Indonesian economy one to watch

Last updated 09:59 13/09/2012
Jakarta

URBAN SPRAWL: Jakarta’s central business district sprawls far off into the horizon. Home to almost 9 illion inhabitants, Jakarta is also Indonesia’s capital.

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OPINION: This week we welcome back to our stable of columnists Sam Mackay. His weekly Beijing 101 column, which detailed his experiences studying language in the Chinese capital, was popular with readers. It ended when he returned to Southland to take on the role of Southern Institute of Technology's international manager. His new occasional column will explore his personal perspective of the countries he visits as part of that role.

My last few minutes on Earth were looking pretty grim.

Not that that's altogether surprising; they were the last few minutes of my life, after all.

But emailing about monthly financial reports is hardly the prelude to the light at the end of the tunnel moment one really desires (all you accountants excepted).

I hadn't pictured meeting St Peter at the pearly gates with such an uninspiring story to tell.

"How did you spend your last moments on Earth, Sam?"

“Emailing about monthly financial report variances, Sir Peter,” I would squeak.

The squeaking would be for good reason: the lower half of my body was on track (pun intended) to becoming severed from my upper half.

It was hardly the most transcendent way to start the next life, but at least I was in Indonesia, so it had the makings of a slightly exotic death.

As it turned out, the taxi managed to make it over the tracks just in time for a locomotive far scarier than Thomas to whistle by mere centimetres behind (I swear my forward leaning helped).

The point of this story is not so much to emphasise how much I put on the line when I go abroad to promote SIT (though feel free to take note, Penny), but rather to highlight a rather unmissable feature of Indonesia: its diabolical traffic.

It's so bad it's infamous.

Jakarta's roads are estimated to be 20 per cent over capacity, a situation set to worsen with more than 700,000 new vehicles being purchased in Indonesia each year.

Matters are so dire that Jakarta bottomed out in a global survey of commuter satisfaction.

Traffic moves at an average of 20 kilometres an hour and officials predict that the city may be in total gridlock by 2014.

The impact on productivity is already steep.

While I was able to blissfully email about financial variances from the taxi's back seat, it still took two hours to travel just 30 kilometres (two hours!).

As The Economist has stated: “Indonesia's traffic jams make molasses look runny.”

The story that the sad state of Jakarta's roads reveals is the rise of Indonesia itself.

As the world's fourth most populous nation, third largest democracy and with the world's largest Muslim population, Indonesia is increasing in geopolitical importance.

A population surge, rising income levels and burgeoning middle class are further positioning Indonesia as an economy to watch.

It's a development that the New Zealand Government has picked up with a newly articulated strategic focus on Indonesia. It's clear we need it: while more than 20,000 Indonesian students choose to study in Australia every year, New Zealand attracts only 600.

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And while there is ample opportunity for institutions like SIT - there are more than 2000 universities in Indonesia alone - it is also a complex market to engage with and gain traction in.

Despite this difficulty, the signs are all pointing in the same direction.

By 2050, if not earlier, Indonesia is projected to become the world's fourth largest economy.

That's on top of it now being one of the world's fastest-growing economies, with a growing middle class providing a range of opportunities for New Zealand businesses.

But to take advantage, we - unlike Jakarta's traffic - need to move quickly. Other countries are already making their mark.

Japan, for instance, is helping the Indonesian Government fund a US$140 billion (NZ$172b) boost for transport infrastructure.

Which, given the scale of the problem, may only mean I get almost killed by a flasher train the next time I visit.

Now if only something far worse could happen to those variance reports.

- © Fairfax NZ News

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