Mike King, Special Correspondent | Feb 02, 2012 10:33AM EST
Indonesian exports in 2011 rose 29 percent year-over-year to $204 billion, as Southeast Asia’s largest economy taps manufacturers' shift of production away from disaster-affected Thailand and Japan.
The value of Indonesian exports has doubled over the last five years, and foreign direct investment in the country expanded 20 percent year-over-year in 2011. The country’s gross domestic product is expected to expand by more than 6 percent this year, compared to the global growth rate of 2.5 percent predicted by the World Bank.
Indonesia’s success has been built on its strong domestic market and abundant raw materials, which have provided relative shelter from the economic problems that have beset many Western economies.
“Recent disasters such as the quake and tsunami in Japan followed closely by the floods in Thailand have helped to convince some global giants like Toyota to build new production facilities in Indonesia, both for finished product as well as component manufacturing,” said Aaron Randolph Chen, Indonesia managing director of BDP International, a forwarding logistics company.
He said the country’s durability in the 2008-09 crisis elevated it to the same status as the BRIC — Brazil, Russia, India and China — group of countries in the eyes of many investors.
One recent PWC report said Indonesia could become the world’s eighth largest economy by 2050, and Moody’s Investors Service in January raised Indonesia’s credit rating to investment grade for the first time in more than a decade.
However, Indonesia has not escaped economic turmoil in Europe entirely. Export shipments grew by only 2.2 percent year-over-year in December and contracted from the previous month.
Trade Minister Gita Wirjawan said that even though much of Indonesia’s exports first go to other parts of Asia ‚ a byproduct of the country’s shortage of port capacity, which limits direct calls by containers lines — many shipments still ended up in the West.
“Some people have said Indonesia does not need a strong Europe because Indonesia relies less on Europe than on other parts of the world,” he said. “That’s not true.”
With the majority of the country's exports headed to Europe and the U.S., which have seen slackened consumer demand, he expects export growth to slow this year to about $205 billion.
“If we can keep exports the same as last year, it would be good enough,” he said.
-- Contact Mike King at michael@borderline.eu.com
