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Indonesia’s unexpected success story

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Indonesia’s unexpected success story​


Mercedes Ruehl and Joe Leahy in Jakarta

4 HOURS AGO

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In 2013, the US investment bank Morgan Stanley dubbed Indonesia as one the “fragile five”, a group of emerging economies that it believed were especially vulnerable to a jump in interest rates in the US.

Almost a decade later, US interest rates are rising sharply, which is adding to the economic problems in the developing world. But Indonesia appears unruffled.

At a time when the global economy is being battered by the Ukraine war and the global energy, food and climate crises, Indonesia has emerged as an unlikely outlier, boasting both a booming economy and period of political stability.

Gross domestic product expanded 5.4 per cent year-on-year in the second quarter, well above forecasts. The country’s inflation rate at 4.7 per cent in August, prior to a recent petrol subsidy cut, is one of the lowest globally. Its currency, the rupiah, is among the best performing in Asia this year and its stock market is hitting record highs.

The resource-rich archipelago, south-east Asia’s largest country with 276mn people, is riding high on soaring commodity prices. Exports rose 30.2 per cent year-on-year to $27.9bn last month, the most on record. The world’s largest producer of nickel, a critical component in electric vehicle batteries, Indonesia is putting in place plans to benefit from the upcoming boom in EVs.

Much of the credit for this boom has gone to Indonesia’s President Joko Widodo, who has managed to maintain popularity with both ordinary Indonesians and investors alike after eight years in power. A poll released this week by research firm Indikator Politik Indonesia showed 62.6 per cent of Indonesians approved of the charismatic former furniture salesman’s performance, down about 10 percentage points since before the fuel subsidies were cut, but still leaving him as one of the world’s most popular democratic leaders.

Support for Widodo, who is known as “Jokowi”, is so strong that at one point his supporters were pushing to change the constitution to allow him to stand for a third term in office.

Widodo will have a chance to show off this prosperity to the world when he hosts the Group of 20 summit in Bali in November. He plans to use the event to court interest from global investors, including for his most ambitious and controversial plan yet — a more than $30bn proposal to shift Indonesia’s capital from Jakarta to the jungle-clad island of Borneo, a project that could yet decide his legacy.

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“What we want to build is [a] future smart city based on forest and nature,” the president tells the Financial Times over a lunch of spicy soup and Japanese barbecue at the presidential palace in Jakarta, his face lighting up at the mention of the new capital. “This will showcase Indonesia’s transformation.”

But even as investors flock to see the new Indonesia, some worry about the sustainability of its newfound stability. Next year, campaigning begins for the 2024 election and Widodo does not yet have an anointed candidate to carry on his agenda. Critics also say he could have done more to further embed Indonesia’s young democratic institutions, leaving it vulnerable if a more venal leader comes to power in future.

“So many emerging markets have problems, Indonesia doesn’t have them right now. The economy is firing on all cylinders,” says Kevin O’Rourke, a Jakarta-based analyst on Indonesian politics and economics and principal at consultancy Reformasi Information Services.

“The problem is politics. We are 18 months from election day and that could present a stark contrast in Indonesia’s longer-term outlook. It could be good after 2024 or it could be quite bad.”

Political outsider comes good​

The Widodo who will host world leaders at the G20 summit is almost unrecognisable from the humble former mayor of Solo, Central Java, where he started his political career 17 years ago. Although he retains some of his old pastimes, such as listening to heavy metal and riding motorbikes, he has emerged as an astute political tactician at the national level. A political outsider, Widodo has favoured “big tent” coalitions, bringing friends and foes alike into his cabinet.

George Yeo, Singapore’s former foreign minister, calls it “democracy with Javanese characteristics”.

“That is: ‘We will campaign like hell, we will call each other names, but when the ballots are counted and we all know what the relative proportions are, we will form a coalition cabinet . . . and you’ll get your share’.”

This, he argues, has led to Indonesia’s current stability. One example is Prabowo Subianto Djojohadikusumo, a controversial former army general who ran a fierce campaign against Widodo in 2018 but is now the minister for defence.

