Don't overlook our neighbour

Indonesia is already in the top league of economies

ALMOST overnight, Myanmar has literally become the darling of Asean. While there are positive signs that Myanmar will continue to be a key attraction in the regional grouping, no one should ignore Indonesia, too.

In fact, Indonesia cannot be ignored even if one tries. In more ways than one, it has outstripped not only Myanmar but almost every other country in Asean. This is achieved not necessarily by virtue of its size, but the speed with which it has gradually adapted to its own self-importance.

If Jakarta hasn't done more to showcase its prowess, it is largely due to Indonesia's erstwhile humility.

First of all, Indonesia is already in a league of its own. Although rhetorically it is still bound to Asean, the internal/external economic dynamics are proving otherwise.

With the strengthening of the  rupiah against the US dollar, Indonesia's gross domestic product (GDP) will translate to a level of over US$1 trillion (RM3.04 trillion) this year.

This means the Indonesian economy will join the league of US$1 trillion economies that comprises countries like Australia, South Korea, Mexico and India.

By this token, Indonesia will also position itself closer to China and Japan, two countries that have hit the trillion-dollar mark. Indeed, China became a US$1 trillion economy as recently as 2008.

Secondly, while Indonesia is a member of the Group of 20, with which Asean also has a seat, all of the Group of Eight (G8)  and BRIC (Brazil, Russia, India, China) countries are currently US$1 trillion economies.

Indonesia has everything to gain by paying  close attention to these trillion-dollar giants. To the degree Indonesia needs to show the world it is still aligned to Asean, its ministers will just show up at the relevant summits and events. But its mind will be elsewhere, even if its heart is with Asean.

Since currency valuations can be subject to rapid change, a country could achieve the US$1 trillion nominal GDP mark one year and then produce less than that in total goods and services the following year(s).

But, once Indonesia hits the US$1 trillion mark sometime this year, it will fight to retain it; as South Korea and Australia did.

By so doing, Jakarta would seek to be closer to G8, BRIC, South Korea, Australia and Mexico, rather than Asean necessarily. Power attracts power; wealth attracts wealth.

Thirdly, for this very simple reason, the domestic politics of Indonesia have already acquired this mercantilist ethos pregnant with all strategic implications.

Aburizal Bakrie of Golkar party, concurrently one of the richest men in Indonesia, has begun positioning for the presidency, even though the next presidential election will not happen until 2014.

Other candidates, like former vice-president Jusuf Kalla and Prabowo Subianto, the ex-son-in-law of former president Suharto, have followed suit. Both are multimillionaires in their own right, seeking to lay their hands on Indonesia's trillion-dollar economy.

Invariably, while Indonesia may pay lip service to Asean, it has the stellar attributes to operate on its own. Many studies have confirmed Indonesia's star quality.

In a recent study, "Global Growth Generators: Moving Beyond Emerging Markets", Citibank predicted that the Indonesian economy will become the fourth-largest economy by 2040, while in 2030, Indonesia will be seventh in global economic rankings.

In a separate report by the Asian Development Bank, Asian economies, namely China, India, Indonesia, Japan, South Korea, Malaysia and Thailand will account for 45 per cent of the global GDP by 2050. Meanwhile, the entire Asian region will account for 51 per cent of the global GDP in 2050. Indeed, the GDP figures will soar to US$148 trillion for the entire Asian region.

Even in the event that China, India, Indonesia and Vietnam are stuck in the middle-income trap, Asia will still make up 32 per cent of the entire world's GDP, of which Indonesia plays a major part.

Aburizal Bakrie of Golkar party has begun positioning for Indonesia’s presidential election

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