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Jakarta Post

Structural reform: Turn words into good deeds

  • Maria Monica Wihardja

Jakarta   /   Wed, September 21 2011   /  08:00 am

Structural reform (SR) is difficult to implement, but it is worth the effort. A study by the APEC Policy Support Unit in 2011 shows that SR is far more important to creating a return to reform efforts than border trade reforms.

Another study by the OECD shows that fiscal consolidation when combined with SR will increase economic growth, reduce gross government debt share of GDP and reduce global imbalances by more than fiscal consolidation alone. SR is also needed because the 2008 Global Financial Crisis (GFC) has reduced potential outputs in many countries around the world.

In Chinese, the word “crisis” consists of two characters: Wei means “danger” and ji means “opportunity” or “critical point”. For Indonesia, the GFC is a “good crisis” because it may learn some lessons from the crisis without having to go through an austerity policy conditionality as ...