Don’t Drop the Ball On Indonesia's Economic Growth
Indonesia’s economy continues to gain traction despite the ongoing political storm swirling around the Bank Century bailout. That the economy grew by 4.5 percent last year, higher than earlier anticipated, is indeed something to cheer about, but we must be careful not to squander this growth. Better-than-expected exports and resilient domestic consumer spending are the main factors behind the strong economic performance. According to data released by the Central Statistics Agency (BPS), recovery in the global economy during the fourth quarter of 2009 helped exports surge, while at the same time strong household consumption sustained Indonesia’s economy.
This is further proof that the economy remains on a sound footing, prompting even billionaire investor George Soros to pay the country a visit. He called on Vice President Boediono to seek more information on the country’s financial industry, noting that the country is now firmly on the global investment radar screen.
This is all good news, but what does it mean for average Indonesians, especially Jakarta residents? How does such strong growth impact ordinary lives, raise living standards and create wealth?
Jakarta’s economy has been growing rapidly in line with the national economy. As the fast-changing skyline vividly illustrates, new wealth is being created and along with it new and better-paying jobs in sectors like service and information technology. This growth is also giving birth to a group of new, young entrepreneurs who are injecting new ideas into the food and hospitality industries.
Middle-class housing estates are springing up around Greater Jakarta, fueling the local economy. Banks are busy rolling out new lending products in the hope of piggybacking on the consumer spending spree.
An average Jakartan today can enjoy the fruits of his hard work by owning his own home and new consumer products — something unimaginable only a decade ago. Our mobile phone industry is one of the fastest growing in the world, with even lower income groups now able to own cellphones and thus connect with the world.
A growing middle class is also good for politics, as people with assets are less likely to revolt or seek wholesale political change.
It is critical that the authorities not drop the ball. The Jakarta administration must quickly push ahead with new infrastructure projects such as toll roads, clean water and sanitation. Jakarta remains the only major Asian capital without a citywide sanitation system. Connectivity via better bandwidth must also be improved by empowering private investors.
As the nation’s political and economic hub, Jakarta is benefitting from the strong economy. This is good news for its citizens as it brings better living standards, more jobs and new social infrastructure such as modern hospitals and up-to-date schools. There is much to look forward to.
Source: Jakarta Globe