The “I” in MINT: Why Indonesia?
Back in 2001, economist Jim O’Neil coined the term BRIC to describe the four economic powerhouses that the world should watch out for. The abbreviation, which stands for Brazil, Russia, India, and China, has since become a buzzword on the global economy stage and has sent investors flocking to these four countries to get a slice of the metaphorical pie; but not anymore. Things have started changing this year for many reasons. The rapid growth of the past has stalled and now the BRIC are seeing investors fleeing in search of better places.
So where are all these investors heading off to? The answer seems to be to the frontier markets, a category which consists of economies smaller than the BRIC’s. Once again, O’Neil has devised a catchy abbreviation for it: MINT, which stands for Mexico, Indonesia, Nigeria, and Turkey. He came up with the term while working on a BBC Radio series about the most populous economies in the world. According to him, all four MINT countries have favorable demographic prospects and interesting economic outlook even amidst the current tumultuous global climate.
However, many have questioned O’Neil’s choice, highlighting the fact that none of the MINT countries had been included in his BRIC list. In particular, experts and policy makers questioned his opinion about Indonesia, which most saw as always having more attractive economic potential than Russia. Tackling this skepticism, O’Neil stated that even though the young population in Indonesia was a tremendous asset, he did not believe that the country had the capacity to devise economic policies that are good enough to instantly realize its potential.
Since then, he evidently has had a change of mind about the country. He has been meeting with various Indonesians, ranging from the election candidates to the general shoppers in the mall, and found what he called “a healthy preoccupation with the country’s economic prospects”, about whether the country can do what it takes to reach 7% growth or whether it will settle for ‘just’ 5%. He himself believes that the situation is fairly good right now and if things continue in the same way and pace, the growth rate will be substantially enhanced.
In contrast, the Russian economy is expected to grow by only 2.5% annually for the next few years. This raises some very serious concerns because in the time to come, Russia will have to face demographic challenges. The population will increase even more and the economy will be pulled back. There are other concerns as well in terms of corruption, lack of fuel, and a weakened business framework. Investing in Russia might not be that great an idea now or even in the next 20 years. So, move over BRIC, here comes the newly MINTed hope for the future!
This article originally appeared in Global Indonesian Voices , an independent online media written by Indonesians abroad.