Islamic Banks and Profitability Empirical Analysis of Indonesia - Literature review Example

The new policies introduced in the late 60s brought a bit of stability by bringing inflation down and stabling the currency. In the mid-60s, Indonesia was the only Southeast Asia the only country that was a part of OPEC and the high oil prices marked high growth and development that further strengthened the economy in a positive manner (De Mello, 2008). However, declining oil prices in the early 80s slowed the overall economic growth and development. At the same time, wide arrays of policies were introduced to facilitate exports along with deregulating the financial sector (Goeltom, 2007).

The manufacturing sector of Indonesia has marked significant growth and development that also attracted a good amount of foreign direct investment in the early 2000s.  It was also found that the public indebtedness mainly because of the mismanagement of the financial sector put extra pressure on the economy making the overall progress a bit slow and insignificant in the late 2000s. Overall, it can be said that the history of the country is quite appealing as it has emerged from the darkest shadows of hardships to become the frontrunner of an exemplary South East Asian economy (De Mello, 2008).

Indonesia is the largest economy in Southeast Asia that is all set to become the seventh-largest economy in the world by the end of 2030 (World Bank, 2011). The country has huge prospects in terms of growth and development mainly because of the availability of natural resources that at one point in time facilitated impressive growth and development in the form of oil and gas business and exports. The country faced immense pressure and challenges in the form of the financial crisis in 1997 but mainly because of the thoughtful planning and judicious economic reforms; the government was successful in shaping the economy in the right direction through the debt restructuring process (CMEA, 2011).