Indonesia Should Aim Higher: The Economist

The Jakarta Post , Jakarta Tue, 09/15/2009 12:12 PM World

Indonesia has not only survived the catastrophic financial crisis and a political calamity in 1998, it has now turned into a stable democracy with a robust economy, The Economist says.
The London-based weekly newspaper gave the glowing assessment in a special report on Indonesia in its Sept. 12 edition, highlighting the success this country has made in the past decade.

"Foreigners may not realize, its boosters defensively suggest, that the world's third-largest democracy and fourth most populous country, with more Muslims than any other, is actually doing rather well," the Economist said in its 15-page report titled "A Golden Chance".
Indonesia has managed to achieve a remarkable turnaround in a relatively short period of time, and with its impressive economic growth, it can now be considered as a serious contender against the other fast-growing emerging markets, or BRIC countries: Brazil, Russia, India and China.
Yet, less than a decade ago Indonesia was considered a basket case.

The influential newspaper says the Indonesian economy has proven to be resilient enough to withstand the recent global downturn and maintain solid growth rates for years to come.
The country's economy will continue to grow with the swelling number of Indonesians living in cities serving as the engine of growth.

By next year, about half of Indonesia's population will be living in urban areas, which will lead to surging consumption, the country's main driver for growth, the newspaper says.
While its democracy is still "messy" and "needs fixing", the newspaper says Indonesia will likely enjoy political stability, a condition that will give Yudhoyono the "breathing space" needed to bring the nation out of its current state.

"Indonesian policymakers, naturally, congratulate themselves on having steered the country away from the abyss." The newspaper however warns against complacency, as Indonesia is not yet out of the woods. "Instead, policymakers should be worrying about the fragility of the gains they have made, and about how far the country still is from realizing its potential."