For the fourth highest populated country in the world with an economic growth one of the highest in the world in the early to mid 1990's, it is surprising to see the lack of interest shown in this very high potential investment, industrial and consumer market. To be sure it has been consistently bad news for several years since the Asian Financial Crisis caught up with Indonesia's investment bubble in the mid 1990s precipitating a crisis of confidence in government, politics, investment and spending. As a financial basket case, Indonesia had no option than to comply with the, in retrospect misguided, financial disciplines and prescriptions of the IMF. Politics was very unstable until a year or so back, as entrenched political interests battled behind the scenes for future influence as they left others to take the heat from managing a badly devastated economy.
Those who continue to ignore Indonesia in June 2002 however, are living in the past.
Which country provides the majority of foriegn buyers of apartment or condominium units in Singapore? According to Cynthia Wong of Jones Lang Lasalle, Singapore, the answer may well surprise.. Who are listed in the top buyers of a major brand watch retail chain in Singapore? In both cases the answer is Indonesians. The implication is clear - there is clearly much money in Indonesia, though the overwhelming rakyat of middle class, rural, farming and working class consumers, have taken a hit. That some of that money is being spent invested overseas by this privelaged class is bye the bye, and will decrease as Indonesia regroups. After all, Singapore is bustling money into Indonesia at far greater levels relatively.
Admittedly from a long way back, Indonesia also distinguishes itself by having the greatest growth in market capitalization in the past 12 months as measured by the Dow Jones Global Index of all Asian markets, the US and Europe as a whole. That by itself should be enough to prod savvy marketers and investors into action. Add to this that the Jakarta Stock Market has risen more than 30% in the last 12 months, rivaling Bangkok's 40% rise as the best performing stock market index in the region. Trade balances are up substantially, interest rates are up, and the Rupiah is up almost 20% against the Us dollar from last year at the same time.
The global growing militancy of Islam fundamentalist groups is of course a factor that affects Indonesia's security and international relations. Separatist movements continue pressing their agendas around far flung provinces, nobody is exactly sure how the internal political struggle between Islamists and moderates will pan out in future, though Megawati's moderate and multi-cultural approach seems to be stable. Other countries both in Asia and without regularly accuse Indonesia of harbouring 'terrorists', though this is hardly surprising given Indonesia's massive island studded geography and population, of which over 90% are Muslim. We need not be reminded that Indonesia has the largest Muslim population on earth (more than 2 Billion), but they are also more diverse than other Muslim populations ranging from the fundamentalist to the moderate to the lapsed.
Quietly and slowly, but substantively, the great archipelago of Indonesia is well on the way to recovery.
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Rod Davies, Orient Pacific Century Market Research