Indonesia recently

In the last few months, Indonesia has been being centre of attention regarding economic fundamentals and potentials. Foreign media often cited many economists and analysts regarding the prospect of Indonesia and they’re voicing similar tone: Indonesia is on the move.

Thanks to the relatively successful General Election, stable financial system, and GDP growth (4.4%) during the first quarter of 2009, apparently foreign investors have relatively positive view regarding Indonesia (not to forget the rampant corruption and terrible infrastructure).

I just read positive tone economic reports from EIU, Goldman Sachs, CLSA Asia, BarCap, and Morgan Stanley. Moody’s also has upgraded the rating of Indonesia from Stable to Positive. Not really agree with all they said, but they are market-opinion maker and in this business, opinion is more important than facts (reality bites!).

I expect under Yudhoyono’s second term, Indonesia will move upward, adding another “I” to BRIC (Brazil, Russia, India, China). By the way, I think “Chindonesia” sounds better than “BRIC”.

Some citations from Bloomberg:

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July 10 (Bloomberg) — Indonesia’s economy is set to emerge a “winner” after avoiding the worst of the global financial crisis, the World Bank’s country director said.

Asia’s fastest-growing major economy after China and India can expand “significantly” more than 7 percent once President Susilo Bambang Yudhoyonofixes the nation’s congested roads, neglected ports and ageing power plants, according to Joachim von Amsberg, the World Bank’s representative in Jakarta.

Faster growth and a “maturing democracy together put Indonesia in an incredibly exciting position to come out as a winner from this global turmoil,” von Amsberg said in an interview yesterday in Jakarta. “It shows that Indonesia is a positive outlier in the world right now.”

Indonesia’s move to increase deposit insurance, boost coordination with the central bank and strengthen bank supervision helped the nation largely avoid the worldwide credit crisis, von Amsberg said.

Asia’s third-most populated country has also skirted recession, unlike many of its neighbors that rely more on exports. Declining interest rates helped boost consumption, which accounts for more than 60 percent of Indonesia’s gross domestic product.

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July 9 (Bloomberg) — President Susilo Bambang Yudhoyono swept toward a second five-year term, receiving a strong mandate from Indonesia’s 176 million voters to take the country’s economy to new heights of growth.

Leveraging that victory into achieving his goal of growth rates on par with China and India will hinge on the ability to build roads, ports and power plants and lure foreign investment. To do so, he’ll have to overcome a bureaucracy where power is decentralized down to the district level across 17,500 islands.

“I would say a ‘definite yes’ in maintaining very solid economic growth, a ‘maybe yes’ to become the 9 percent superstar,” said Milan Zavadjil, Indonesia country head for the International Monetary Fund. “To go to the China level you need to take care of some issues, like major improvements in infrastructure, the investment climate and the legal system.”

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July 11 (Bloomberg) — Indonesia’s economy may double in the next six years as the world’s biggest exporter of power- station coal and largest producer of palm oil taps surging demand from India and China, CLSA Asia-Pacific Markets said.

China, India and Indonesia will generate $10 trillion of wealth for investors by 2015, Nicholas Cashmore, head of Indonesia research at CLSA Asia-Pacific Markets, said in a note titled “Chindonesia: Enter the Komodo,” a reference to the reptile found only in eastern Indonesia. The three economies are Asia’s “next growth triangle,” he said.

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1. therry says:

   July 19, 2009 at 8:54 pm

   Well I guess the economy ain’t looking up anymore thanks to the bomb, innit?

   Reply
2. boy says:

   July 20, 2009 at 11:17 pm

   not really…initial data suggests that the bomb has minimal impact to the economy.

   http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAkunOnjCebk

   hopefully it has minimal impact

   Reply