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* See Editor's Note, page 85. [ABSTRACT FROM PUBLISHER]

The object of the paper is to explain the sharp decline in Indonesia's growth rate since 1981 compared with the period before 1981. It is argued that the slow growth of the later penod was mainly due to the net effect of investment, the government's domestic budget deficit and imports in depressing domestic demand, reflected in turn in a slower growth of money supply. These demand policies were followed to deal with the deteriorating balance of payments situation. Therefore, some alternative policies are suggested for dealing with this situation which will not have adverse effects on economic growth. 1The author is grateful to Professor H. W. Arndr. Dr. Booth, Dr. H. Hill and Professor Malcolm Treadgold for many useful and detailed comments on an earlier draft paper, which have greatly improved the presenl version. [ABSTRACT FROM PUBLISHER]

Richard Higgott and Richard Robison (eds), Southeast Asia: Essays in the Political Economy of Structural Change, London: Routledge & Kegan Paul, 1985. £18.00 (cloth) John Wong, The Political Economy of China's Changing Relations with Southeast Asia, London: Macmillan Press, 1984, pp. xvi + 246. Sumitro Djojohadikusumo, Perdagangan dan Industri dalam Pembangunan [Trade and Industry in Development], Jakarta: LP3ES, 1985, pp. 133.Thee Kian Wie Masyarakat Indonesia, 12(3), Jakarta: LIPI, December, 1985. Special issue edited by Thee Kian Wie, entitled 'Kaitan-Kaitan Vertikal Antar-perusahaan dan Pengembangan Sistem Subkontraktor di Indonesia: Beberapa Studi Kasus' [Vertical Linkages between Firms and the Development of the Subcontracting System in Indonesia: Several Case Studies]. D. B. G. Denoon, Devaluation under Pressure: India, Indonesia and Ghana, Cambridge, Mass: MIT Press, 1986, pp. xi + 260. US$28.75 John W. Mellor and Gunvant M. Desai (eds). Agricultural Change and Rural Poverty, Baltimore: The Johns Hopkins University Press, 1985, pp. xix + 233. US$27.45. 'Indonesia's Transmigration Programme: A Special Report', The Ecologist, Vol. 16, No. 2/3, 1986. £4.00 [ABSTRACT FROM PUBLISHER]

The paper provides some estimates of the sources of Indonesia's rapid growth in the period 1968–81. This rapid growth was partly due to the improvement in the terms of trade, especially because the improvement in the financial position of government raised the investment rate. But part of it was also due to a high rate of technical progress, especially in agriculture, and to the expansionary domestic fiscal policy of government. [ABSTRACT FROM PUBLISHER]

* An earlier version of this paper appeared under the title ‘Kapan Indonesia Bebas dari Modal Asing?’ in Prisma Vol. II, Feb. 1973. The current version has benefited from comments of Professor H. W. Arndt and Dr R. M. Sundrum. Remaining imperfections, of course, are the sole responsibility of the author. [ABSTRACT FROM PUBLISHER]