Conference Presentation, Panel
Indonesia: The Emerging Secret
- Indonesia's economic trajectory is projected to improve significantly over the next 5 to 10 years due to downstream industry processing mandates and infrastructure investments in power, water, and toll roads.
- Corruption is anticipated to be reduced from a systemic issue to an exception only after 10 to 15 years of sustained anti-corruption efforts, while economic nationalism may surge during the 2014 election cycle before settling post-election.
- The 2014 presidential election is expected to feature a maximum of three candidates (Golkar, PDIP, and the Democratic Party) with voter participation ranging between 75% and 80%, including 40 million first-time voters among 140 million total voters.
- Political infighting is expected to be tested against economic growth in 2014, with the view that political constraints may not halt economic progress given the inheritance of a $1 trillion economy, low debt-to-GDP ratio, 67 bilateral investment treaties, and APEC membership.
- The middle class is forecast to double from 70 million to over 140 million by 2020, driven by increased consumption and the migration of export-based manufacturers from high-wage areas like Jakarta to lower-wage regions such as Central Java, contingent on infrastructure development.
- Future prosperity relies on maintaining current domestic confidence (approx. 85%) and pluralistic nationalism, though a "big problem" regarding social disobedience may arise if educational quality outside Java and equality are not improved.
- Long-term growth targets of 8% to 10% must be sustained for 10 to 15 years, requiring a leader capable of addressing the erosion of tolerance, rising religious friction, and the systemic difficulty of incentivizing investments like education that do not yield results within 10 to 20 years.
- Succession in 2014 presents a benchmark for democratic tradition, with the expectation that the new president must adopt a G20 and regional power perspective, move beyond a G7-centric view, and avoid historical blunders by adhering to current policies.