Investment Grade Indonesia?
There’s something different about Indonesia today than there was, say, 3 years ago. Among businesspeople, I sense a new optimism about Indonesia’s growth prospects. A decade of 6-7% growth will do that for you, I guess. As will the lifting of Indonesia’s sovereign credit rating out of the “junk bond” category.
Sure there are complaints about infrastructure, transport, and legal reforms, but the big players seem to know “how the game works” now, at least enough to make some money.
The question is whether or not this sense of optimism, excitement, and promise about Indonesia’s future is shared by Indonesia’s 99%. Here I’m not so sure. Public opinion about the current administration is down, and the very biased sample of non-elite Indonesians I’ve talked to don’t seem particularly optimistic that steady 6% growth means a steady increase in their material prosperity. Complaints about decentralization and the lack of a perspektif jangka panjang at the center are rife. The “I miss Soeharto” syndrome is alive and well.
Where does that leave us? Hard to say. Indonesians over the past 20 years (well, more like 45 years) have proven that they have an almost unlimited ability to absorb the inattention and the malfeasance of their country’s political and economic elites. But I stress almost unlimited (see 1965, 1998). This leaves me cautiously optimistic about Indonesia’s national economic performance, but only guarded about the prospects for continued stability under the current political architecture.