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Prabowo Subianto Djojohadikusumo, a controversial former army general who ran a fierce campaign against Widodo in 2018, is now the minister for defence © Willy Kurniawan/Reuters


Investors say this political stability has helped the economy. With inflation relatively low, Indonesia’s central bank only raised interest rates for the first time in three years in August to 3.75 per cent. Banks are also still lending and exports are booming, not just from commodities. Widodo’s signature “omnibus law” that loosened employment regulations to help job creation has encouraged more foreign investment, as some producers diversify manufacturing away from China.

“You can see what Indonesia is exporting now, right across the board. You name it, textiles, garments, footwear, machinery, furniture, electronics, autos . . . things that create good jobs and incomes. This was the second year of double-digit, year-on-year growth,” said Reformasi’s O’Rourke, referring to Indonesia’s export earnings over the past several months.

Economists caution that Indonesia’s main commodity exports, such as coal and palm oil, still play a “big role” in driving growth. Commodity prices could start to lose steam this year as western economies slow down, says David Sumual, chief economist of Bank Central Asia in Jakarta.

“Next year will be quite a challenge,” he said. “That’s why I have downgraded my GDP forecast to below 5 per cent.”

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Inflation, which has been suppressed by fuel subsidies, could also rise quickly to hit 8 per cent by October, according to Priyanka Kishore, chief economist for south-east Asia and India at Oxford Economics.

“The central bank has jumped on the global hiking cycle later, they may have to do a bit more, more quickly, to tackle inflation now,” she says.

Indonesia has introduced restrictions on some commodities, including taxes on coal and nickel, that have jolted markets. Yet they have also helped the development of its domestic processing and refining sectors.

“The headline is clearly that things are going well,” says Eugene Galbraith, director at mobile phone tower company PT Protelindo and a longtime observer of Indonesian business. “All those things, both good and bad policy decisions, on balance equate to a broadly popular and highly regarded president.”

Advantage in natural assets​

One of Widodo’s principal achievements has been to expand infrastructure on an unprecedented scale for Indonesia, a vast country of 17,000 islands. His governments have constructed 2,042km of toll roads in eight years, he said, compared with about 780km in the prior 40 years, as well as 16 airports, 18 ports and 38 new dams. Costs have blown out on signature projects such as the Jakarta-Bandung high-speed railway — China’s first overseas high-speed bullet train project — while others have been poorly planned, with some shiny new airports in far-flung locations devoid of travellers. But the makeover is clearly visible, even to outsiders.

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The construction of an elevated track for the Jakarta-Bandung high-speed railway in Cikarang, West Java, last month © Dimas Ardian/Bloomberg

“I expected a change. But I didn’t expect such a change. Yes, there were traffic jams but they are not as bad as before,” the former Singaporean minister Yeo says of a recent visit to Indonesia. “Jakarta airport is better than any airport in the US.”

Yet by far the flagship industrial policy of Widodo’s second term has been his attempt to use Indonesia’s giant nickel reserves — which are tied with Australia as the world’s largest — to create a domestic electric vehicle industry.

In 2020, the government banned outright the export of nickel ore, forcing foreign companies, many of them Chinese, to begin refining it onshore. While most of the end-product is going into the stainless steel industry, the aim is to begin extracting more higher grade material for use in batteries. Indonesia is expected to provide a significant part of the new nickel supply needed by the global EV industry but its reserves of laterite ore require more processing.

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Excavators at a nickel mine in Morowali Regency, Central Sulawesi, Indonesia. The country is blessed with the world’s largest deposit of the metal, a key component in electric batteries © Dimas Ardian/Bloomberg

Widodo credits the restrictions with lifting the value of nickel ore-related exports from $1.1bn annually five years ago to nearly $20.9bn last year.

“After [this], we can export maybe more than 40 times or 60 times [more],” he says. “Indonesia has the largest nickel reserves in the world, around 21mn tons, [or] around 30 per cent of world reserves.”

He adds that the next step could be to extend the policy to Indonesia’s large reserves of bauxite and copper. Demand for the materials, used for aluminium production and renewables, is also growing globally. While the EU has challenged the export restrictions for unfairly limiting access of European producers in the World Trade Organization, Widodo is unapologetic.

“It can create jobs for the people and give the added value for Indonesia,” he says.

