Indonesia on Verge of Becoming an Economic Power
30 September 2010
A crew stands at the door of a public bus during rush hour at the main business district in Jakarta, Indonesia (file photo)
An expanding manufacturing base, an abundance of natural resources, a growing domestic market, a sound financial sector and a stable political climate all contribute to make Indonesia's economy one of the strongest in the world.
Emerging economy
Milan Zavadjil the International Monetary Fund's representative in Indonesia, says it ranks just below China and India in attracting foreign investment.
"Various investor surveys have it jumping up the rankings," Zavadjil said. "And an interesting survey puts it as the fourth most likely place for investment over the next several years among emerging markets."
The Asian Development Bank recently forecast that Indonesia will see gross domestic product growth of 6.1 percent this year, and 6.3 percent in 2011.
Zavadjil says Indonesia's financial sector was not sophisticated enough to get involved in the complicated and ultimately disastrous investments that contributed to the global economic crisis in 2008. So while much of the world was thrown into recession, the fundamentals of Indonesia's economy remained strong.
"Indonesia had a very small fiscal deficit, very small borrowing requirements, a low external government and consumer debt, adequate foreign exchange reserves," he added. "The banks were well capitalized and liquid."
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