Posts tagged economic development
Indonesia could exceed projections and grow up to 6.4% this year, says another banking report, while adding its voice to cautions that economic reforms must accelerate in order to do so. The country won’t see super growth of 8-9% without infrastructure and manufacturing industry development, continued land reform and increased government spending.
This report comes from UK-based Standard Chartered Bank (StanChart) and is the latest in a string of calls for Indonesia to improve its economic foundations to achieve its potential. Only 5% of US$145 billion in infrastructure projects earmarked for President Susilo Bambang Yudhoyono’s first term (2005-09) have been realized, and government spending was a deficit of 1.5% of GDP, less than the 1.8% or $14.5 billion. Even that is an improvement on 2010′s 0.6% despite a budget target of 2.1%, according to the Jakarta Globe.
The World Bank agreed with StanChart’s claims, keeping its growth projections at 6.5% for this year and next, and adding that “poor infrastructure was “one of the biggest obstacles to firms operating in Indonesia.” The Bank’s chief economist Justin Yifu Lin said Indonesia’s destiny was in Indonesians’ hands, and that with more government discipline it could replicate other Asian countries’ emergence from agricultural to developed economies and join the world’s top 10.
source & article: the Jakarta Globe
Like many emerging countries in the region and around the world, Malaysia understands that economic development regions can be great drivers of growth if done properly. While Johor’s Iskandar Malaysia has been getting most of the press recently, there are also plans to transform four other regions around the country.
They are: Georgetown and the Northern Corridor Economic Region (NCER); Kuantan and the East Coast Economic Region (ECER); Kuching and the Sarawak Corridor of Renewable Energy (SCORE); and Kota Kinabalu and Sabah Development Corridor (SDC). Plans to focus on these regions have existed for at least four years, but the government’s Performance & Delivery Unit (Pemandu) is accelerating efforts with specific transformation programmes and investigative laboratories to take them to the next level of growth.
Pemandu said “The Regional Cities and Economic Corridors Transformation Programmes will build on the excellent work done to-date. It will take the development achieved to-date to the next level to build out regional and global hubs in their economic areas of specialization.”
Malaysia yesterday announced 15 initiatives, including nine new projects and seven recaps, as part of its Economic Transformation Programme (ETP). According to Prime Minister Najib Razak, the ETP is already bearing fruit despite running for only a short time.
Yesterday’s announcement was the sixth regular update of the ETP, and sees the programme reach 50% (or 65) of its 131 ‘Entry Point Projects’ launched. The 15 new initiatives promise to bring in RM2.77 billion (US$913.8 million) in investment, add RM66.31 billion ($21.87 billion) to Malaysia’s Gross National Income and create 36,595 new jobs by the target year of 2020.
The initiatives (with their national key economic areas) are: (more…)
Indonesia got a visit from New York property behemoth the Trump Organization this week, with its executive vice president and heir to the famous name Donald Trump Jr. impressed at what he sees as a “potential property gold mine” as the regional economy grows.
Donald Jr. was on a research mission to Indonesia with plans to set up a base, holding talks with local property interests Lippo Group and Bakrie Group. While he said it was too early to discuss numbers or partnerships, he confessed that the scene in Indonesia was “totally different” to what he imagined it would be, with a growing wealthy class and a “robust domestic market forming”.
In this interview with the Jakarta Globe, Trump also said his organization was “very bullish” about Asia in general and that they would go wherever wealthy classes were growing the fastest. The Trump Organization, an American institution in the real estate, retail, commercial property, hotel and golf worlds, has been looking outside North America to Asia and Eastern Europe as its home market still struggles to regain confidence after the 2008 financial crisis.
As for Indonesia’s growing number of wealthy, an additional 7 million were joining the middle classes every year and the combined wealth of the country’s 150 richest individuals jumped 75% from last year to US$107.9 billion. The national per capita income, currently $3005 a year, should reach $5000 a year on current projections.
source & articles: The Jakarta Globe
Services exports, including business process outsourcing (BPO) have dramatically increased their contribution to the Philippines’ economy in the past decade, allowing it to become the world’s third largest provider with 15% of the global market, after India (37%) and Canada (27%).
Worth only 9% of the Philippines’ exports in 1999, the services sector grew an average of 3.6% per year and represented 21% in 2009. At a services conference in Makati City this wee, one World Bank representative called the growth “a tremendous achievement” while another said the Philippines’ quality human capital and reliable telecommunications infrastructure aided the progress.