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The plan to refine Indonesian ore into battery-grade material is still just starting, with one refining plant commissioned in May last year and seven more in the pipeline, all on the island of Sulawesi, according to Isabelle Huber, a visiting fellow at the Center for Strategic and International Studies.

Near Jakarta, South Korea’s LG Energy Solution and Hyundai Motor Group are building the country’s first electric vehicle battery cell plant while Hyundai is building an EV plant nearby. Indonesia says China’s CATL, the world’s biggest EV battery maker, has agreed to invest in an EV battery plant and Widodo said he was also wooing Tesla.

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Erick Thohir, state-owned enterprises minister, says reforms are urgently needed if Indonesia is to create enough jobs for its young population © Dimas Ardian/Bloomberg

“Indonesia can still be a first mover and they’re lucky, they’ve got the most reserves [of nickel],” says James Bryson, director at PT HB Capital Partners, an investment advisory business.

The nickel industry, however, still faces problems. The most common process for producing battery-grade materials is through the high-pressure acid leaching (HPAL) method, which produces the largest quantities of waste, known as tailings. Indonesia bans dumping of this toxic residue into the ocean while “dry stacking” these tailings is difficult in a high-rainfall tropical environment.

This could be an obstacle to supplying western markets, adds Bryson, as EU and US EV battery manufacturers “won’t be open to processes which produce tailings”.

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President Joko Widodo talks with Elon Musk of Tesla during their meeting at the SpaceX launch site in Boca Chica, Texas, in May this year. Ecology groups have urged Musk not to invest in Indonesia’s nickel industry for environmental reasons © Courtesy of Laily Rachev/Indonesia’s Presidential Palace/Reuters

Another potential problem is the use of dirty coal-fired power as energy for nickel processing plants. This will make it hard for batteries sourced from this nickel to be sold in the US and EU. Environmental groups have urged Elon Musk not to invest in Indonesia’s nickel industry for reasons including environmental damage.

The issues around nickel are part of a broader series of criticisms of the country’s environmental record. Local coal producers are able to supply 25 per cent of coal to local plants at a steep discount to market price, hindering the ability of renewable energy projects to be competitive, including solar, in a tropical country. “It is really economic development versus ESG,” said one foreign-based investor with business in the country.

Widodo’s other priorities have included the country’s education system and its bloated state-owned enterprises. In both, he has appointed well-known entrepreneurs or businessmen to lead the changes.

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With other Southeast Asian countries such as Vietnam aggressively vying to attract industries diversifying out of China, Widodo’s government needs to make Indonesia’s workforce more competitive and to modernise its state-owned companies, whose assets are the equivalent of half of GDP.

State-owned enterprises minister, Erick Thohir, who once owned Italian football team Inter Milan, says the reforms are urgently needed if Indonesia is to create enough jobs for its young population.

“If you look at the Indonesian population, it’s 270mn. The majority of our demographic is young. If they don’t get jobs, a country as big as Indonesia will create problems for the region,” says Thohir.

Corruption concerns​

Widodo’s hosting of the G20 has thrust the question of the president’s legacy into the spotlight.

Investors worry that he has no clear political successor as the 2024 election draws closer. Lacking his own political party, he has so far been unable to clinch a nomination from a political party for his apparent preferred candidate, Central Java governor Ganjar Pranowo. “Ganjar has yet to be nominated by a party and every party already has a candidate. He’s an emperor without an empire,” says PT Protelindo’s Galbraith.

Critics also say that under Widodo, the powers of Indonesia’s once formidable Corruption Eradication Commission (KPK) have been weakened. The commission’s personnel were converted from staff of an independent agency to civil servants in 2019, undermining the body’s autonomy from the government, critics claim. Last year, Indonesia scored 38 out of 100 on a widely used corruption index by global group Transparency International, on a par with Brazil and lower than India, Vietnam and China.

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5.4%

Year on year expansion of GDP in the second quarter of 2022

16

Airports built during the presidency of Joko Widodo, as well as 18 ports and 38 dams

2,042km

Distance of new roads built in Indonesia in the same period
Widodo insisted that the KPK remains independent and pointed to fines and jail time for politicians in recent years.

