2010-07-21

Indonesia opening to foreigners

Why Gita Wirjawan Wants to Open Indonesia to International Investors
Gita Wirjawan: What we have to do is project positive realities about Indonesia, or in other words, pitch positivity with realism. Not many people in the right places know about us. The most fundamental area that we have to work on is to elevate the level of awareness -- and we are doing that. We are reaching out to different parts of the world -- to the United States, to Europe, to many parts of Asia-Pacific -- to let everybody know that Indonesia is a $650 billion economy this year, and that it has 240 million people, making it the third-largest democracy, and that it is the largest Muslim country, and a modern one. That, I think, is being remedied as we go.

Beyond that, we would like to educate the international community with respect to some of the other positives about Indonesia. For instance, not many people know about our fantastic demographic dividend -- 60% of the population is 39 years old or younger and 50% is 29 or younger. Compare those numbers with the situation in countries like Japan and China. We not only have a competitive economic environment but we also are able to show political stability. If you had talked to me about Indonesia 11 or 12 years ago, it would have been tough for me to project Indonesia in a positive way -- in a realistic manner. Now we've got those two elements -- macroeconomic stability and macro-political stability.

From an economic standpoint, we've been able to show fiscal sustainability. We've been able to show monetary stability for the last five or six years. There is no apparent inflationary pressure coming, as we had seen a few years ago. Our ability to balance our budget has been recognized by the international community -- particularly the ratings agencies. Our ability to trim down our debt to a mere 28% debt-to-GDP ratio is commendable, especially if you put that number in the context of what some of the other economies in the world are going through today. That's the macroeconomic stability story we need to tell.

As for political stability, we have gone through a rather difficult democratization earlier on, but we've been able to show to the rest of the world that we have democratized in a good way. And there's no apparent centrifugal force now that could rip the country apart like many people thought would happen 11 or 12 years ago. So you can tick off those boxes on politics and the economy.

Beyond that, one needs to take into account Indonesia's ability to remedy its mistakes. Indonesia needs to stop being known as a country of tsunamis, earthquakes, floods and all the negatives that have been portrayed in many international media.

The world needs to understand Indonesia in a different way -- it has been more misunderstood than it deserved. And that's what we're trying to remedy by sitting down with think tank organizations and people within academia and within executive decision-making bodies.


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