Posts Tagged ‘Indonesia’

Boosting Indonesia’s Economy

September 9th, 2015

hong kongActions by officials in Indonesia are being put in place to help ensure a “massive deregulation” in the country in the hopes of attracting investments. Due to a deceleration in domestic consumption, the economy has been waning. China’s super cheap prices hasn’t helped the country much either.

Some of the actions include: a reshuffle of the governmental economic group, new stimulus package, infrastructure projects (most notably the coal-fired power plant). Regulations are being reviewed to ensure that those which can be eliminated, will.

To get back on the successful bandwagon, Indonesia requires 3,518 trillion rupiah (HK$1.9 trillion) of investment to achieve its economic growth target of 7 percent. This can come from both local and FDIs. If this isn’t achieved, growth will not exceed more than 5 percent, the lowest it has been in the country since 2009.

In more positive news however, Indonesia is the battleground between China and Japan as to which country will get the rights to build its first high speed railway. That will definitely help its economic environment. The competitive spirit is good for everyone. Especially since Indonesia is long overdue for a multi-million dollar overhaul of its antiquated infrastructure.

Asia’s Economic Forecast

May 28th, 2014

asia-pacific-regionLast week Asia witnessed a dollar rise against the yen. This is probably connected to potential investors waiting on what lies ahead for the American and Japanese monetary policy. In addition, the Thai baht plummeted after martial law was declared by the army. The dollar has been mixed vis-à-vis other currencies in the Asia-Pacific region.

During the same time period, there was an escalation in the US dollar to 58.59 Indian Rupees, following political advancements in the general election by the India unit. As well, it strengthened to 11,446.30 Indonesian rupiah and 43.69 Philippine pesos.

How is Asia’s economic outlook being impacted today? According to the IMF, one way is China’s sharp slowdown (which was most likely caused by vulnerabilities in the fiscal sector). Yet it is anticipated that Asian growth and development will remain steady at 5.4 percent in 2014 (a slight jump from the previous forecast of 5.3 percent). Thereafter this will increase to 5.5 percent in 2015. America and Europe’s fiscal recovery is likely to be good news for Asian regional markets too.

But at the same time, warned Michael Spencer, Asia Chief Economist at Deutsche Bank, some of S.E Asia’s regional currencies could be subject to “downward pressure,” given that American bond yields increase vis-à-vis the recovering economy.

Those who are concerned about cheaper energy prices bringing back manufacturing to America and the impact that will have on the Asian economy, need not fret. Asia has a well-established supply chain and this thus should not affect its principal tech manufacturing market. Plastics and petrochemicals industry might encounter pressure however.

Is Asia the New Silicon Valley?

May 8th, 2013

Asian markets are developing rapidly. According to the Brookings Institute, Asia will host 64% of the global middle class by 2030. In the meantime, the number of investors is climbing.

Jungle Ventures, an investment company from Singapore, has made 16 investments in the region, ranging from India to New Zealand. Amit Anand, founder, explained that he is interested in businesses that have the potential to grow quickly.

“Everybody thinks that Silicon Valley is where the big markets are,” he said. “But south-east Asia is starting to prove a very attractive market. If willing entrepreneurs commit themselves, there is a lot of opportunity to be unlocked.

“Our hypothesis is that Asia, and particularly south-east Asia, is going to see a lot of $100 million-plus companies being made on various opportunities in internet, mobile and biomedical and so forth.”

Some Asian markets are more developed than others. According to Antonny Liem, Chief Executive Officer at Merah Putih Incubator, explained that Indonesia has great potential, but limited internet services.

“In Indonesia the internet is still very young, and it is hard to look at the exit horizon for return-on-investment, and IPO is definitely not on the horizon,” he said. “So if you talk about Indonesia, it is all about market size, about untapped potential, and it is a question of timing.”