The president also has failed to undo hundreds of regulations mostly introduced under predecessors that discriminate against religious minorities, LGBT individuals and women, such as those compelling use of the veil for girls at school, said Andreas Harsono of Human Rights Watch.

“Jokowi doesn’t care as much about democracy or democratic reforms, such as the space for independent journalism or civil society. There is still a basic understanding of free and fair and competitive elections but the space for criticism has been restricted,” says another Indonesia analyst, speaking anonymously for fear of repercussions.

Utopian visions of a new capital​

Yet the issue that could decide the president’s long-term legacy — for better or for worse — is Nusantara, the new capital. The project’s proponents say flood-prone Jakarta is sinking, in some areas by 25cm per year, and that Indonesia needs to spread its development beyond the main island of Java, which accounts for 56 per cent of the population and a similar portion of the economy.

Nusantara will be three and a half times the size of Singapore and four times larger than Jakarta. The first phase of the project, which entails moving the presidential palace, the vice-presidential palace, armed forces, the police and other ministries by 2024, is being funded by the government. The development is slated to be completed by the country’s centennial in 2045, when Indonesia hopes to be the world’s fourth-biggest economy.

Bambang Susantono, a former Asian Development Bank official who was appointed chair of the Nusantara Capital City Authority this year, puts the cost for this first stage at “more than Rp50tn [$3.3bn]”, but insists this will not all be public money.

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A computer-generated illustration of Indonesia’s future presidential palace in East Kalimantan on Borneo island. Nusantara will be three and a half times the size of Singapore and four times larger than Jakarta © Nyoman Nuarta/AFP/Getty Images

“We are developing with a state-owned budget because we need to create market confidence,” he says. “[But] the interest from the private sector is there.”

Critics counter that building infrastructure on Borneo’s peatland is tricky, while moving tens of thousands of troops and building new military facilities for them is expensive. About 80 per cent of the project was meant to be funded by private capital, which is yet to materialise. One high-profile backer, Japan’s SoftBank, pulled out this year.
“I am sceptical that it can be done in the next few years,” says Evan Laksmana, a senior research fellow at the National University of Singapore.

Others argue Widodo will get the project to a point where it has to proceed. “Nusantara will be too big to fail,” says Fajar Hirawan, a researcher at the Department of Economics, Center for Strategic and International Studies.
But Widodo, who says he plans to dote on his five grandchildren and work with “nature” when he steps down in 2024, is adamant about the urgency of building the new capital.

The new capital is needed to ensure that development spreads beyond Java “so that progress can be [enjoyed] by all”, he says.

 
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As usual, there is always attempt to make negative point on some thing, do they understand that 62 percent approval even after the fuel hike increase is some thing good ? Does any riots and mass demonstration happen as many foreign analyst prediction that they expect to happen after fuel price increase ? There is no riots and only small people demonstrating peacefully.

I will likely post several negative analysts made by foreign institutions about Indonesia economic performance in early 2022 that AlhamduliLLAH dont happen as Allah still give His mercy to Indonesia.

Unlike flooding, heatwave, and drought elsewhere, Indonesia even gets rain season much sooner and it has been 3 years we get this positive climate anomaly, this is why our rice production has been in surplus since 2020, AlhamduliLLAH.

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Jokowi’s popularity drops over fuel price hikes in Indonesia​


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JAKARTA (Bloomberg): Indonesia’s President Joko Widodo’s (pic) popularity took a hit after his decision to increase fuel prices raised public discontentment over surging living costs, according to the latest opinion poll.

His approval rating fell by 10 percentage points to 62.6% from 72.3% in August, based on Indikator Politik’s survey of 1,200 people conducted between Sept 5-10.

That’s his lowest rating since May, according to the pollster, when there were similar concerns over soaring prices of cooking oil and other basic food items.

The lower rating for the president, better known as Jokowi, signals continuing anger over the government’s move to impose higher fuel prices on Sept 3, which triggered protests led by thousands of workers and university students.

Jokowi has defended the fuel hike as the "last option” available for cutting energy subsidy bills, even if Indonesians are already dealing with the worst inflation in seven years.

