a) Under the leadership of Suharto, the Indonesian economy grew at a steady pace. Why was this ultimately not sustainable?

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Business

Kidd

29 February, 06:42

a) Under the leadership of Suharto, the Indonesian economy grew at a steady pace. Why was this ultimately not sustainable?

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Gilberto Alvarado · Answer 1

The government was a military backed authoritarian regime that violates human rights, there was no good relationship between the government and its citizens. Political and economic power was made to reside with the small elite group that were around the Suharto government.

There was serious corruption and nepotism.

There was deregulation in the banking sector which made the financial system become uncontrollable. There was no control for money flow in the Indonesian banking system, coupled with lack of financial data, weak regulatory and legal framework. There was also the problem of illegal flow of money.