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Comaprison of Indonesia and Australia's Economy

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Introduction

In 2006/07, Australia had a population of 21 million while Indonesia had a population of 223 million, nearly 11 times larger. Indonesia is located in South-East Asia and Australia is just south of that same region. Indonesia is an archipelago of over 3000 islands with a tropical, rainy climate and dense rainforest vegetation. On the other hand Australia is an island continent, consisting mostly of dry and arid deserts. Australia is a small open economy which is classifies as a mixed market economy, meaning that the government only modifies the economic decisions made by private market forces through its legislative powers. In contrast to Australia, Indonesia is a large open economy. Economic Growth In terms of nominal Gross Domestic Product, Australia has a larger economy than Indonesia. Australia was ranked the 15th largest economy in the world with a GDP of US$742.3b, with an average rate of GDP pc growth between 1990 and 2005 of 2.5%. Indonesia had a nominal GDP of US$315.9b in 2006 which ranked it 24th in the world. Indonesia's average annual growth rate in GDP pc was 2.1% between 1990 and 2006. ...read more.

Middle

This also had a direct effect on unemployment rates which went from 11.25% in 1992 to 2.3% in 2007. In Indonesia due to the Asian Currency Crisis the unemployment rate rose to 20% but since has fallen to 10.3% because a recovery in economic growth. They were also helped by the World Bank and the IMF, who imposed reforms on the Indonesian government in return for loans to overcome the crisis. The government tried to create more employment opportunities by introducing transmigration. This involved moving 2.5million Javanese to less populated islands such as Irian Java and East Timor. This absorbed much of the growth in the workforce, thereby helping to keep unemployment lower in the late 1990s and early 2000s. In the 1980s, Indonesia also adopted a Birth Control policy to try to reduce the population growth rate (reduced from 2% in 1980s to 1.4% by 2006). Even though there was some economic improvement in Indonesia, the World Bank classifies 52.4% of the population under the international poverty line of US$2/day between 1995 and 2005. ...read more.

Conclusion

Irrigation, erosion, salinity and overgrazing has causes land degradation in rural areas, especially around the Murray-Darling Basin. Australia has large coal fired electricity industry has further contributed to the greenhouse gas emissions, as well as the burning of fossil fuels. The Indonesian government collects less tax than the Australian government because of the low income per capita, collecting on 12.3% of GDP in taxes, compared to Australian government 23.7% of GDP. Comparatively the Indonesian Government spends less on health, education and social welfare than the Australian Government. Nonetheless, Indonesia was successful in raising its adult literacy rate to 90.4% and conducting universal immunisation programmes amongst infants to prevent various diseases. The Australian government provides a higher percentage of their total government expenditure on the social welfare system, with 35% of total government expenditure. The distribution of income in Australia and Indonesia is roughly similar, 28.5% of the total income in 2002 was brought in by Indonesia's richest 10% income earners, compared to 25.4% for Australia's top 10% of income earners. There is much more corruption among the military elite and government bureaucracy in Indonesia compared to Australia is one cause of extreme poverty and inequality in Indonesia. ?? ?? ?? ?? Compare and Contrast the Economic and Social Indicators of Indonesia and Australia ...read more.

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