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Abstract
The impacts of bank restructuring on the Indonesian macro economy, and its
various sectors, especially the agricultural industries, are assessed and analyzed using an
Indonesian Forecasting Model. The model is more detailed sector-wise than existing
Indonesian CGE models and incorporates flexibility to capture alternative assumptions
regarding land and investment behavior. The impacts are assessed under several
alternative settings including various scenarios on capital augmenting technical change
and rate of return to capital on all industries. The failure of bank restructuring will have a
bad impact on the Indonesian macroeconomic performance. It will reduce the GDP from
both income side and expenditure side. The impact become worst if it will reduce the
efficiency of using capital in all sector. The high effort of internal and external banking
system should be done to make a successful of bank restructuring. The successful of bank
restructuring will increase the output bigger than the failed of bank restructuring or will
minimize the negative percentage change. Paddy is one example have a positive
percentage change. The government policy is still needed to encourage banking sector to
give a soft loan to the agricultural sector.