![]() ![]() Vietnam, though not democratic, has also stimulated growth through state direction and investment. It’s worth noting that the archipelago is not alone in practicing “enlightened intervention” in Southeast Asia. Since 2014, therefore, the Jokowi administration has picked a developmental path between classical economics and the attempts at socialism (democratic or otherwise) that have faltered from Bolivia to Ghana and even in Indonesia itself. By the end of 2021, his ministry’s assets under management (AuM) equated to approximately 53 percent of Indonesia’s GDP, while SOEs posted record dividends of $5.3 billion in 2023. SOEs are also key players in the export of Indonesia’s agricultural and mineral resource exports, either alone or in coordination with the private sector.Įrick Thohir, the current SOEs minister, is one of Jokowi’s closest political allies and was tapped for the job by the President in 2019 to take the project forward.Ī successful businessman in his own right and the former owner of Inter Milan, Erick’s private sector expertise has helped to both maintain growth and direct Indonesia’s SOEs to dealing with voter priorities such as inflation and employment. ![]() Jokowi has empowered state firms in the construction sector in particular to drive infrastructure development as the foundation stone of his agenda. The Jokowi administration, leaning in to enduring nationalist sentiment at home and in contravention of neoliberal norms, has significantly increased the role that Indonesia’s state-owned enterprises (SOEs) play in the economy. Under the leadership of President Joko ‘Jokowi’ Widodo since 2014, Indonesia’s economic policy has undergone a significant gear change and one that has finally woken the world up to its growing economic clout. The combination of a young population with an enormous domestic market has also enticed foreign investors to plough funds into Indonesia’s export and consumer goods industries.įoreign direct investment inflows rocketed from US$8.3 billion in 2005 to just under $25 billion on the eve of the pandemic.Īnd yet, despite the role of investment incentivization in Indonesia’s economic mix, attributing the country’s performance to the classic capitalist model would underplay the role of its government and population. Political stability has cultivated economic prosperity (and vice versa). Power has changed hands peacefully over the past two decades, while gross domestic product per capita has multiplied sixfold since 2000. Indonesians directly elected a president for the first time in 2004 but democratic reform has since ushered in a period of strong economic growth and political stability. The archipelago nation lurched from “guided democracy” after independence to an authoritarian but development-minded dictatorship in 1965. Indonesia, as the region’s largest democracy with over 270 million people, is perhaps the best example in this regard. ![]() Much of now booming Southeast Asia provides a template for other nations looking to break free of past horrors, including colonialism and deadly infighting, and continue their ascendancy to high-income status. However, these problems – coming from both within and without – are by no means an impossible fix. ![]()
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