Financial Literacy in Indonesia
With the implementation of its National Strategy on Financial Literacy, Indonesia has initiated a number of actions to improve financial literacy. Quick success, however, is hardly guaranteed. With a low initial financial literacy level, movement toward a
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Financial Literacy in Indonesia Dwi Sulistyorini Amidjono, John Brock and Ebi Junaidi
Abstract With the implementation of its National Strategy on Financial Literacy, Indonesia has initiated a number of actions to improve financial literacy. Quick success, however, is hardly guaranteed. With a low initial financial literacy level, movement toward an economically literate society of financially active citizens is likely to be slow. Several factors may slow the progress of the fight against financial illiteracy. With the new school curriculum mandating less rather than more economics and personal finance coursework, graduates of the school system will likely be less prepared for the challenges of the economic and financial world into which they emerge. Efforts to educate the general population outside the school environment should improve the situation somewhat; however, attacking financial and economic illiteracy through youth education in a school context might substantially strengthen progress toward a financially literate society. Progress in the war on financial illiteracy in Indonesia is evident. With continued diligence by the responsible agencies, the educational establishment and the private sector, the efforts to improve the personal finance knowledge and behaviours should improve with time.
Keywords Financial literacy Financial illiteracy Personal finance national strategy on financial literacy Personal finance behaviour
Indonesia
D.S. Amidjono (&) Universitas Indonesia and Indonesian Council for Economic and Financial Education (ICEFE), Kampu Baru UI, Depok 16424, Indonesia e-mail: [email protected] J. Brock Center for Economic Education, University of Colorado, Colorado Springs and Global Economic Education Alliance (GEEA), Colorado Springs, USA E. Junaidi Faculty of Economic and Business, The University of Indonesia, Kampu Baru UI, Depok 16424, Indonesia © Springer Science+Business Media Singapore 2016 C. Aprea et al. (eds.), International Handbook of Financial Literacy, DOI 10.1007/978-981-10-0360-8_18
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18.1
D.S. Amidjono et al.
The Country and the Economy
18.1.1 The Country The Republic of Indonesia is the world’s fourth largest country with an estimated 2012 population of almost 250 million. Composed of almost 18,000 islands, Indonesia is a vast archipelago and home to the world’s largest Muslim population. The country is enormously diverse, being made up of a rainbow assortment of religious and cultural traditions. Indonesia, which is presently classified as a lower-middle-income country by the World Bank, has, in less than two decades, undergone a remarkable transition from a near-dictatorship to an emerging democracy. The country’s first directly elected president, Susilo Bambang Yudhoyono, completed his second five-year term in 2014, and Joko Widodo became the 7th president of Indonesia in October 2014.
18.1.2 The Economy The Indonesian economy has significant potential, but many stubborn problems continue to hinder economic growth. However, compared to the very dark days of the Asian fin
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