It’s
been a shaky start to the new year for most people in most countries. The
economic news emanating from all points of the compass vary only in their
depths of gloom. Even in Asia, slowdowns in China and India are causing ASEAN
to take note.
In Singapore, belt-tightening has officially
begun with ministers taking hefty pay cuts. In Australia, increasingly hooked
into the fortunes of Asia, unemployment and under-employment are at their
highest levels. Most in the West have at least a sluggish decade ahead of them.
Consequently, many economies in the East are getting ready to grind their way
forward for a few years to come. There are very few exceptions. Indonesia is
uniquely positioned to be one of those rare gems.
In comparison to its two bigger Asian
neighbours to the North, Indonesia has some distinct advantages. Both India and
China are resource-poor in contrast with Indonesia. The differences in the size
of population make this archipelago’s enormous natural wealth even more
dramatic. Much more, for much less. These fundamental contrasts put into sharp
focus other major discriminators. Unlike China, the overwhelming proportion of
Indonesia’s exports is essential to countries for basic infrastructure
development. That hunger needs to be fed, regardless of economic constraints,
in good times and bad. When compared to India, the daunting challenges of
poverty and unemployment pale into insignificance. The millions living on the
fringes of Indonesia’s consumer economy can be brought into the fold with
relative ease and greater speed, not so the hundreds of millions in India and
China.
Indonesia’s healthy domestic marketplace lies
at the core of its economic prospects in these troubling times. Contributing
almost 70 percent of Gross Domestic Product year after year, its consumer
economy remains its main engine of growth. At a time when prospects for return
on investment are murky in most markets, this country stands out like a beacon.
There has never been a better time for both private and public sectors to
invest in the domestic market. The opportunities span the entire spectrum:
infrastructure, value-added goods and services, healthcare and education, as
well as science and technology aimed at improving the everyday lives of
ordinary Indonesians. More and more consumers are ready and willing to spend,
if more and more investors are ready and willing to respond.
Confidence is an essential catalyst for
progress. Too often, endless talk of impending doom leads to self-
fulfilling prophecies. But the Kadin-Roy
Morgan Consumer Confidence index continues to soar at record levels, in sharp
contrast to similar indices the world over. Up 1.3 points over the previous
month to hit 146.5 in December, the rating stood tall on the world stage,
looming over the rest. “Now is a good time to buy major household appliances”
said 57 percent of respondents, a particularly reassuring sign of the country’s
economic prospects. Against the odds, the consistency of the confidence levels
is remarkable indeed.
Inevitably, such confidence will foster strong
nationalist sentiments, among the elite in particular. For a large developing
country that is also a young democracy, a healthy dose of pride can only be
good for the never-ending task of nation-building. But if those sentiments
instigate inward-looking, barrier-raising protectionism, it will ring alarm
bells loudly across the globe. The repercussions will damage not only the
country’s economic potential that is increasingly earning the respect of
investors. Politically, on the world stage, such a backward step would diminish
Indonesia’s growing capacity to influence global accords as well as regional
peace and prosperity.
Commenting on the December results, Suryo
Sulisto, Chairman of KADIN, the chambers of commerce, said: “The jitters that
caused the small dip last month have evaporated. Confidence levels are back at
the same dizzy heights as before. The upswing is exceptional, not only in
contrast with other G20 countries but in comparison within Asia as well. Both
China and India have revised growth forecasts downwards but Indonesia is
holding steady. For now, Indonesia remains unscathed. The sabre-rattling in the
Strait of Hormuz has not affected oil prices yet. If the seas remain calm, the
threat of an oil price rise will not rock our boat. The oil subsidy is taking
too much of a toll on Indonesia’s treasury already.”
The subsidy isn’t the only worry. Public anger
on issues ranging from the protection of minorities to land acquisition is
taking its toll on the collective psyche. The list of unspent state-sanctioned
budgets is almost endless, limiting progress. The fight against corruption has
become a lost cause in the public eye, drawing more disdain than kudos. The
president’s inability to take decisions on matters of national importance
continues to draw criticism, a likely feature of his legacy. But there is no
denying that the country made steady progress on the economic front despite
those failings, under his watch. Even on auto-pilot, Indonesia keeps on
cruising through turbulent weather. That’s yet another sign to take comfort
from.
The opinions expressed are my own. The
conclusions are based on the country’s largest syndicated surveys conducted by
Roy Morgan Research. More than 2,000 respondents are interviewed each month,
every month, and projected to reflect 87 percent of the population over the age
of 14.
Debnath Guharoy, Roy Morgan
The Jakarta Post
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