Friday, September 11, 2009

FYI – Latest assessment on Indonesia

From The Economist Special Report on Indonesia

Countries generally hit the headlines only when the news is bad. In Indonesia it has often been spectacularly bad. A decade ago there were fears that the country might disintegrate in a welter of violence, piracy and mass migration. Its former dictator, Suharto, set new standards for kleptocracy. As he fell in 1998, the economy collapsed. The Bali bombing of 2002 that killed more than 200 people was one of a series of such attacks, and the lingering danger of Islamic terrorism was recalled by another murderous blast in Jakarta in July this year. The country is prone to natural disasters too, from the tsunami that devastated parts of Sumatra in 2004 to this month’s deadly earthquake in Java.

So Indonesia has an image problem. Foreigners may not realise, its boosters defensively suggest, that the world’s third-largest democracy and fourth most populous country, with more Muslims than any other, is actually doing rather well. It enjoys political stability under a popular incumbent president, Susilo Bambang Yudhoyono. The bombing in Jakarta was the first such atrocity for nearly four years. Economic growth has slowed, but the country has withstood the global slump well. Of big countries, only China and India are growing faster.

It still has enormous problems. Separatist tensions have eased, but it remains prone to sectarian and ethnic violence. Mr Yudhoyono has not met his promise in 2004 of halving the number of people living below the government’s poverty line. More than 15% of Indonesia’s 240m people are poor. Unemployment is high, at about 8%, and the workforce is growing faster than in any other country apart from India and China. Inequality has actually widened a little. Those who looted the country under Suharto, and the soldiers who connived at terrible abuses, have enjoyed almost total impunity. Indonesia is still one of the world’s most corrupt countries. Its infrastructure is in woeful shape. And as another El Niño weather pattern takes hold, choking smog caused by forest fires is already smothering parts of Sumatra, drawing attention to Indonesia’s role as the world’s third-largest emitter of carbon.

There are, however, four big reasons for optimism…(for full story please access link to The Economist Special Report on Indonesia above).