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Indonesia

Indonesia has had a difficult time ever since the Asian crisis of 1997/8. The country remains the subject of travel warnings and ‘security concerns’. But while there is a need to remain vigilant, the shared experience of those on the ground in Jakarta is that people generally feel less threatened than in many western cities; life feels normal for those living and working there.

Economically, Indonesia’s performance is already improving following significant progress by the Megawati administration since it took over from the impeached Abdurrahman Wahid in July 2001. During the administration’s first 18 months, Indonesia’s economic reform programme has been rejuvenated, and the country’s relationship with the IMF restored following deterioration under the previous presidency. Consumer confidence and exports are back on a rising trend; by the third quarter of 2002, exports were 22% up on figures for the last quarter of 2001. Inflation has also been brought under control, down from a 15.1% high in February 2002 to 7.12% in October.

A huge market
Through the years of crisis, a vibrant business community has still continued to thrive on the diverse opportunities offered by Indonesia’s large market of 220m people. Shipping is a vital sector for the world’s biggest island nation, with further growth potential in energy sectors particularly – oil, coal and LNG – but also in expanding underdeveloped port infrastructure, and opportunities in recreational and industrial shipbuilding and sales, ship repairs, and freight and passenger transport services.

Miss Megawati’s formidable set of problems have also included the controversial increase in ‘regional autonomy’, involving a massive shift of power away from the centre to the regions, stemming previous regional disquiet, although problems resurfaced in April 2003. The President has also found herself dealing with an extremist Muslim minority following America's invasion of Afghanistan; the Bali bombing in October 2002, which shook Indonesia, prompted the government to clamp down on suspected terrorists.

When current problems are resolved, however, the enormous capacity and ability Indonesia will have to rebound should not be underestimated.

Geoecon stats: BPS Indonesia; The Economist.
2002 figures unless stated. *=Economist 2002e
Port stats: ISL Port Data Base. 2000 figures.*=latest, 1997.