Indonesia has a market-based economy in which the government
plays a significant role. It owns more than 164 state-owned enterprises
and administers prices on several basic goods, including fuel, rice, and
electricity. In the aftermath of the financial and economic crisis that
began in mid-1997, the government took custody of a significant portion
of private sector assets through acquisition of nonperforming bank
loans and corporate assets through the debt restructuring process.
the presence of US banks, manufacturers, and service providers
expanded, especially after the industrial and financial sector reforms of
the 1980s.
The economic crisis made continued private financing imperative but
problematic. New foreign investment approvals fell by almost two-thirds
between 1997 and 1999.