 Savings and Investment in IndonesiaMPRA Paper from University Library of Munich, Germany Abstract: The main objective of this paper is to understand domestic savings and investment in Indonesia. The level of savings in Indonesia is relatively high by international standard. However, the savings through banking sector are more dominant than non-banking savings. This leads to the scarcity of long-term savings which are essential for long-term investment, especially in infrastructure, that ultimately benefit growth and development. One of the keys to promote long-term savings is through mandatory savings. At the same time, institutional investors such as insurance companies and pension funds must be encouraged to invest in long-term instruments. The role of financial sector plays a crucial role in providing such instruments. Therefore, policy recommendations must be directed to fiscal policy through tax incentives for stimulating long-term saving and investment; social welfare policy for encouraging contractual saving and developing long-term domestic institutional investors; financial market deregulation for increasing access to financial services and increasing competition among financial service providers; and coordination among sectors. Keywords: Savings; Investment; Financial sector; Indonesia (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:105254 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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