The Giant Tiger On The Rise

Posted on August 6th, 2010 at 10:32 am by Akhyari


By Akhyari Hananto

I am writing this article with shaky hands and accelerating heartbeat, taking deep long breathe to boost my confidence. I need that, because what I am going to deliver to you is something ‘BIG’ and something, where probability of it to become a reality is 50:50. Probability aside, I have right now the full confident that THIS will in fact, become reality, this is going to happen, and my people will prosper exponentially.

What triggered me to write this, was when I read about the better-than-expected Indonesian economic growth in Q2 2010 which reached a staggering 6.2%, when most analyst predicted that in Q2, Indonesia would grow a mere 5.5%. Foreign investment has been a major contributor to this huge growth as confidence in Indonesia improves significantly. Just last month, Japan’s Rating Agency upgraded Indonesia to an Investment grade country, there are also expectations that the world’s three leading rating agencies – Standard and Poor’s, Fitch Ratings and Moody’s Investor Service – will make similar moves soon, analysts said. Rising consumer spending is also contributing a lot, indicated by strong spending on cars and motobikes (this shows the exponential growth of middle class people), export has been soaring since early this year, tourists ups 15% Y-on-Y, FX is topping new milestone of $80 billion.

All indicators are positive! Enough said.

More importantly, Indonesia’s growth is likely to sustain for long. Indonesia has a young, growing population, which will be the fuel for Indonesia’s long term development and growth, and Jakarta, the capital of Indonesia, is expected to be the largest city in the world within two decades. Indonesia’s extensive resources and large population put it in a favorable position to attract investments and establish a strong domestic economy. Where else investors can go to after China and India, if not Indonesia?

To that extent, the outlook for Indonesia is good.

Many have said that BRIC, which had been fueling global growth for several years before the global financial crisis hit the global economy in the second half of 2008, should now include Indonesia. Another securities house has ingeniously invented the term “Chindonesia”: China, India and Indonesia, as Asia’s economic bulwarks. Even the World Bank has said that Indonesia could emerge as the “winner” of the current global economic crisis.

Indonesia is suddenly hot, back on the radar of global investors who, during the Asian financial crisis of 1997-1998, abandoned the country massively.

Ok, now if all parameters can be maintained upwards, Indonesia will reach a growth of 6% or above this year. Assuming Indonesia’s growth will rise to its potential by 2012, the size of Indonesia’s economy will surpass, for instance, South Korea’s in 2016, Japan’s in 2024, the UK’s in 2031 and Germany’s in 2040! In short, Indonesia could merit inclusion in the G7 by 2040. Even if Indonesia’s economy only grows by the average annual rate seen during 2000-2008 (5.5% in average), Indonesia is still likely to be in the G7 by 2045.

I have this convincing chart of IMF forecast here (normally, please bear in mind, IMF always underestimates economic growth).

So, yes… the giant tiger is indeed on the rise now.

Popularity: 7% [?]

Share this Good News!
  • Print
  • Digg
  • Facebook
  • Mixx
  • Google Bookmarks
  • email
  • Reddit
  • Technorati
  • Twitter
  • Yahoo! Buzz
  • Tumblr
  • LinkedIn
  • MySpace