Introduction

The economic success of a nation is largely determined by internal factors. But external influences--both ideas and events--can affect economic performance significantly as well. Indeed, as Indonesia's recent experience demonstrates only too well, some external shocks can inflict great damage. And lessons can be learned from the experience of other countries as well. My comments today will focus on the interaction between external influences and domestic economic management. I will look at both Indonesia's own experience and experience in some other countries. The aim is to draw on lessons to consider a strategy for the future.

In brief, I will suggest that in some respects the current international economic environment appears to be a particularly challenging one for Indonesia. Later in the paper some lessons from the transition process in some other countries will be considered. One of the main conclusions is that it seems likely that in the future, Indonesia should consider working harder at economic diplomacy than in the past.

The paper will focus on the following questions:

• What are the main features of the international economic environment that Indonesia currently faces? In particular, how does the international environment today differ from the situation at the time of the last major transition in Indonesia when President Soeharto formed the New Order?
• What lessons can be learned from the experiences of other countries passing through a transition process?
• What are the implications of this range of different experiences for economic policy and for current planning in Indonesia?

The discussion will focus first on Indonesian experience. The latter part of the paper will outline experiences in some other countries passing through the transition process.