Is Indonesia Ready to Play in the Big Leagues?


"We're reminded that success is one of history's best predictors of failure."

On a purchasing power parity basis, Indonesia is already the 16th largest economy in the world, ranked just two behind Canada. . .and ahead of Australia (18th), Netherlands (20th), Saudi Arabia (22nd), and South Africa (25th). What's more, in a year of worldwide contraction, this economy seems poised to grow another 4.5%.

With a population of 237 million people, this large economy offers less than $US4,000 per capita. So much remains to be accomplished before declaring successful entry as a serious player in the big game. While many regard the American economy as the world's most successful, it may apply only in the past tense. Many see the U.S. as on the verge of total collapse. We're reminded that success is one of history's best predictors of failure.

China is poised to overtake the U.S. as a key power broker. GDP is but a limited measure of an economy's strength. While the U.S. economy is still the largest in the world ($14.2 trillion) compared to China's $7.9 trillion, who would describe this economy as strong? It is often said that, in times of crisis, only bankers make money. China is America's banker. The controls are changing hands. . .and no one is 'too big to fail.'

As Canadians, with 78% of exports sent to the U.S., we are reminded that you are only as strong as your weakest link. As an economy so dependent on exports to one country, our future is inextricably tied to the plummeting U.S. dollar.

When a mouse sleeps next to an elephant, it sleeps with one eye open. Conversely, resource-rich Indonesia sleeps next to a burgeoning China and just as close to India.

Success depends on timeframe, space, perspective, distribution and a complex set of inter-relationships. As for Indonesia's prospects for success, one must ask and answer, 'compared to what?' Compared to other countries; compared to itself in the past, in the future, across internal categories, across internal regions and compared up and down class structure.

Indonesia needs to do an intricate dance on a high wire, attracting foreign investment while not re-colonizing the nation, and teasing backstage control out of the hands of those whose very presence threatens Indonesia's successful entry into a worldwide theatre.

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