Nier, Erlend, 221
Non-bank financial institutions (NBFIs), 252
OJK and, 287
Nondeliverable forwards (NDF), 224
Nonfinancial corporations (NFCs), 218, 250
bond market for, 235
BSA for, 252–56
Nonperforming loans (NPLs), 24, 25, 30, 282–84
BSA for, 255
of corporations, 264, 264n7
increases in, 276
interest rate and, 27
Nontariff measures (NTMs), 192
GVCs and, 200, 201
Nozaki, Masahiro, 15
NPLs. See Nonperforming loans
NSFI. See National Strategy for Financial Inclusion
NTMs. See Nontariff measures
O
OECD. See Organisation for Economic Co-operation and Development
Oil, 17
export of, 188, 189
falling prices for, 22
import of, 189n1
price collapse of, 159
revenues, 88
OJK (Otoritas Jasa Keuangan). See Financial Services Authority
One door services, 54n1
Ong, Li Lian, 234
Openness, 163, 163n1, 166, 167f, 168, 171–77
output dynamics and, 171–74, 172f, 173f
Organisation for Economic Co-operation and Development (OECD)
CRS of, 132
export products classification by, 208
FDI Regulatory Restrictiveness Index of, 170n15
GVCs and, 209
MTRS and, 138
Product Market Regulations Index of, 51, 53
structural reforms and, 61
tariffs and, 193
VAT and, 88
Otoritas Jasa Keuangan (OJK). See Financial Services Authority
Output dynamics
openness and, 171–74, 172f, 173f
potential of, 177–79, 178f
P
Palm oil, 17, 188, 189
Panel analysis, for capital inflows, 222–23, 222t
Paris Agreement, 126
Paris Club, 40
PBDT. See Pemutakhiran Basis Data Terpadu
PDs. See Probabilities of default
Peg system, 27
Pemutakhiran Basis Data Terpadu (PBDT), 100–101
Pension funds, 231, 234
Personal income tax (PIT), 16, 88, 101
MTRS for, 105
tax reform of, 121–23, 122f
Pesaran, M. H., 151
PFM-MDTF. See Indonesia Public Financial Management Multi-Donor Trust Fund
Philippines. See Association of Southeast Asian Nations-5
PIMA. See Public Investment Management Assessment
PIT. See Personal income tax
PKH. See Program Keluarga Harapan
Platform for Collaboration on Tax, 113
MTRS for, 109
Policy shock, 70
in China, 155, 155f
Political crisis, 29, 38
Poplawski-Ribeiro, Marcos, 103
Population growth, 6–9, 6n3, 8f, 8t, 9f
Portfolio inflows
for budget deficit, 36
capital inflows from, 17, 212–13, 213f, 214f
capital outflows from, 37
external debt from, 217, 218f
after GFC, 217
global economy and, 234n4
IMF on, 234n4
for MSMEs, 246
Poverty reduction, 6, 7t, 21
PPKSK Law, 294–95
PPPs. See Public-private partnerships
Prasetyantoko, Agustinus, 244
Prevention and Resolution of Financial System Crisis Law, 271
PricewaterhouseCoopers, 10, 239
Primary dealers system, for government bonds, 234n2
Private demand shock, in China, 154, 154f
Privatization, 34, 44
Probabilities of default (PDs), 266, 267f
Productivity level (PRODY), export sophistication and, 208–9
Product Market Regulations Index, of OECD, 51, 53
PRODY. See Productivity level
Program Keluarga Harapan (PKH), 99
Property tax, 72, 103, 117
MTRS for, 126–27, 127f
Protectionism, 16
tariffs with, 180, 181f
Public Investment Management Assessment (PIMA), of IMF, 72–73, 73f
Public-private partnerships (PPPs)
infrastructure investment from, 15, 52, 67, 70, 78–83, 79t, 95
for social infrastructure, 79
R
Radelet, S., 164f
Rahardja, Sjamsu, 32, 37, 168, 174n21
RASKIN. See Bergas untuk Rakyat Miskin
RCA. See Revealed comparative advantage
Real GDP growth, 7–8, 50, 50f
after AFC, 172, 173f
in China, 175
deceleration of, 250
domestic and global factors for, 176, 176f
with structural reforms, 61–63
tax-to-GDP ratio and, 112f
in US, 172, 173f, 175
US dollar and, 250
VAR for, 176
volatility of, 172, 173f
Real-time gross settlement, for banks, 42
Rebalancing, from China spillovers, 153–56, 250
Recapitalization, of banks, 30–32, 40
