Indonesia's contribution in ASEAN's economy

Indonesia’s position is strategically important because of its involvement in ASEAN.  Why I said it’s strategic? Because Indonesia is one of the founders of the ASEAN.  In fact Indonesia have the biggest population in ASEAN, approximately 240 million people lives here or almost 50% from ASEAN’s population (500 million people) this country have many potential market.  We have many natural resources here like Petroleum, Gold, Silver, Iron, Coal, etc.  and the agricultural sector develop here, so we don’t need import so many food here, it’s different from Arab –for example- they have biggest Petroleum resources but they import so many food.  Don’t forget we also have the marine and fishery sector, it’s not the main sector, but we still have many room to maximize it. For sure Indonesia began to show stability in economic growth. This can be seen from Indonesia’s ability to survive the economic crisis greater in 2008. If the 1997 economic crisis only affects the countries of Asia, the economic crisis in 2008 hit almost every country in the world.

 Those many potential thing can bring us to be the largest economy –US $ 845.680billion (GDP Nominal IMF 2011)– in ASEAN. 

The positive and negative impact

With our more contribution in ASEAN’s economy, we can increase our economy growth percentage.   Increasing the investment, decreasing the unemployment number, etc.  It’s a huge market here, 240 million people and everybody wants to be what we called ‘population theme investments’, you see 240 million Indonesian, 7 million people each year graduated from lower income to middle income for the last seven years, that’s 50 million people, and if you talk about 7 million people a years that’s twice of the population of Singapore, these people suddenly require more consumptions, better education, they consume more, they buying more handset, more recycle, next thing they want to do is they want a homes. The market is big, I don’t think it’s saturated, everybody wants to get a piece of that, but we need to be careful finding the right investment platform for because it’s a growing market and still dominated by the key strategic investors but for private equity players there is niche for us to participate.

It’s a large economy, the largest in South East Asia, 4^th most populous country,  the third largest democracy, it’s definitely need more private equity player in Indonesia, we see more and more Pan-Asian Fund coming into Indonesia, we never get to see them before, like five years ago, nobody would even want to make a trip to Jakarta. Now, we see a couple Pan-Asian Fund set up office in Jakarta, so competition will be higher and would be greater, I think there would be valuation issues for top tier transactions and investment opportunities, but for this large, which is about 60 percent of Indonesian economy is populated  by Small Medium Enterprises, and this is I think attractions and potentials for homegrown private equity, independent private equity operator like us in terms of funding of investment opportunities.

I think the big negative impact is we can’t compete to the another member if we don’t have a strong fundamental.  Globalization make us to be the International society, so the competition between others will be more difficult. 

We still have many weakness also such as that will be influence our contribution to ASEAN’s economy such as The poor, unemployment, infrastructure, education, corruption etc.  The poor is always be the problem not only for Indonesia but also other countries.  The poor is always linked with unemployment and education which mean that the poorness will be decrease if we are an employment and well educated person.  With good human resources, we can contribute more to the Indonesia and ASEAN’s economy.

Infrastructure is also influence Indonesia’s contribution in ASEAN’s economy, because Indonesia’s infrastructure is still worse, let’s take a look that apple fruit from China is cheaper than apple from Malang –for example- It’s impossible but that’s the fact.

What should we do?  In our Contribution to ASEAN’s economy

The success of ASEAN signed a charter with a strong foundation for the establishment of an ASEAN community and strengthen ASEAN’s role in dealing with a variety of architectural changes in the global cooperation.

How can Indonesia improve its role and coordinate its position in ASEAN?Although we have the biggest economy in ASEAN the other members will always compete us –for example- Thailand, Malaysia, and Singapore.  We have three main key to develop our economy and directly will affect and give contribution to ASEAN’s economy.  The first one is Domestic Consumption, The second is Infrastructure and the last is Investment.  Let us discuss the contribution of each main key in ASEAN’s economy.

Domestic consumption play important contribution.  Not only for the Indonesia but also the ASEAN’s economy.  We are the populous country in ASEAN, automatically our basic need such as Food, clothing, electronic equipments, etc. also be the biggest in ASEAN.  Indonesia don’t have enough supply from itself, so we must import it from other country included the ASEAN’s member.  I think import it’s not always be the bad things.  Why I said that?Indirectly we can ‘increasing’ the others economy member and decreasing the unemployed numbers because the factory will look more people to increase the production to fulfill the quantity of demand.  Although we must be independent to fulfill our quantity of demand.  But we can’t be a free import country.  Shortly, we ‘help’ other ASEAN member’s economy.

Second one is infrastructure.  Many people things that infrastructure it’s only give contribution to Indonesia.  But take a look deeply, if we have a good and strong infrastructure.  It will affect the other member’s economy directly or indirectly.  With good infrastructure in Indonesia, the poor group will be decreasing fastly, the production will be more efficient and let’s go back to the first main key –Domestic consumption- will be  increasing and it will not only bring the positive effect for Indonesia but also the others. 

The Last is investment.  Our BUMN (Badan Usaha Milik Negara) is starting the expansion to others member of ASEAN.  Directly it will decreasing the unemployment and increasing the member’s economy.  I think it’s not only BUMN but also BUMS (Badan Usaha Milik Swasta) such Indofood, Semen Gresik, Lion Air, etc.  They have expand the business in the others ASEAN country.  Others ASEAN company is also expand to our country such as Air Asia, Axiata, etc.  So there is a symbiotic mutualism between Indonesia and the others.

Those contribution in ASEAN’s economy make us to be always the best country in ASEAN.  As one of the founders of ASEAN, ASEAN alteration in a challenge for Indonesia to better show the new ASEAN leadership in order to welcome the establishment of the ASEAN community in 2015.

There is no ivory that was cracked, so did the role and leadership of Indonesia in ASEAN. Therefore, continued to improve leadership in Indonesia and ASEAN in the interests of our common duty of all to increase the bargaining power of Indonesia.

Sources List

http://en.wikipedia.org/wiki/Indonesia

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

http://arishu.wordpress.com/2009/09/02/role-of-indonesia-in-asean/

http://www.aseansec.org/

http://news.xinhuanet.com/english2010/photo/2011-11/17/131252499_11n.jpg

http://www.heritage.org/static/reportimages/0AD57CABDBE6BF78CC2515D157B1793C.gif

   

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