This timely study examines the impact of policies on growth, employment and poverty reduction in Indonesia, reviewing the periods both before and after the 1997 financial crisis and drawing important implications for today's policy-makers.

Analysing the Indonesian labour market and exploring appropriate responses to foster growth and poverty reduction, the authors argue that "de-industrialization", decline in employment elasticity and lack of growth of real wages seem to be the key features of labour market performance in the post-1997 period. Influential commentators have suggested that this has resulted from onerous labour market regulations. The authors carefully dissect the evidence and make a case for a new reform agenda that empowers labour market institutions and prioritizes investment in public infrastructure and expenditure on human development over inflation targeting and fiscal conservatism.

Focusing on the sectors of agriculture, manufacturing and construction and services, as well as assessing macroeconomic policies, this book addresses current challenges with respect to past and emerging trends, and advocates recognizing the country's strengths and fostering a skilled workforce that can adapt and respond to the imperatives of industrial transformation.