The Philippines has also been a net exporter of services since 2006, a rarity in the developing world. The World Bank said the country has provided and “enabling environment” for the services sector, which could provide more channels for sustained economic growth and reduce poverty.
source & article: PhilStar.com
Malaysia has announced a plan to build a ‘green economy’ and ‘smart cities’, enlisting the help of a panel of international luminaries to help develop a plan for the future.
Prime Minister Najib Razak was in New York to convene the 42-member Global Science and Innovation Advisory Council, which includes economist Jeffrey Sachs, tycoon Steve Forbes and chairman of the UN’s Intergovernmental Panel on Climate Change, Rajendra Pachauri.
The new Malaysian economy should focus on energy efficiency, science and technology, as well as educating and training its workforce to create more entrepreneurs and innovators. As well as chasing ‘quick wins’ in proven local industries like palm oil, Malaysia would also strive to create ‘smart cities’ and ‘smart towns’, with access to the internet as well as basic services like electricity and water. All would be provided efficiently with information technology.
This piece from Channel NewsAsia is cautious in its support for the new proposals and of Malaysia’s grand economic projects in general. Citigroup economist Kit Wei Zheng said that while Najib’s government had been successful at attracting more foreign investment, overall results were slower and did not match the announcements being made. Others, like Gurmit Singh of the Centre for Environment, Technology and Development Malaysia, questioned the meaning of ‘green economy’ and wondered if it meant just a ‘repackaging of products’.
Officials from the Philippines have visited China to drum up investment and support for new infrastructure projects, which the new Aquino administration hopes will spur growth and enable the country to get back some of its mojo for economic development. Chinese state-owned enterprises and private firms have expressed interest in playing a part, with Philippines Finance Secretary Cesar Purisima reporting the Chinese consider his country ‘an important neighbor’. They also appeared willing to fund grants and interest-free loans in order to fund feasibility studies into priority projects.
Although the visit was a general mission to gauge interest in closer economic ties, officials will now return to China with a specific list of projects and priorities. Public-private partnerships are the main attractions the government has planned for companies investing in the Philippines, with a focus on infrastructure development.
According to the Philippine Daily Inquirer, potential partnerships include: the MRT/LRT expansion project, MRT Line 2 East extension, Panglao Airport, Laguindingan Airport operation and maintenance, Puerto Princesa Airport, Daraga International Airport, Kalibo Airport, Naia Terminal 3 upgrade and full operationalization, CALA Expressway (Manila side), Naia Expressway Phase II, Central Luzon Expressway Phase I, and supply of treated bulk water for Metro Manila.
from The Jakarta Globe: The Indonesian government this week unveiled a master plan to raise the economy into the world’s top ten and raise per capita income to US$26,000 by 2030, a plan that relies heavily on private sector investment.
The plan identifies six main ‘economic corridors’, or key areas for development in each region based on existing economic strengths:
- Java: industry and services,
- Sumatra: agricultural and national energy center,
- Kalimantan: mining and energy,
- Sulawesi-North Maluku: agriculture and fisheries,
- Bali-Nusa Tenggara: tourism and national food self-sufficiency,
- Papua-Maluku: natural and human resources.
The government’s eight key economic priorities will be manufacturing, agriculture, fisheries, mining, tourism, telecommunications, energy and industrial zones. Hatta Rajasa, coordinating minister for the economy, said Indonesia would need $932 billion in investment by 2030 to realize the plan in two stages. The first stage would focus on developing infrastructure by 2014 and requires $76 billion, with the remainder working on that foundation.
The reaction from some members of the private sector, whose action the government needs to inspire most, was somewhat lukewarm. The article quotes one launch attendee as saying the plan offered nothing particularly new, and that what the private sector really needed was simple solutions like a reduction in administrative red tape, overlapping jurisdictions and land acquisition issues. Business also needed further incentives and an improved legal environment to provide the level of investment required.
Here’s a short BBC video report on Indonesia’s growth and its effects on a growing middle class, whose new wealth and access to cheaper credit is allowing them to expand their businesses and afford major consumer goods, like private vehicles. There’s still a note of caution, however, since at least half of Indonesia’s population still live on $2 a day, and are hit hard by the boom’s inflationary side effects, especially on food.
From UK Trade & Investment (UKTI): The UK Ambassador to the Philippines, Stephen Lillie, explains why the Philippines is the perfect place to look for new opportunities. In short: it’s the 12th largest country in the world with a growing domestic consumer market, English is almost universal, the government is committed to creating a business friendly environment, and it’s a world beater in business process outsourcing for companies large and small.