Reforms
fiscal, 14
regulatory, 53–57, 56t, 57f
See also Economic reforms; Structural reforms; Tax reform
Regional governments
autonomy of, 44
coordination of, 56–57
Regulatory reforms, 53–57, 56t, 57f
Reinhart, Carmen, 21
Repo market, 241, 241n9, 242
Repurchase agreement, 241, 241n8
Rest of the world (ROW), 252, 252n4
Revealed comparative advantage (RCA), 194–95, 196f–97f, 208
export sophistication and, 208–9
Rice transfers, 99
Risk management
for banks, 291
for infrastructure investment, 80
macro-financial context for, 282f
Rodrik, D., 195, 208
Rogoff, Kenneth S., 21
ROW. See Rest of the world
Rubber, 188
S
Sachs, J., 164f
Safety nets, 18
in AFC, 28
for banks, 30
BI and, 42
for financial sector, 296–97
Sahay, Ratna, 221, 230
Sales tax on luxury goods (STLG), 120
for vehicles, 125
Sato, Yuri, 30
Scholarships, for education, 99
Schuermann, T., 151
Scripless Securities Settlement System, 42, 241n9
Sedik, Tahsin Saadi, 221
Sertifikat Bank Indonesia, 40
Seshadri, A., 179
Shin, Jongsoon, 14, 15, 18
Shocks. See External shocks; Financial shocks
Short-term external debt, 26, 26f, 26n4, 29
Short-term interest rates, 175
corporations and, 265
Simoes, A. J. G., 209
Singapore
portfolio inflows from, 217
See also Association of Southeast Asian Nations-5
SITC. See Standard International Trade Classification
Small and medium-sized enterprises (SMEs)
CIT for, 121
taxes of, 121, 123
SNA. See System of National Accounts
SNG. See Subnational government
SNKI. See National Strategy for Financial Inclusion
Social services
inequality of, 99, 100
MTRS for, 15
PPPs for, 79
Social transfers, 61
Soedarmono, Wahyoe, 244
Soeharto government, 21, 29, 38
Soekarni, M., 3
SOEs. See State-owned enterprises
Soesastro, Hadi, 24, 25
Special-mention loans, 276n1
Spillover Reports, of IMF, 143
Spillovers
from China, 16, 143–47, 146f, 147f, 149–56, 151f, 152f, 154f, 155f, 250
from commodity prices, 143, 148, 148f
from financial sector, 148–49, 149f
from global economy, 16, 143–61
GVCs and, 200
from US, 16, 143, 144–47, 146f, 149
from volatility, 149
Standard International Trade Classification (SITC), 193, 208
State Asset Management Agency, 79
State debentures, for budget deficit, 42
State Law No. 17, 32, 34
State-owned enterprises (SOEs)
asset turnover ratio of, 54f
bond market for, 246
exports of, 41
external debt of, 217
for infrastructure, 52
infrastructure investment from, 67, 69, 70, 74–76, 74f–77f, 74n3, 95
ownership of, 55f
reduced role of, 53
structural reforms for, 61
Stiglitz, J., 25, 27
STLG. See Sales tax on luxury goods
Stock market, 234, 235
Stress-testing
for CAR, 283f
for corporations, 284
by FSAP, 282
GDP growth in, 265
for liquidity, 284, 286t
by OJK, 287
Structural reforms, 60–64, 62t, 63f
for financial markets, 235–36
for GVCs, 200–201
Subnational government (SNG), infrastructure investment and, 95, 96
Swap hedging facility, 41
Systemic risk, 278–79, 281f
System of National Accounts (SNA), 251
T
Taper tantrum (TT), 14, 14n6, 39t
AFC and, 21–29
BI in, 28, 29
current account balance and, 25, 36–37
economic reforms since, 38
exchange rate and, 27, 28, 159
flexible exchange rate and, 26–27
inflation in, 24f
portfolio inflows in, 213
survival of, 29–36
Tariffs, 168, 192–93
GVCs and, 200
with protectionism, 180, 181f
See also Nontariff measures
Tax amnesty, 132–33
Taxes
administration of, 92–93, 93f
distortions in, 90–91
for inclusive growth, 88–93
increases to, 60
for infrastructure, 12–13, 71–72
international, 123
MTRS and, 15–16
See also Compliance; Medium-term revenue strategy; specific types
Tax reform, 117n6
for administration, 127–35, 129f
in China, 102, 104f
of CIT, 121, 122f
