Indonesia Occupies Wall Street With Its Heft of Resources, Democracy

Jakarta Globe, Shoeb K. Zainuddin, September 25, 2012

Indonesian President Susilo Bambang Yudhoyono visited Wall Street, in
 downtown Manhattan, to drum up investor interest in Indonesia, during his
visit to New York on Monday. (AFP Photo/Timothy A. Clary)

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New York. For about three hours on Monday morning Indonesia occupied Wall Street as President Bambang Susilo Yudhoyono addressed several American captains of industry and financial titans.

For the first time in its history, the New York Stock Exchange hosted an Indonesian Investment Day, a reflection of growing global interest in the country and Indonesia’s rise as a major global economy.

As pointed out by the chief executive of NYSE Euronext, Duncan Niederauer, in the past seven years, Indonesia’s gross domestic product has grown by 200 percent, its blue-chip stocks have risen by 200 percent and its overall stock market has shot up by 300 percent.

In his speech, Yudhoyono sought to differentiate Indonesia from the rest of the emerging economic pack.

“Here on Wall Street and around the world, there is a lot of talk about emerging markets,” he said. “Indonesia is included in almost every acronym to describe these markets, but among emerging powers, Indonesia is unique.”

Yudhoyono added that Indonesia is constantly adapting itself to global economic and social trends and the government is very conscious of not falling into the resource trap.

The government, he added will not be irresponsible with the nation’s wealth in natural resources.

“We are mindful that natural resources can also be a curse. In fact, we will add value. By 2014, all raw materials will be processed domestically before being exported, as this will not just boost growth but social equity,” he noted.

“Indonesia is doing well, but for how long is the common question. I believe it can be sustained because we have built the foundations and our political stability anchors our economic strength,” he added.

Indeed, few economies in the world offer opportunities for growth and profits that Indonesia does, said Nouriel Roubini, chairman of Roubini Global Economics. He said that the rise of emerging markets would totally transform the global economy over the next few decades, as consumption rises and demand for natural resources increases.

“Who will produce these natural resources? There are a lot of opportunities in Indonesia, which has an abundance of these resources,” he said.

Roubini added that there has been too much hype given to the BRIC countries (Brazil, Russia, India and China) over the past few years, but in many aspects Indonesia fairs much better than they do. “Indonesia has a more robust democracy and a much more diversified economy than Russia or China.”

“One of the strong points of the Indonesian economy is that while its exports are strong, domestic demand makes up two thirds of the economy,” he added. “This is what makes it very resilient.”

The country will, however, need to continue to invest in infrastructure and manage its widening current-account deficit.