Public dissatisfaction over the price hike could intensify opposition to calls by some in the political elite to extend his presidency, which is in the second and final term. Some of Jokowi’s supporters have backed the idea of amending the constitution to allow for an extension.

 
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I think this is because of Indonesia's neutrality with Russia, and Indonesia itself is also a coal power.
 
The raise of economic prosperity is some how inline with the raise of conservatism of the Muslim population. This Canadian tourist said 95 % of Jakarta female wear hijab, and no we dont force our women to wear Hijab, as Quran stated : "There should not be any compulsion in religion"

 
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I think this is because of Indonesia's neutrality with Russia, and Indonesia itself is also a coal power.

Yup coal industry is really helpful, the scale of the industry to our economy is now 5-6 % of our GDP. Together with Palm oil industry, the industry really helps a lot under this current situation. But unexpected and unpredicted also happen as now coal price is still very high despite the oil price has come down, this is something no human ever predicted to happen as coal and oil price is always having similar path of price fluctuation.

Gas price is also very expensive and currently not following their usual price fluctuation that is tied to oil price. Indonesia is still in surplus for gas production, despite not as large as giant gas producers like USA and Russia. Here in Indonesia we can assure manufacturing investor about their energy needs inshaAllah, this energy security (with lower cost) has become Indonesia competitive advantage to lure foreign investors to come to our country.

With domestic fuel increase about 30 %, I expect Indonesia oil import will likely be decreasing until the end of this year, starting in the month of September, so Indonesia has chance to get trade surplus above 6 billion USD this month which is good to back our currency under this global economic pressure.
 
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Yup coal industry is really helpful, the scale of the industry to our economy is now 5-6 % of our GDP. Together with Palm oil industry, the industry really helps a lot under this current situation. But unexpected and unpredicted also happen as now coal price is still very high despite the oil price has come down, this is something no human ever predicted to happen as coal and oil price is always having similar path of price fluctuation.

Gas price is also very expensive and currently not following their usual price fluctuation that is tied to oil price. Indonesia is still in surplus for gas production, despite not as large as giant gas producers like USA and Russia. Here in Indonesia we can assure manufacturing investor about their energy needs, this energy security has become Indonesia competitive advantage to lure foreign investors to come to our country.

With fuel increase about 30 %, I expect Indonesia oil import will likely be decreasing until the end of this year, starting in the month of September, so Indonesia has chance to get trade surplus above 6 billion USD this month which is good to back our currency under this global economic pressure.
how it goes with multibillion project of converting coal into the gas and chemicals with some usa company?
 
how it goes with multibillion project of converting coal into the gas and chemicals with some usa company?

US company but look like under Iranian American ownership as CEO is Iranian ethicity.

Yep, JV project with US company to convert coal into chemicals and liquid gas has been realized with 2 billion USD project with PT Bukit Asam, our state owned coal miner company.

For chemical the same US company will cooperate and make JV with Bakrie Group that produce the most coal in Indonesia with their subsidiary companies, PT Kaltim Prima Coal and PT Arutmin, operating in Kalimantan.
 
US company but look like under Iranian American ownership as CEO is Iranian ethicity.

Yep, JV project with US company to convert coal into chemicals and liquid gas has been realized with 2 billion USD project with PT Bukit Asam, our state owned coal miner company.

For chemical the same US company will cooperate and make JV with Bakrie Group that produce the most coal in Indonesia with their subsidiary companies, PT Kaltim Prima Coal and PT Arutmin, operating in Kalimantan.
hope it will bring positive feedback and possible further investments into that kind of project, it might be sustainable alternative for pure coal consumption.
 
how it goes with multibillion project of converting coal into the gas and chemicals with some usa company?

Jokowi kicks of coal gasification project in S. Sumatra​

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Dzulfiqar Fathur Rahman (The Jakarta Post)
PREMIUM Jakarta ● Tue, January 25, 2022


President Joko “Jokowi” Widodo launched on Monday the construction of Indonesia's maiden coal gasification plant that is part of the government's coal downstreaming plans.

American industrial gas company Air Products and Chemicals is partnering with state-owned oil and gas giant PT Pertamina and coal miner PT Bukit Asam to develop the US$2.3 billion project in the Tanjung Enim Industrial Park in South Sumatra.

