- Historical oil shocks offer valuable insights for contemporary policymaking. The evolving nature of global energy markets and geopolitics necessitates adaptive strategies to navigate the complexities of resource-dependent economies and global market fluctuations.
- The 1970s-1980s oil shocks, caused by Middle East conflicts, challenged existing economic policies and led to strategic changes in energy dependence and geopolitical alignments. The oil price volatilities facilitated Indonesia’s transition from an agrarian to a resource-rich economy, boosting its export performance through increased global demand for alternative energy sources like natural gas and coal.
- The oil shocks created a ripple effect, increasing prices of commodities like natural gas and coal, but did not necessarily translate to higher economic growth due to the increase of prices mainly driven by supply constraints. In contrast, the post- Covid period saw a synchronized recovery in these commodity prices, influenced by global demand resurgence and interconnected supply chains, differing from the supply-driven shocks of the earlier era.
Toward Stronger Financial Industry in Indonesia