Indonesia's Equivocating Economy

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Earlier this month Indonesia government data showed the country’s GDP grew at an annualized rate of 5.2 per cent during the three months to June 30. It’s a rate of growth that would be the envy of most big economies not least because it has so far avoided triggering rapid price inflation while paralleling an overall improvement in government services.

The state of the economy has helped support a generally sunny outlook among Indonesia’s voters and their favorable views of their outgoing  president, Joko Widodo, who is enjoying stratospheric approval ratings as a result. Widodo’s support is so robust that a nod from him to one of the three likely contenders vying to replace him may go a long way toward securing the top job. But it’s a not an episode of Reformasi Dispatch without a healthy dose of skepticism and this case is no different. Investment ought to be playing a much bigger role in driving Indonesia's growth.  And while 5.2% is nice, GDP really should be growing at something closer to 7 per cent -- unseen in post Suharto-era Indonesia -- to soak up surplus labour and boost wages.

Joining Jeff and Kevin is Angus Mackintosh, founder of CrossASEAN Research and Insight Provider on Smartkarma. We recorded our interview on Wednesday Aug 16th. Flight cancellations and the Independence Day holidays wreaked havoc with our production schedule last week. We’ll be back with a full episode on Friday August 25th.

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