The project, which turns coal into dimethyl ether (DME), is expected to take 30 months to complete. The DME will mainly be used to substitute liquified petroleum gas (LPG) as cooking fuel.

Jokowi said the project was part of the government’s efforts to phase out LPG imports, which accounted for 80.5 percent of last year’s consumption at around 7.95 million tons.

“Once it starts producing, this project alone can reduce the subsidy from the [state budget] by around Rp 7 trillion (US$488.72 million),” Jokowi said in a press briefing on Monday.

“If we stop all LPG [imports] and replace it with DME, it is a really huge amount of money. We can reduce between Rp 60 trillion and Rp 70 trillion in subsidies from the state budget.”

LPG imports cost around Rp 77.8 trillion in 2021, according to the government. Between January and November 2021, the government spent Rp 53.7 trillion on subsidies for 3-kilogram LPG canisters, Finance Ministry data show. The subsidy spending was up 50.52 percent from a year earlier.

 
hope it will bring positive feedback and possible further investments into that kind of project, it might be sustainable alternative for pure coal consumption.

Amin ya Rabbal Alamin.

For chemicals

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April 27, 2022
2:41 PM GMT+7
Last Updated 5 months ago

Indonesian Bumi Resources, U.S. Air Products to start $2 bln methanol JV in May​


JAKARTA, April 27 (Reuters) - A unit of Indonesia's biggest coal miner PT Bumi Resources (BUMI.JK) and U.S. firm Air Products and Chemicals Inc (APD.N) will jointly invest in a methanol facility, an Indonesian minister and Bumi executive said on Wednesday.

Bumi's Kaltim Prima Coal will build the facility in Bengalon, East Kalimantan, with an annual capacity to produce 1.8 million tonnes of methanol, director Dileep Srivastava told Reuters.

He added the joint venture company will invest "around $2 billion all in".

Indonesia's investment minister, Bahlil Lahadalia, said the two companies aim to break ground in May, while Srivastava said the facility is expected to come online by 2025 or 2026.

Air Products did not immediately respond to requests for comment.

In 2020, the company announced it had signed a definitive agreement with Bumi's parent Bakrie Group and PT Ithaca Resources for a $2 billon "world-scale coal-to-methanol production facility".

Bumi said in 2020 it was looking into investing $1 billion in a coal gasification project, to comply with the Indonesian government's ambition of processing its natural resources domestically

 
The raise of economic prosperity is some how inline with the raise of conservatism of the Muslim population. This Canadian tourist said 95 % of Jakarta female wear hijab, and no we dont force our women to wear Hijab, as Quran stated : "There should not be any compulsion in religion"


That is somehow questionable at best. How do you correlate conservatism and economic prosperity? The first economic boom era of Indonesia happened when conservatists were repressed, do we want to attribute the economic success at that time to the population being less conservatists?

Indonesian economic success is largely thanks to the prudent fiscal policy enacted by post Asian financial crisis finance ministers. Meanwhile, the rise in conservatism among Muslims in Indonesia happened because the freedom of religious expression is guaranteed, especially after the 1998. Both happens at the same time, but that does not always mean they are correlated.
 
That is somehow questionable at best. How do you correlate conservatism and economic prosperity? The first economic boom era of Indonesia happened when conservatists were repressed, do we want to attribute the economic success at that time to the population being less conservatists?

Indonesian economic success is largely thanks to the prudent fiscal policy enacted by post Asian financial crisis finance ministers. Meanwhile, the rise in conservatism among Muslims in Indonesia happened because the freedom of religious expression is guaranteed, especially after the 1998. Both happens at the same time, but that does not always mean they are correlated.

Do you want to compare it with Soeharto regime that is able to tame inflation from 1000 percent coming from Soekarno regime ?

During Soeharto regime, Indonesia is indeed progressing in term of its Islamic belief. In 1955, Communist Party gets fourth position in our first fair election. That is huge number and possibly the number of Communist followers are increasing after USSR and CCP rule Russia and China and become the great powers during 1955-1966, not mentioning Soekarno has some soft heart on Communist while he puts many Islamist policians in jail.

