Impacts of the new Indonesian mining regulations

Abstract

Throughout history, there have been constant debates on whether the concept of free trade or government intervention is the best tool to achieve economic development. The Indonesian government, however, has oscillated between the two as a way of counteracting the undesired consequences of following one of the two concepts. Through intervention the Indonesian government limited export of raw minerals in January 2014 with hopes of developing the Indonesian processing industry and this thesis wishes to explore the possible impacts of the regulations. By directing our focus on Indonesia’s political and economic history, quantitative data on relevant areas, theoretical framework on the concepts of ‘free trade’, ‘government intervention’, ‘new institutional economics’ and ‘path dependence’ we have reached the conclusion that the new Indonesian mining regulations have economic impacts on both national and organizational levels.