What’s Next for Indonesia?

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By Jacob Maslow

SouthEast Asia has a hidden potential powerhouse, ready to unleash itself upon the world, if only it could get its house in order.

With 250 million people, a young and growing population, and natural resources which would turn many nations green with envy, Indonesia is in a prime position to become the leader of SouthEast Asia.

It just has two major problems – corruption and suffocating red tape.

President Joko Widodo, leader of Indonesia, reshuffled his cabinet by appointing six new members in August, in an effort to spur economic growth and investor confidence.

Did it work?

Indonesia did have a relatively good year, with 4.5% growth in GDP and having only a 25% debt rate. It’s in good shape on paper, but is still battling with both inherent corruption and bureaucratic red tape which are both holding it back.

Can Widodo bring the reform needed to spur on growth in Indonesia this coming year? Can he finally take control of a fractured and often incomprehensible government and lead a potential powerhouse to its destiny?

With Indonesia committing to join the TPP during Widodo’s visit to the USA in October, and its commitment to cut red tape, speed up business processes and clean up its environmental act, could 2016 be the year Indonesia comes good?

“We can’t afford another year of wait and see” says the American Chamber of Commerce in Indonesia.

With contradictory signals changing by the day and long-standing vested interests refusing to budge to allow for economic reform, we wouldn’t hold our breath. In the meantime, Indonesia offer modest returns and decent potential for investors with the guts to take a risk.

The potential is certainly huge. As for whether Indonesia can dig deep and reach it, only time will tell.

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