G-20 nation profiles: Indonesia
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WHO IS THE LEADER FROM INDONESIA ATTENDING THE G-20 SUMMIT???
The Indonesian to watch will be the southeast Asian nation's rock star finance minister, Sri Mulyani Indrawati. For the last five years, Ms. Mulyani has led the charge against corruption from within the Indonesian cabinet -- cleaning up the famously graft-ridden tax and customs offices among others.
Perhaps most significantly, she brought a measure of stability to Indonesia's financial sector and attracted more foreign investment through various reforms. Indonesia is now one of the best performing economies in Asia and is expected to come out of this financial crisis stronger than it went in. Ms. Mulyani knows that Indonesia's economic clout is on the rise and can be expected to try wielding it while in Pittsburgh.
WHAT ARE THE ECONOMIC CONDITIONS IN INDONESIA?
Indonesia's economy continues to significantly outpace its neighbors and is growing faster than any other in the G-20, save the Chinese and the Indian economies by a sliver. The government has predicted 5 percent growth next year, an astounding number considering the state of the world economy.
Fortunately, Indonesia has what all investors love: an economy driven primarily by a domestic market. The rupiah has so far strengthened 11.3 percent against the dollar this year, making it the best performer in Asia, while the country's main stock index has gained a whopping 67 percent, ranked third behind China's Shenzhen and Shanghai markets. Most happily, especially considering the Asian financial crisis in 1997, Indonesia's banks are some of the most secure and best capitalized in the world.
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WHAT IS THE GENERAL MAKE-UP OF THE INDONESIAN ECONOMY?
Indonesia is the largest economy in Southeast Asia. Its GDP is more than $511 billion, making it the world's 19th largest economy. Its major industries include pulp and paper, palm oil, textiles, oil, gas, coal, tin and rubber. Many of these export-driven industries are hurting, especially since more than 10 percent of Indonesia's exports go to America. Luckily, with 240 million people, the country has managed to prop itself up under massive amounts of domestic consumption.
The re-election of reformist president Susilo Bambang Yudhoyono to a second five-year term has been lauded by international investors who have high hopes for Indonesia. Its strong domestic market coupled with an improving market for foreign investment means Indonesia is one of the rosiest emerging economies. Many have suggested the country could join the BRICs, or Brazil, Russia, India and China, as one of the world's fastest growing economies.
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WHAT IS INDONESIA HOPING TO GET OUT OF THE G-20 SUMMIT???
Most Indonesians are still getting used to their country being taken seriously as an important economy. For Ms. Mulyani, however, these gatherings are an essential opportunity to fortify Indonesia's growing reputation as an international economic leader. Ms. Mulyani, who was educated in the United States and is a former executive director at the International Monetary Fund, is highly respected among her international counterparts. In Pittsburgh she will likely continue to be outspoken, this time calling for more coordination between countries and their various stimulus plans.
WHAT ELSE SHOULD WE KNOW ABOUT INDONESIA'S POLITICAL AND ECONOMIC SITUATION???
The July re-election of President Yudhoyono bodes well for the Indonesian economy. He coasted to a 61 percent victory largely because of Indonesia's economic strength and its ability to ride out the economic crisis without any major wounds. During a major budget address this month, the president unveiled another stimulus package, valued at about $6 billion, and said he expected growth of 5 percent or more next year and a reduction of the budget deficit to about 1.6 percent of GDP.
First Published September 10, 2009 12:00 am