LOL even Buya Hamka, Charismatic Ulama of Indonesia was jailed as well under Soekarno regime. You know what, from my father story who has connection with Indonesian military, there is order to torture Buya Hamka inside the jail, but the Army personnel who is ordered to do such thing dont follow the order.

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The big contribution Soeharto did to Indonesia and Islam is that he helped destroy Communist power in Indonesia.

Indonesia under Soeharto regime is supporting Islam as well as many of mosques he builds in many places across Indonesia. I believe you are also familiar with mosque funded by Government during that time. Javanese Islam in the old time was still not abide with Islam belief, particularly in the villages, and the mosque built there help the Islamization of Muslim Javanese. I have friend who understand about this as he was raised in Java village.

Soeharto build Golkar party and what is inside the party is right wing Armed Force and HMI (Islamic Student Coalition Alumni). You should be able to differentiate between Conservative Islam and Radical Islam. Abu Bakar Baasyir for instant that run away from Indonesia under Soeharto regime is radical Islam.


I would say Indonesia is more Islamic during Soeharto regime than during Soekarno regime and Indonesia under Reformasi period is more Islamic than during Soeharto regime.
 
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Do you want to compare it with Soeharto regime that is able to tame inflation from 1000 percent coming from Soekarno regime ?

During Soeharto regime, Indonesia is indeed progressing in term of its Islamic belief. In 1955, Communist Party gets fourth position in our first fair election. That is huge number and possibly the number of Communist followers are increasing after USSR and CCP rule Russia and China and become the great powers during 1955-1966, not mentioning Soekarno has some soft heart on Communist while he puts many Islamist policians in jail.

LOL even Buya Hamka, Charismatic Ulama of Indonesia was jailed as well under Soekarno regime. You know what, from my father story who has connection with Indonesian military, there is order to torture Buya Hamka inside the jail, but the Army personnel who is ordered to do such thing dont follow the order.

---------------------------------------------

The big contribution Soeharto did to Indonesia and Islam is that he helped destroy Communist power in Indonesia.

Indonesia under Soeharto regime is supporting Islam as well as many of mosques he builds in many places across Indonesia. I believe you are also familiar with mosque funded by Government during that time. Javanese Islam in the old time was still not abide with Islam belief, particularly in the villages, and the mosque built there help the Islamization of Muslim Javanese. I have friend who understand about this as he was raised in Java village.

Soeharto build Golkar party and what is inside the party is right wing Armed Force and HMI (Islamic Student Coalition Alumni). You should be able to differentiate between Conservative Islam and Radical Islam. Abu Bakar Baasyir for instant that run away from Indonesia under Soeharto regime is radical Islam.


I would say Indonesia is more Islamic during Soeharto regime than during Soekarno regime and Indonesia under Reformasi period is more Islamic than during Soeharto regime.

How do you measure more islamic? What is your definition of islamic? Because I get the feeling that you freely patched different stuff that might be or might not be related and call it a day.

And again I see the same pattern in your way of trying to attribute economic growth to conservatism in Indonesia. Before 1965, there were three main powers, the nationalists, the communists, and the islamists. The nationalists and the islamists mainly get along very well since the nationalist movement were born out of muslim organsations like the Syarekat Islam. But the communists could not get along with the other two since communists do not believe in Nationalism and they also seek to destroy religions. These created tensions within Indonesia. Soekarno tried to play a balancing game through his Nasakom ideals but of course such appeasement strategy failed. The destruction of communism in 1965-66 finally brought political stability into Indonesia which then allowed for the economy to grow. At the same time, the islamists no longer had other powers that opposed them in the grassroots level which allowed them to gain grounds as well. Islamism grew during Soeharto era and at the same time, the economy grew as well. They happened at the same time, but that does not mean the economic grow because the population became more conservatist.
 

