EADN RP1-1 EADN Regional Project on the Social Impact of the Asian Financial Crisis The Impact of the Asian Economic Crisis on Regional Development Patterns in Indonesia By

In Indonesia, it is commonly believed that the origin of the crisis was a combination of a highly liberalised international money market and the weak foundations of the Indonesian economy. The overall economic crisis was transmitted into the real sectors through skyrocketing prices of daily necessities and sudden unemployment, resulting in a lower quality of life. While policy discussions focussed on economic recovery, the spatial dimensions of the crisis were largely ignored. Most analyses seemed to assume that the crisis affected all parts of Indonesia equally, and to minimize the impact of the crisis, a universal policy would suffice. This may apply to monetary and international trade affairs, but for the real sector and matters concerning people’s welfare, the effectiveness of such uniform policies was questionable. The neglect of the spatial dimension of the crisis is understandable given the highly centralised government system in Indonesia. Such a centralised system has resulted in regional disparity, with regions closer to the centre, or Jakarta receiving greater attention. When the economic crisis occurred, the emphasis of government politic