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Economics and Policy

Ensuring that the economy is competitive and up to date

The PwC Economics and Policy team strongly believes in the role of the public sector in enabling conditions for sustainable economic development across Indonesia and, ultimately, in improving the lives of all Indonesian citizens.

We work with government organizations as well as international donor agencies in order to provide independent, rigorous, and practical advice across a broad range of economic and policy issues. Our advice is sought at many points of government decision-making, from strategy and policy development to the design and implementation of specific initiatives and programmes. Our assignments have sought to answer such questions as:

  • What policy interventions are required in order to facilitate greater private sector investment in infrastructure?
  • What are the impacts of particular government programmes, initiatives, and/or projects on particular sectors, regions, or the broader economy?
  • What are the future skills that will be needed by the manufacturing workforce, as Indonesia pursues an Industry 4.0 vision?
  • How can the Indonesian government optimize commodity revenues in a way that improves public financial resources while also supporting industry growth?
  • Which infrastructure projects should the government prioritize in order to maximize the country’s productivity and socio-economic outcomes?

 

We seek to provide advice on these matters by employing specialist economic frameworks and analytical tools that enable us to develop objective insights into the impacts and trade-offs of particular courses of action.

PwC has worked closely with national and sub-national governments across most regions of Indonesia. The multilateral and bilateral development agencies we have worked with include:

  • The World Bank Group;
  • The Asian Development Bank;
  • The UK’s Foreign & Commonwealth Development Office (‘FCDO’);
  • Australia’s Department for Foreign Affairs and Trade;
  • Japanese International Cooperation Agency (JICA)

Our Services

Project economics

Business cases, including cost-benefit analysis, play a critical role in helping government and business evaluate and compare investment proposals, to ensure that society’s resources can be allocated effectively. Our teams are highly experienced in the development of robust business cases for Indonesia’s most significant infrastructure projects. Key elements of this process include: 

  • Building the strategic case - we work with our clients to articulate the case for investment. This can involve explaining and providing evidence of the key problems, challenges or needs being addressed by the proposal and what the intended benefits are.
  • Financial and commercial analysis - we prepare robust analysis of infrastructure demand, revenues and costings, to understand the viability of the project. 
  • Quantifying the economic impacts - - we look at the broader socio-economic impacts of the project on key stakeholders, and quantify the cost-benefit ratio to determine whether a project offers a net benefit to the community. 

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Microeconomic policy and regulatory reform

We work with the government to assess the appropriateness of policy and regulatory settings across a range of sectors and regulated areas including infrastructure, resources, trade and labour markets. Whilst always grounded in economic theory, our analysis is tailored to the specific issues and objectives at the heart of the regulation being designed or updated. We draw on a range of quantitative and qualitative methods to develop the evidence-base to inform government decision making. 

We also support regulated entities to understand the implications of regulatory change, including the potential financial impacts on their organization or industry more broadly. 

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Impact analysis and evaluation

Ongoing monitoring and evaluation is key to assessing the effectiveness and impact of public sector programs, and ultimately to realizing their full value. Evaluations also help to identify unintended consequences and where adjustments to program processes and activities need to be made.

Our team supports government and organizations within the development sector at various stages of the monitoring and evaluation process. For example:

  • development of robust program logics which provide the critical foundation for evaluation
  • development of performance indicators
  • collection and analysis of primary data, including through the design and execution of surveys 
  • application of quantitative and qualitative assessment methods analytical mechanisms

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Economic modelling

Our clients in government and business often seek our services when looking for a clearer picture of particular economic drivers influencing their policy or investment decisions.

We are able to draw on a range of economic methodologies and datasets, which can be tailored and applied according to our clients’ particular question or issue. For example:

  • undertaking historical analysis and forecasting, at a macro and micro level, to provide insights into a market landscape and strategic opportunities for growth
  • helping clients to understand consumer demand elasticity, in the context of changing regulatory settings and their impact on pricing (e.g. taxes or tariffs)
  • unpacking the major drivers of industry trends or socio-economic outcomes e.g. through regression analysis.

 

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Contact us

Julian  Smith

Julian Smith

Advisor, Government & Public Services, PwC Indonesia

Tel: +62 21 509 92901

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