http://www.emergingmarkets.org/
Jim O’Neill is Visiting Research Fellow to BRUEGEL and Economic Advisor to the International Finance Corporation
Indonesians probably have the most justifiable gripe of any nation, along with Mexico, not to be included in the Bric group that I dreamt up in 2001.
Indonesia has a larger population than two of the four Bric nations, Brazil and Russia, and of course, it has a remarkably youthful population also, with demographic dynamics that give its growth potential a lot of hope in the next couple of decades.
These basic attractions are partly what led me to thinking of the notion of an additional group of emerging economies to focus on: the so-called Mint countries; Mexico, Indonesia, Nigeria and Turkey. Each of these has the potential to be a significant part of the world economy if not quite as important as the Bric economies. I define a Bric in a global context these days, as an emerging economy that if not already 3% of global GDP or more, one that has that clear potential in the next decade or two. For the Mint economies, I think of them as emerging economies that either are, or have the potential to be somewhere between 1%–2% of global GDP.
At somewhere below $1tr in nominal GDP Indonesia is currently around 1.5% of global GDP, and it does have the potential if it used its young people productively to rise notably, and of the Mint countries, perhaps the best chance of becoming as large in the future as one of the Bric countries, although it will be difficult to achieve that. India and Russia are currently twice the size of Indonesia, Brazil 2.5 times and of course, China more than nine times bigger.
Writing at the end of the first quarter of 2014, and more than four months since I finished travelling around each of the Mint countries, I find it quite interesting to reflect back. Looking at financial markets, Indonesia has been one of the star performers of 2014 to date, with the stock market up by around 13% in the first quarter and the rupiah having risen against the dollar, which makes a mockery of the notion that emerging markets were out of fashion. Indonesia has been one of the absolute best places to have been invested in Q1. I would not have guessed this four to five months ago to be frank as travelling through Jakarta didn’t give me as much “wow” factor as I came across from my travels elsewhere.
For the rest of this column, click here: http://www.emergingmarkets.org/Article/3337168/JIM-ONEILL-Indonesia-needs-to-tackle-infrastructure-hurdles-to-build-on-its-youthful-potential.html