Indonesia: An Emerging Economy in Need of Readjustment

25-11-2013

Indonesia has experienced a sustained phase of strong economic growth. The scars caused by the 1997 financial crisis have healed, and the country has – at least so far – resisted the general economic slowdown that followed the 2008 crisis in many other international markets, including in South-East Asia. This country’s long-running growth is, however, threatened by a number of adverse economic factors, and a short-term economic slowdown cannot be excluded. Substantial reforms are required to ensure that Indonesia’s economic development is sustainable. Thanks in large part to its demographic might, Indonesia has become a full-fledged member of the G 20 Group. With more than 240 million inhabitants, the biggest country with a population of majority of Muslims in the world also plays a pivotal role within the Association of South-East Asia Nations ( ASEAN). Economic relations with the European Union (EU) are generally good. The EU and Indonesia signed a Partnership and Cooperation Agreement (PCA) in 2009. An ad-hoc EU-Indonesia ‘Vision Group’ produced a study in 2011 that called for the rapid initiation of talks on an enhanced Comprehensive Economic and Partnership Agreement, although negotiations have not officially been opened. On 30 September 2013, the EU and Indonesia signed a Voluntary Partnership Agreement to prevent the trade of illegally logged wood.

Indonesia has experienced a sustained phase of strong economic growth. The scars caused by the 1997 financial crisis have healed, and the country has – at least so far – resisted the general economic slowdown that followed the 2008 crisis in many other international markets, including in South-East Asia. This country’s long-running growth is, however, threatened by a number of adverse economic factors, and a short-term economic slowdown cannot be excluded. Substantial reforms are required to ensure that Indonesia’s economic development is sustainable. Thanks in large part to its demographic might, Indonesia has become a full-fledged member of the G 20 Group. With more than 240 million inhabitants, the biggest country with a population of majority of Muslims in the world also plays a pivotal role within the Association of South-East Asia Nations ( ASEAN). Economic relations with the European Union (EU) are generally good. The EU and Indonesia signed a Partnership and Cooperation Agreement (PCA) in 2009. An ad-hoc EU-Indonesia ‘Vision Group’ produced a study in 2011 that called for the rapid initiation of talks on an enhanced Comprehensive Economic and Partnership Agreement, although negotiations have not officially been opened. On 30 September 2013, the EU and Indonesia signed a Voluntary Partnership Agreement to prevent the trade of illegally logged wood.