Indonesia: The Fastest Growing Major Economy In The World
Aug 8, 2023
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Indonesia's rapid economic growth and potential as a major player in global manufacturing. The challenges in managing resources, such as Jakarta sinking and corruption. The impact of oil facilities on employment and the economy. Challenges of becoming an advanced economy, including low English proficiency and geographical difficulties. Examination of Indonesia's economy, GDP ranking, stability, vulnerability to shocks, and projected growth.
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Quick takeaways
Indonesia's natural resource wealth and access to international trade routes position the country as a potential major global economic player.
Addressing challenges such as corruption, limited education levels, and regional disparities is essential for Indonesia to achieve advanced economy status and become a global economic powerhouse.
Deep dives
Indonesia's Potential as an Economic Powerhouse
Indonesia, with its vast population and abundant natural resources, has the potential to become a major global economic player. The country benefits from a growing workforce, easy access to international trade routes, and favorable positioning in the region's shift away from China as a manufacturing center. Additionally, Indonesia's oil and gas reserves, precious metals, and arable farmland provide further opportunities for economic growth. However, effective economic management is crucial, as natural resource wealth must be properly managed to benefit the population. Challenges such as demographic issues, geographic limitations, and political concerns also need to be addressed for Indonesia to reach its full potential.
Past Challenges and Economic Progress
Indonesia's economic development faced significant challenges in its history, including colonization, war, and political instability. However, after gaining independence, the country made strides in rebuilding its economy. The government, assisted by a group of influential economists known as the Berkeley Mafia, implemented policies that led to substantial economic growth, primarily driven by the exploitation of natural resources, particularly oil. While economic growth remained tied to resource prices, the government invested in infrastructure and diversified industries, laying the foundation for continued development. Despite progress, corruption and limited education levels pose ongoing obstacles that need to be addressed for Indonesia to become an advanced economy.
Future Challenges and the Path to Advancement
Despite recent economic growth, Indonesia still faces major challenges on its path to becoming a global economic powerhouse. The country's geography, consisting of thousands of islands, presents difficulties for infrastructure development and connectivity. Investments in education and technological advancements, such as reliable internet access, are necessary to foster economic competitiveness. Corruption and regional disparities further hinder progress. The decision to relocate the capital city from Jakarta to Newstantara on the island of Borneo aims to address overpopulation, pollution, and infrastructure strains. If Indonesia can effectively navigate these challenges and pursue sustainable economic development, it has the potential to secure a prominent position among the world's largest economies.
Indonesia's economy has been growing rapidly, and thanks to a younger population it could be on track to become one of the biggest economies in the world. There are a few things holding Indonesia back, such as Jakarta sinking into the ocean, but with their natural resource wealth and access to the world's oceans, it could become a huge player in making the goods we all use every day.