Globalization: Challenges for Indonesia

51 ndonesia has gone a long way in liberalizing its economy, but the task is far from complete. Globalization has given the government a strong justification for undertaking market-oriented reforms that can help maintain high and sustainable rates of exports necessary for strong economic growth. The country’s policy of globalization has been based on pragmatism. It is not grounded on ideological considerations; it is based on an objective assessment of what other countries in East Asia have been able to achieve. In addition, there is a strong element of competition at work among the countries in the region to liberalize in order the make their economies more attractive to global investments. Such competitive liberalization is itself a powerful factor. The universal trend in the 1980s toward economic liberalization, deregulation and privatization may have provided an additional source of inspiration. Indonesia’s participation and efforts to promote a number of regional cooperation schemes are considered to be an important element of its globalization policy. Re-