Indonesia is the best-performing Asia-Pacific market so far this year​

PUBLISHED MON, OCT 3 202211:15 PM EDT
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Abigail Ng@ABIGAILNGWY

KEY POINTS
  • The Jakarta Composite index saw sharp falls in May and July before playing catch-up, and has stayed above the 7,000 level since early August.
  • Foreign investment into stocks has driven the index higher, and Indonesia is benefiting from higher commodity prices, according to Maynard Arif, head of Indonesia equities at DBS Group Research. The Southeast Asian country is a commodity exporter.
  • However, falling commodity prices are a source of uncertainty for the country, said Manishi Raychaudhuri, BNP Paribas’ head of Asia-Pacific equity research.
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Morning rush hour in Jakarta. Indonesia’s Jakarta Composite index faced a couple of bumps in the road in 2022, but as of Friday’s close, it was the best performing major Asia-Pacific index for the year.
Bay Ismoyo | AFP| Getty Images

Indonesia’s Jakarta Composite index may have faced a couple of bumps in the road in 2022, but as of Monday’s close, it was the best-performing major Asia-Pacific index for the year.

The index is up 6.51% since the start of the year.

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In contrast, the Hang Seng index in Hong Kong, South Korea’s Kospi, and Taiwan’s Taiex have plunged more than 25% this year.

Mainland China’s Shanghai Composite and Shenzhen Component have also been hammered, slumping by nearly 17% and 27% respectively.

The Nikkei 225 in Japan, India’s Nifty 50 and the SET index in Thailand fared better — notching single digit losses.

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Singapore’s Straits Times index was the second-best performer in the region, falling just 0.53%.

Indonesia’s advantage​

The Jakarta Composite index fell sharply in May and July before playing catch-up, and has stayed above the 7,000 level since early August.

Foreign investment into stocks has driven the index higher, and Indonesia is benefiting from higher commodity prices, according to Maynard Arif, head of Indonesia equities at DBS Group Research. The Southeast Asian country is a commodity exporter.

Economic recovery there has been on the uptrend after Covid restrictions were lifted, though developed economies experienced this boost earlier on, he added.
“2022 earnings growth on [the] Indonesia market remain robust, even after a big recovery in 2021 from a low base,” Maynard told CNBC in an email.
The valuation may look expensive [compared with] other countries but it can be justified given Indonesia’s outlook and growth.
Maynard Arif
HEAD OF INDONESIA EQUITIES, DBS GROUP RESEARCH
He added that DBS remains optimistic on Indonesia, though it faces headwinds from interest rate hikes from the U.S. Federal Reserve and a strong dollar — which have led to outflows for government bonds this year.

“The valuation may look expensive [compared with] other countries but it can be justified given Indonesia’s outlook and growth,” he said.

However, falling commodity prices are a source of uncertainty for Indonesia, said Manishi Raychaudhuri, BNP Paribas’ head of Asia-Pacific equity research.

“Given the decline in energy prices … we advise caution and a nimble-footed approach to the energy sector in particular, and to Indonesia in general,” he wrote in a report dated Sept. 28.

Elsewhere in Southeast Asia, Singapore has a “large representation” of companies — such as banks — that benefit from rising yields, said Raychaudhuri, adding that the country and India, Indonesia and Malaysia are “pockets of safety.”
Suresh Tantia, a senior investment strategist at Credit Suisse, said tourist inflows are supporting the economy and the market after it reopened.

South Asia vs. North Asia​

Tantia also said Credit Suisse prefers South Asia to North Asia markets for now, given the export-reliant nature of markets such as South Korea, Taiwan and China.

“South Korea and Taiwan, definitely we could see some more pressure, export growth slowdown, currencies remain weak and we are seeing weakening demand for chip sector also, which is very important for these two markets,” he told CNBC.

 

Why Indonesia matters​

Indonesia is back on the map. In the next decade it will only become more important​

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Nov 17th 2022

This week’s g20 meeting took place in Indonesia, the most important country that people routinely overlook. The last time its economy and politics were in the global spotlight was during the mayhem of the 1990s when a crony-capitalist system collapsed amid the Asian financial crisis, causing the fall of the 32-year-long dictatorship of Suharto.

A quarter of a century on, Indonesia matters once again. It is the world’s largest Muslim-majority state, its third-biggest democracy and its fourth-most-populous country. With 276m people spread across thousands of islands that stretch from the Indian Ocean to the Pacific, it is caught up in the strategic contest between America and China. And like India and other emerging markets, it is adapting to a new world order in which globalisation and Western supremacy are in retreat.

 

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