The end of the economic miracle
An economy that galloped along for years is now slowing due to the sharp drop in commodities, which it exports in vast numbers. Corruption and minority interests still need addressing.
- Monday, 30 November -0001
The path forward appeared to be set: Indonesia, South East Asia’s most populous country that is rich in resources and potential, was finally moving toward the sustained development that had eluded the nation for so long. The election of a ‘man of the people’, Joko Widodo, the first president not to come from the military elite, had given hope to many of the 250 million inhabitants of the archipelago. But less than a year and a half after his election, the Indonesian economy appears to be bogged down. Growth is at its lowest level since 2009, jobs are not being created and the economy has many serious imbalances. Widodo’s honeymoon is already over.
Between March and September of last year, GDP grew by 4.7%, a figure that would satisfy a developed economy but is not sufficient for a country with per capita GDP of just 3,500 dollars (€3,270). That’s compared to $10,500 (€9,812) in neighbouring Malaysia or $5,500 (€5,139) in Thailand. During the electoral campaign, Widodo promised growth of 7%. Economists have estimated that 6% growth would be required in order to create jobs in a country suffering from profound inequality where 40% of the population live on less than $2 (€1.9) a day.