Gw copy sekalian deh :p
Indonesia On The Move
Carl Delfeld, 12.25.08, 05:00 PM EST
Forbes Magazine dated January 12, 2009
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Given sound management in recent years, Indonesia entered the current turmoil in a strong position.
It was a terrible year for emerging markets in 2008. To put things into perspective, the outflows from emerging markets exceeded US$50 billion (RM175 billion) as the year wound down, compared with total inflows of US$95 billion from 2003-07, according to Emerging Portfolio Fund Research.
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These markets have paid a heavy price as foreign investors liquidate positions, especially in markets considered more risky than home markets.
But consider Indonesia — below the radar screen of most global investors despite a sterling performance in 2006 and 2007. With real GDP of US$840 billion and a population of 240 million, Indonesia quietly accounts for two-fifths of ASEAN's population and one-third of its GDP.
The nation’s debt-to-GDP ratio has been declining, its foreign exchange reserves are at a robust US$48 billion, and its stock market was one of the three best performers in the world in 2006 and 2007. (2008, however, was brutal, as the fortunes on our recent list of Indonesia’s 40 Richest took a beating.)
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Finance Minister Sri Mulyani Indrawati is seen as the face of the new Indonesia, a reformer who has tried to bring transparency to the financial sector and rid the country of graft and waste, no small order after decades of corruption.
The government passed a new investment law in March 2007 and has initiated tax and customs reforms, introduced Treasury bills and improved capital market supervision. Randy Salim, spokesman for the World Bank in Jakarta, states that “given sound macroeconomic management in recent years, Indonesia entered the current phase of market turmoil in a strong position.”
One sign of strength: Conglomerate Lippo Group recently announced that it was going to invest US$500 million in distressed real estate in Europe and the US.
The key perception of Indonesia is that it is heavily dependent on commodity prices. But the Indonesian economy seems to be holding up rather well, despite the commodity meltdown, with GDP up by 6.1 per cent in the year through the third quarter. What about next year?
Finance Minister Mulyani recently predicted that economic growth could cool to about five per cent (even that number may be optimistic).
As a significant exporter of commodities, it will be squeezed by falling prices, but keep in mind that Indonesia’s total exports are equivalent to only 30 per cent of its GDP, while for Malaysia the figure is 95 per cent.
Looking ahead, Indonesia seems nicely placed to benefit from the inevitable rise in commodity prices as the cycle turns.
And don’t forget politics. Freedom House, an American think tank, now rates Indonesia as the only completely free country in Southeast Asia, only 11 years after Suharto’s fall.
It has developed a free press and minimised military involvement in politics, and in 2009 some 175 million voters across 17,000 tropical islands will choose a president, a vice
president and 560 parliamentarians. (One thing to watch in the long term: A new Indonesian law favouring local mining companies is scaring away big foreign miners.)
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Attracting private investors to build out badly needed infrastructure for the world’s fourth-most-populous nation is another top priority. Less than 53 per cent of Indonesians have access to electricity; 27 per cent have access to piped water; 43 per cent of the workforce is engaged in agriculture.
The nation requires US$140 billion of infrastructure investment over the next ten years. The government can finance only 40 per cent of this amount; the balance of funds must come from the private sector.
According to Edward Gustely, senior adviser to the Indonesian Ministry of Finance, one example of progress on this front is the Indonesia Clean Technology Fund, the first private equity fund of its kind with the participation of the Indonesian government that aims to mobilise private capital for investing in such things as alternative energy, water treatment and agritechnology.
Investors seem to be looking ahead as Jakarta’s market is surging off a bottom. Tying into the infrastructure theme is the well-positioned Telekomunikasi Indonesia (US$0.65, TLKM: Jakarta) — a company that has explosive growth potential, as only 40 per cent of Indonesians have mobile phones.
The company has bounced off its low and still offers good value, a strong balance sheet and sports a nice six per cent dividend.
An excellent play on clean energy and Indonesia’s proven natural reserves is PT Perusahaan Gas Negara (US$0.20, PGAS: Jakarta), which has roots going back to 1859. Gas Negara’s net profits for the first nine months of 2008 were up 56 per cent compared with the same period in 2007.
Those investors looking for an even broader play should look at the Indonesian Fund (IF) managed by Credit Suisse Asset Management. While down 60 per cent so far in 2008, IF has also come to life recently but still trades at a 12 per cent discount to its net asset value.
Indonesia is on the move, get on board. — Forbes Asia
http://www.forbes.com/global/2009/0112/076.html
Ini ada artikel menarik. "Indonesia is on the move, get on board. — Forbes Asia".
