Foreign Policy has 5 reasons to prove Indonesia’s miracle. Check it out.

(original article is available here.)

 

 

What myths do Indonesians, and the whole world, need to tackle about Indonesia themselves?

1. Indonesia’s economy is weak and unstable.

2. The growth is overtly concentrated in Jakarta.

3. Indonesia is no jewel without natural resources.

4. Indonesia is an Asian tiger (no longer!)

5. Rapid population growth drives Indonesian economy.

Click the link above to answer all your whys whirling in your mind.

N.B.: what’s another typical feature of Indonesia’s bustling economy? Its intolerable traffic jam taking place in major cities.

Moving beyond BRICS

THE CENTURY OF THE EMERGERS

GOING BEYOND BRICS

**********

 

If combined, their dynamic, vibrant economic growth will prevail the main powerhouse that drives that of the whole world for in minimum one or two decades to come. The roles United States and European Union used to dominate in the past have been increasingly shifted instead to developing countries, largely thanks to the current financial malaise and the booming workpower outsourcing trends, in which major corporations in most of the advanced countries have commenced to reconsider the gigantic manpower all these countries have while their bases do not. Thousands of American companies have been vying for brummagem, cheap-jack manufacturing cornerstones either in China or any developing countries elsewhere in the world. Russian economy will still fluorish on the ground of its tremendous natural resources yet to be mined; there are dozens of mining giants currently on the list to extract away all these priceless metals and minerals required to ensure the global economic powerhouse will keep on functioning.

But here comes the challenge: how long will BRICS dominate the lexicon of 21st-century international relations? Or more importantly, how long will this decade-old, newly-coined neologism survive?

BRICS is not without its own heels of Achilles. Among the countries, there tends to be an overarching, outlying inequality in terms of GDP comparison. It takes the entire GDP of Brazil, Russia, India, and South Africa (which if summed up would have been approximately 7 trillion US$) to counterpoise that of China. The inequality extends to the geopolitical roles China plays in global stage. Unlike the four countries, the ‘Big Brother’ has much more capability, given its cash-rich foreign exchange reserves and gigantic population, to bind contracts with myriad regimes of resource-rich countries, no matter whether they have good records in human rights or not. It does also host a titanic diaspora numbered at more than 100 million, scattered throughout the entire globe, who are economically influential in dozens of countries. It is still in a period of ‘harmonious relationship’ with the rest of BRICS members, especially in terms of economic and trading agreements, but all of these will be further tested by an increasing ambition among all the countries to hamshackle superpower status, which in the future may sparkle possible conflicts among each other.

 

Officially, Twitter ‘reborn’ in China.

 

The existence of BRICS is further examined by the unavailability of democracy in Russia and China. Russia may have had a multiparty democracy, but the country remains occupied with terrors and despondency. There is little, or to a worse extent, no, protection for critics and dissidents, whose ideas are needed to improve the quality of the nation. China presents an even more formidable scenario. With economy pacing up rapidly, hundred million civilians are right now attaining the ‘middle-class’ status. And that also means more Chinese are becoming increasingly well-educated, and are able to relish access to sophisticated technology, particularly Internet. As we know, Internet has played a major role to trigger masses to overthrow iron-handed regimes, as have been shown recently in Middle East and North Africa. This is what Beijing becomes very worried about. The Chinese people in 21st century are in general no longer the Chinese people in 20th century we used to perceive. More youth are turning up increasingly aware that ‘there is something wrong taking place with our government, and we’ve gotta change it’. It is even strengthened by the mass availability of instant social networks which enable information to  be disseminated in no time, such as Twitter and Weibo. (as of today, Chinese government does not allow Facebook to lure Chinese users) The culmination point was reached when the Chinese bullet-train incident took place in July 2011, instigating a tsunami of anger and wrath in many of China’s social networks, which in the long run were blockaded and covered up by government’s agencies (there were even reports where police confidentially arrested and jailed Weibo users who were caught up to have tonguelashed the regime by tracking down their IP addresses. Moreover, the regime has currently passed a bill to obligate every social-network user to enlist their actual names, in accordance with those on their identity cards.) A handful of labor protests, despite the infinitesimal amounts, began to unravel in many factories throughout the country, demanding better equality and better pay, albeit they often ended up in brutal crackdowns by police authorities. The dreams of ‘real democracy’ in China, as a few envision, will still remain a castle in the air for this moment, but sluggishly, the supporters are popping out throughout the whole entity, even though the time taken to embody these ideals might be excessively long, and even would not be achieved within a generation.

 

Mexico City’s GDP is approximately one-third of the country’s total, with figures amounting to almost 400 billion US$. As an additional fact, it is inhabited by as many as 20 million people, or one-sixth of the nation’s population.

 

Given all these propositions, experts are currently proposing that a few countries be added in to the list, which will automatically convert the acronym’s name. The first option is Mexico. In the recent years, it has showed off strong economic performances with a high turnover for its GDP. The economy fluorishes very well because of its strong consumption sector, its reduced dependency on extraction-related sectors, such as oil & gas and mining, and its successful efforts in diversification, as shown by the examples: its automobile production currently surpasses that of Canada and United States, the television’s surpassing South Korea’s, and the smartphone’s surpassing those of China, South Korea, and Taiwan, thanks to its abundant number of young-aged workforces. In addition, Mexico has a strong economic cornerstone, sustained by its low debt-to-GDP ratio, which approaches no more than 20%. Beyond economy, it also adopts a very free democracy, which allows ideas to be easily circulated among people. Nevertheless, it also faces a serious thorn in its own flesh: the ongoing drug war by security forces which has claimed more than 40,000 lives, since its glissade by President Felipe Calderon in 2006. Corruption rates remain high, especially in the police forces. Many states in the country are ravaged by so-called ‘jungle law’, as they are dominated by competing drug cartels, whose members consist of ex-troops and policemen who had been laid off.

