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. 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 this in a note titled “Chindonesia: Enter the Komodo,” a reference to the reptile found only in eastern Indonesia, that the three economies are Asia’s “next growth triangle,”
Together, China and India are increasingly becoming the biggest marketplace for almost everything sold on the planet, where Indonesia plays a symbiotic role in the emergence of China and India and “as this role becomes more pronounced in years to come, it will boost growth, investment and consumption.” India’s industrial production increased at the fastest pace in eight months in May. The South Asian nation, the biggest buyer of Indonesia’s palm oil and cashew, may overtake China next year as the world’s fastest growing major economy, according to the World Bank.
China’s economy will expand 7.2 percent in 2009 from a year earlier. Indonesia’s exports to China grew 16 percent last year, compared with a 10.7 percent expansion in demand from the U.S., the second-largest buyer of Indonesian products.
Indonesia’s economic acceleration provides a case for its inclusion among the BRIC economies, as released by Morgan Stanley in a report to clients last month.
Indonesia’s economy can expand “significantly” more than 7 percent once the new president spends huge money to build new roads, ports and power plants, according to World Bank’s representative in Jakarta.
Yudhoyono is set to win a second term after presidential elections this week, providing the 59-year-old former general with a mandate to double spending on roads and power to $140 billion by 2014.
In 2007, Tata Power Co., which is building a 4,000-megawatt plant in western India, bought a 30 percent stake in two coal mining units owned by Indonesia’s PT Bumi Resources. The $4.14 billion plant will run on coal from the Indonesian mines.
India’s coal imports will more than double to 100 million tons by 2012 from 40 million tons, which supplies coal in India and Pakistan. That’s about 40 percent of Indonesia’s estimated coal production for this year.
As a leading supplier of commodities, Indonesia is leveraged to the growth of China and India, Indonesia is ready to rise in the world economic hierarchy and take its place alongside China and India.
Source : The financial Times