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Reuters: Top News

Saturday, November 15, 2008

Indonesia On Economic Line...!

Indonesia can play a key role in leading the Muslim world toward economic recovery, and help minimize the impact of global recession.

First, by managing its national economy to maintain growth, demand, imports and exports. The nominal Gross Domestic Product for 2009 is projected at $547 billion. Indonesia is already in the top 20 economies of the world. Visit http://id-economy.blogspot.com for more news on Indonesian Economics .

Indonesia is currently overtaking Belgium and Sweden. It will soon overtake Turkey, the Netherlands and Austria as it enormous size, resources and population come into play. It is a strong candidate to join the top 10 economies in the world within two decades.

Second, by mobilizing investment for oil, gas, energy projects, biofuels, infrastructure (roads, railways, ports), manufacturing and retailing sectors. It needs over $40 billion for electricity alone, to finance an additional 40,000 MWe of power by 2025. Indonesia will become a nuclear power, and plans four power stations. Total foreign investment needed overall during the next 15 years exceeds $100 billion.

Indonesia's economy is 53.9 percent free, according to our 2008 assessment, which makes it the world's 119th freest economy. Its overall score is 0.1 percentage point lower than last year, mainly reflecting lower scores in monetary freedom. Indonesia is ranked 22nd out of 30 countries in the Asia–Pacific region, and its overall score is lower than the regional average.

Indonesia has no strong economic institutions and scores better than the world average except in terms of government expenditures, which are low in formal terms. However, this is likely a sign of government weakness, not efficiency. Tax revenue is low as a percentage of GDP, but tax rates are high. Likewise, inflation is low, but the government interferes extensively with market prices.

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