for compliance, 128, 129–33, 133f
of DGT, 128–29
for income tax, 120–24
in Mexico, 102–4, 104f
MTRS and, 117–21, 118f
for PIT, 121–23, 122f
for VAT, 118–20, 119f
Tax-to-GDP ratio, 15, 110, 116
for property tax, 127f
real GDP growth and, 112f
Technology
of digital economy, 9–11, 10f
fintech and, 243–44, 244n11, 247
See also Digital financial services
Terms of trade, commodity prices and, 148, 148f
Textiles, 17
WTO on, 189–91
TFP. See Total factor productivity
Thailand
AFC from, 24
infrastructure investment in, 82, 82n9
money market in, 232
See also Association of Southeast Asian Nations-5
Toro, Juan, 15
Total factor productivity (TFP), 49, 50
FDI and, 182
after GFC, 163, 177–79
GIMF and, 61
human capital and, 179, 180f
institutions and, 180–81, 181f
Product Market Regulations Index and, 51
structural reforms and, 63
trade and, 180, 181f
Total return swaps (TRSs), 218
Trade, 43
after AFC, 164–68, 165f–67f
by ASEAN-5, 144–47, 145f, 146f
with China, 144–47, 146f, 147f
comparative advantage for, 193–200
GFC and, 24
infrastructure for, 68, 68f
liberalization of, 14, 15, 52, 53–54
structural reforms for, 61
TFP and, 180, 181f
with US, 144–47, 146f
See also Exports; Imports
Treasury bonds, in US, 175
Triennial Central Bank Survey, of BIS, 232
TRSs. See Total return swaps
TT. See Taper tantrum
U
Ugazio, Giovanni, 18
Ultra-high-wealth individuals (UHWIs), tax compliance for, 130–31
Unemployment
after AFC, 178
corporations and, 265
of youth, 12, 58
United States (US)
budget deficit, 36
commodity prices and, 148
Federal Reserve, 14n6, 21, 36
inflation in, 175, 175n24
interest rate in, 17, 211
monetary policy of, 36, 143
portfolio inflows from, 217
real GDP growth in, 172, 173f, 175
spillovers from, 16, 143, 144–47, 146f, 149
stock market in, 259
subprime crisis in, GFC from, 24
trade with, 144–47, 146f
Treasury bonds in, 175
See also US dollar
Urbanization, 7
US. See United States
US dollar
exchange rate with, 22, 23f, 27, 35, 175
in External Wealth of Nations database, 169n10
GARCH and, 224
real GDP growth and, 250
V
Value-added tax (VAT), 43, 61, 71
in China, 102
compliance for, 92, 128, 129–30, 133n9
of equity-neutral tax system, 101
exemptions to, 90–91, 119, 119n7, 120
for inclusive growth, 88–91, 89f, 90f, 92f
in Mexico, 104
MTRS for, 105, 107, 116, 116n5, 117
refunds for, 93
registration thresholds of, 91, 92f, 105, 107, 119, 119f, 120
for SMEs, 123
tax reform for, 118–20, 119f
VAR. See Vector autoregression
VAT. See Value-added tax
Vector autoregression (VAR), 174, 175–76
for BSA, 258–61, 259t, 260f
external shocks and, 175n24
GVAR, 149, 149n3, 151, 155
for US dollar, 259
VIX and, 260–61
Vehicle excise tax, 125
Viability Gap Fund, 78
Vietnam
FDI in, 200–201
RCA of, 195
See also Association of Southeast Asian Nations-5
VIX. See Chicago Board Options Exchange Volatility Index
Vocational training, 59
Volatility
of capital inflows, 17
financial shocks in, 143
GDP and, 152f
of global economy, 16
portfolio inflows and, 213
of real GDP growth, 172, 173f
spillovers from, 149
of stock market, 259
See also Chicago Board Options Exchange Volatility Index
W
Water, 6, 7t
WBDPL. See World Bank Fiscal Reform Development Policy Loan
Weber, Anke, 103
Weiner, S., 151
Wie, T. K., 3
Women
in national parliament, 6, 7t
See also Gender gap
World Bank, 21
on banks, 237
Doing Business ranking of, 50, 54, 93, 94t
Gini coefficient by, 98, 98f
on vehicle excise tax, 125
World Bank Fiscal Reform Development Policy Loan (WBDPL), 138n11
World Bank Temporary Trade Barriers database, 180, 193
World Economic Outlook, of IMF, 221
World Trade Organization (WTO), 168
GVCs and, 209
tariffs and, 192
on textiles, 189–91
Y
Youth unemployment, 12, 58