1. This document examines the economic growth performance of Indonesia, the Philippines, and Thailand from the post-war years to the 1980s based on macroeconomic indicators and the development of human resources. 2. In the early post-war period, the Philippines had the highest GNP per capita and GDP growth, but it experienced a slowdown over time. Thailand accelerated in the 1960s while Indonesia grew fastest in the 1970s. All three countries saw declines in the 1980s. 3. The agricultural sector declined the most dramatically in Indonesia and Thailand, while the Philippines had a slower transition. Industrial and manufacturing sectors grew in all three countries.

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HRD SYSTEMS (Prof. Mitsuru WAKABAYASHI)
June 17th
, 2002
Chapter 8: Economic Growth Performance of Indonesia,
The Philippines, and Thailand
Tri Widodo W. Utomo (M1-DICOS)
There is a strong conviction that human factor has a very crucial role in accelerating the
economic growth, except physical investment and sound macroeconomic policies 
The goal of the chapter is to examine the economic growth performance of Indonesia,
the Philippines and Thailand during the post-war years, giving special attention to the
underlying human resource factor.
This chapter mainly consists of three parts:
• Macroeconomic performance.
• Human resource development and their links to economic growth.
• Econometric analysis to provide further support to the central thesis.
Macroeconomic performance
From the perspective of macroeconomic indicators such as GNP per capita and real
GDP growth rate (see table 5.1 and 5.2), we can draw some conclusions:
1. Of early post-war (1950s), the Philippines was a way ahead of both Thailand and
Indonesia.
• Its GNP per capita was $150  close to double of Thailand.
• It exhibited the fastest GDP growth (6.4%) compare to Thailand (5.7%) and
Indonesia (3.8%).
In subsequent period, the Philippines experienced a gradual slow-down growth, and
culminating in negative growth rate in 1984-5.
2. In the 1960s, Thailand’s economic (GDP) growth accelerated to 7.8%. Thailand
was able to manage to be the highest economic growth country, except in
1970-1980 when Indonesia had a GDP growth of 8.0%.
3. In the period of 1980-5 can be mentioned as a time of decline, when the 3 countries
underwent a deceleration in their economic performance. Indonesia was hit by a
drastic fall in price of oil and was exacerbated by the world-wide recession. While
the condition in the Philippines was triggered by political crises.

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4. With an improving political climate and a sound economic reform, 1985 and 1987
became the recovery period for the Philippines and Indonesia, respectively.
Meanwhile, Thailand has continued on a fast track in economic growth record.
5. Short term prospect: Thailand might has a probable deceleration due to
infrastructural constraint; Indonesia might be able to maintain steady growth; and
the Philippines is likely to experience a more slow-down on account of its external
sector and fiscal deficits.
From the perspective of sectoral distribution of both GDP and Labor Force (see table
5.3 and 5.4), we can draw some conclusions:
1. Of early post-war, the Philippines appeared to be the least agricultural (or most
industrialized). However, the reductions in these shares over time were relatively
negligible. For example, agriculture’s share in 1960 was 26%, declining to 24% by
1987. The decreases in agricultural product shares were more dramatic in Indonesia
(from 54% to 26%) and in Thailand (from 41% to 16%).
2. Industrial (and manufacturing) shares of GDP in three countries were increase over
time.
3. In terms of sectoral distribution of labor force, the Philippines also experienced a
slow decrease from 61% (1960) to 52% (1980). The decline in Indonesia and
Thailand were faster: 75% to 57% and 84% to 71%, respectively, over the same
period.
The economic performance differences between three countries are caused by:
• Historical factor: differences in initial condition, e.g. the concentration of land
holdings.
• Differences in cultural values and socio-political institutions (esp. stressed on
political dynamic and stability).
• Difference in economic policies, e.g. import-substitution industrialization policy,
structural reforms, etc.