 

Seoul, South Korea.

 

Besides Mexico, analysts also put South Korea in the consideration list. It tops among all the other emerging markets in terms of GDP per capita, which has surpassed 23,000 US$ as of 2011, making it almost eligible to be included among the G7 list. Moreover, of all the 64 identified emerging markets in the planet, it is the South Koreans who perfectly excel in terms of educational quality, environmental conservation, science, technology and infrastructure. It has also witnessed high economic growth in recent years, despite the fact that it was once hit quite hard by 2008/2009 global recession. Still, two main challenges are facing the country right now: the belligerence status with North Korea, which indicates any possible open warfare might occur sometime in the future between the divided states, and the near-zero and possible negative population growth rate, which menaces a possible decrease as far as 10% in 2050.

 

As many as 15% of Jakartans (the demonym for people living in the megapolis) – numbered at 1.5 million – do earn more than 10,000 US$ per capita per annum, the highest percentage compared to the other major cities in Indonesia.

 

Lastly, there is a country considered to be one of the world’s most strategic emerging markets after evaluation by substantial number of economists: Indonesia. Together with Turkey and Egypt, they are the only triumvirate which always appear in all emerging-market indices released by behemoth, rock-star investment banks and financial institutions, as listed consecutively: Next-11/BRIC, CIVETS, FTSE, MSCI, The Economist, Standard&Poor, Dow Jones, and EAGLEs/NEST. In terms of geopolitical vocabulary, they share the similar advantage, serving as the main gate for intercontinental trade. Turkey is the main ‘bridge’ connecting Europe and Asia, Egypt linking Africa, Europe and Asia simultaneously, and Indonesia correlating Asia and Oceania. Yet, unlike the former duo, Indonesia is endowed with a plethora of diverse natural resources, either extractive (with the sole exception of oil and gas) or edible. Besides, its economic performance has improved dramatically ever since the 1997/1998 maelstrom, as seen from its resilience and resistance against the 2008 recession which sent a hard blow into the global economy, thanks to the strong consumption sector. It has also succeeded in lowering its debt-to-GDP percentage, from a record-high 150% during the peak crisis in 1997 to approximately 25% by the commencement of 2012.  Furthermore, its abound young generation (those aged between 15 and 40), the most pivotal factor in determining the long-term success of a country’s economic growth,  constitutes more than two-thirds of the total population, enabling Indonesia to go on sustaining vibrant economic development in the long term.

However, albeit democracy has been fully restored for more than 12 years, Indonesia still has piles of homework it needs to accomplish in order to maintain the success. Its Corruption Perception Index (CPI), released annually by Transparency International, has recorded only a slight improvement, from 140 in the beginning of the first decade to 120 in the second. Bureaucracy remains complicating particularly for investors, as often there are many provincial-level and regency-level regulations which in fact contradict with the statutes already passed by the legislature. Security remains quite vulnerable as there may emerge sectarian conflicts, labor protests ending up in anarchy, political dissensions among parties involved, armed robberies, societal brawls, etc. Infrastructure remains lagging behind many other emerging countries (as a comparison, China has 40,000 km of highway, Malaysia 3000, while Indonesia? A bit more than 700.) This is why there is no doubt that its infrastructural quality was ranked 90 worldwide in 2010, and remains unchanged since then. State administration remains rattletrap, as obviously seen from the wanton acts by land authorities in giving certificates of land ownership to certain parties who don’t realize that the land they purchase have been actually possessed by someone else. That is why land disputes often spark deadly conflicts between farmers and corporations involved. For the government, it will be an arduous task, especially for a country whose credit rating has elevated to the status of ‘investment grade’, the bestowal granted only for newly industrialized countries or those with low bureaucracy, corruption rates, and high legal certainty.

By the outset of May 2011, President Susilo Bambang Yudhoyono has recently launched a 15-year economic-development scheme entitled ‘Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia’ (MP3EI), translated in English as ‘Masterplan for the Acceleration and Expansion of Economic Development of Indonesia’, scheduled to take into account from 2011 to 2025, with the aims of multiplying its GDP to 4.5 trillion US$ by the time the program has ended. Through investments by government, state-owned enterprises, national and foreign private corporations, the program is expected to have invested more than 4000 trillion rupiah (equivalent to 450 billion US$) in national infrastructure within the given period. In the first year of its implementation, as many as 100 projects worth 350 trillion rupiah (more or less 38.5 billion US$) have gained approval by authorities in Jakarta, but still, many businesspeople consider it a ‘major failure’. What makes them  to say so?

Many of them are yet to await agreement by authorities of the provinces involved, excluding the regencies and the districts. Some simply garner consent, but without much financial assistance. It all happens at the same time more economists aspire that Indonesia be admitted to BRICS (the new acronym will be BRIICS, or BRICIS) than they do to Mexico, or South Korea. What an irony.

 

 

**********