Indonesia has been one of the few economic bright spots amid the broader
slowdown in emerging markets – now it also has one of the world’s
fastest-growing pools of private wealth.
A report on global high-net-worth
trends, released Monday by wealth-research group Wealth-X, showed the world’s
fourth most populous country bucked the wider contraction in wealth, both
globally and in Asia, in 2012.
The combined value of wealth held
by ultra-high-net-worth individuals—defined as those whose wealth exceeds $30
million—in Indonesia soared 41.2% to $120 billion combined value of
ultra-high-net-worth wealth in 2012 from last year while the number of individual high-net-worth people increased
4.7% to 785. That is the highest growth rate of any of the countries’ wealth
pools measured in the report, and defied the 1.8% decline in global wealth and
6.8% fall in Asian wealth. The report covered 115 countries and sub-regions.
The Indonesian numbers should
come as little surprise to those who keep a close watch on Southeast Asia’s
largest economy, which reported 6.4% growth in the three months ended June 30,
from a year earlier.
“Indonesia’s demographics are
largely in its favor, with more than half its population under the age of 30
and a large portion of its population poised to enter the middle class,” the
report said.
“For foreign investors, Indonesia
is an important consumer market as robust domestic private consumption shields
it from global economic shocks.”
The economy has also benefited
from upgrades to its sovereign credit score to investment grade and growing
demand for its commodities, which include crude palm oil, coal and sugar.
Wealth-X said 40.7% of
Indonesia’s ultra-high-net-worth wealth is controlled by the nation’s 25
billionaires, who are on average valued at $2 billion each.
Indonesia’s wealth growth was
indeed the standout in Southeast Asia, which as a region reported a 0.9%
increase in total ultra-high-net-worth wealth of $574 billion.
Tiny Singapore, with its
population of five million and which has fast been fashioning itself as a
banking hub for the world’s wealthy, still boasts the highest pool of
ultra-high-net-worth wealth, as well as the largest number of such individuals,
many of them wealthy Indonesians who choose to reside and park their money in
the city-state, Wealth-X said.
The number of
ultra-high-net-worth individuals in Singapore fell 3.7% to 1,305 while the
value of their wealth dropped 8.8% to $155 billion. Despite its large wealth
footprint in the region, the wealth of its ultra-high-net-worth population is
still only one third the size of rival Asian financial hub Hong Kong.
The Wealth-X report is the latest
in a series of publications released by a research units dedicated to providing
intelligence on the world’s rich and super rich. Singapore and Southeast Asia
have featured prominently as focal points for such reports over the past year.
A report released last month by
Knight Frank and Citi Private Wealth estimates that Singapore’s GDP per capita
is the highest in the world, and predicted the country will hold its place as
the world’s most affluent country in 2050.
Earlier this year, Boston
Consulting Group’s Wealth Report said Singapore has the highest percentage of
millionaire households in the world, a title the city-state has held for two
years running.
Sam Holmes
Business & Investment Opportunities
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