: Super User; Economic; 04 November 2011; Hits: 1077

Jury's Out on the Business Climate

CONVENTIONAL wisdom says Indonesia is a difficult market for businesses to operate in. Apart from all the red tape and corruption, the country suffers from significant infrastructure deficiencies. But how serious are these problems? And for who?

: Super User; Economic; 26 August 2011; Hits: 1281

Economy at risk when budget is underspent

JUST how important will Indonesian government spending in the 2012 budget be in influencing the growth and general direction of the economy? Somewhat surprisingly, the answer is that no one really knows. What is almost certain, however, is that the official projection will be off target.

: Super User; Economic; 24 June 2011; Hits: 1042

Foreign banks gain currency

ONE striking aspect of a recent fraud case that targeted wealthy customers at American lender Citibank earlier this year is that it has not led to a backlash against foreign banks. This is despite protectionist sentiment being an important theme in Indonesia’s modern history.

: Super User; Economic; 01 April 2011; Hits: 1113

Manufacturing Boost Needed

WHAT has happened to Indonesia’s manufacturing sector? Manufacturing was the engine of growth in the 1980s and for much of the 1990s, thanks largely to a series of trade reforms following the end of the oil boom. Indeed, so fast was the growth that by 1991, the sector’s contribution to gross domestic product (GDP) exceeded that of agriculture.

: Super User; Economic; 28 January 2011; Hits: 1172

Will Garuda's IPO Fly or Falter?

HAS Garuda, Indonesia’s state-owned national airline, missed the boat? Last year, it seemed that nothing could go wrong for companies wishing to list on the stock market. Indonesia’s benchmark share index jumped 46 per cent, supported in part by US$2.2 billion (S$2.8 billion) in foreign portfolio inflows, more than double the level registered in 2009.

Key Political Risks

The inability of the government led by Prime Minister Yingluck Shinawatra to bridge the deep divisions between her populist government and its royalist opponents in the military and bureaucracy remains a major concern.

Prime Minister Yingluck has selected a competent economic team, but it is difficult for these technocrats to deliver on the new government's campaign promises without triggering inflation or hurting business.

The government has also been unable to resolve the ongoing insurgency involving ethnic Malay Muslim rebels in the south.

WATCH OUT FOR:

Attempts by the government to amend the constitution. The proposed rewrite is aimed removing legal measures initiated by the royalist generals who overthrew former Prime Minister Thaksin Shinawatra, the current prime minister's elder brother, in 2006.
Ballooning government debt as officials seek to finance government programmes aimed at subsidising rice prices in order to retain the support of farmers.
The relationship between Prime Minister Yingluck and senior generals. Coups have been a common means of regime change in Thai history, and any attempt by the government to purge royalist elements in the top brass could trigger yet another. Thailand