"while many European countries are struggling to avoid slipping back into recession, being dragged down by deepening debt crisis in the euro zone, one of the main problems facing the Indonesian Economy appears to be how to avoid growing too far, too fast"
-Josh Franken, Oxford business group (Jakarta post)
One of the interesting news these newly days consisting about how European countries like Greece, Spain, Portugal, Ireland and Italy facing much of problem concerning their debt crisis, higher unemployment rate, and deficit in GDP. While uncertainty is everywhere, It leads to great loss of the exchange rate of Euro to US Dollar, also the stock market is crashing everywhere, and the downgrade decision by S&P and fitch rating for Spain and Greece is worsening the case. The bail out for Greece come from European Union and IMF cost $1billion making a huge negative sentiment on the market, even country like Germany wont do any good to help Greece.
Wikipedia describe this thing as a late-2000 recession, it is an economic recession that began in the US and spreading to the industrialized world. It cause real problems to the social environment also in the developed countries. But for some reason, Asia's market looking very sharp and show the strength in the world economy contribution. The reason is developing countries are moving too fast while developed countries moving too slow, this create a differences in each leading countries like China, India. And of course Indonesia. The growing economy in Indonesia make we so called resistance-to-crisis countries by some countries, because when the US fall on 2008, until now Indonesia is one of the most countries that still create growth, not only in the financial sector but also on the real sector.
The indicator shows the good mark, let see the when the local automotive industry association (GAIKINDO) report that the vehicle sales in the beginning year 2010 has increased 78% over the last year 2009, and the GDP of Indonesia maintain 5,7% on year, not forget to mention that we have the fastest growing stock market (IHSG) throughout region since the 2008 crisis. While many countries suffering loss, so then investor finally leave them and find another place to grow their money, this is why we have a lot of hot money come from foreign buy that can crash anytime when we can't gain their trust to the economy, also on the real sector foreign direct investment showing great number that increasing 42% from last year.
The fact that Indonesia is a still commodity based countries who needs a buyer to buy our top commodities like oil, cpo, coffee, fish, cacao, and coal, we also get the impact of suffering, the trade on the export to European is decreasing but still at the tolerance level, but the demands is increasing on the regional market, showing a great proof of Asia's growth, it all occurs while the government don't have any clue from the rush of the imported goods from China.
History speaking, after the great recession on 1930's and the world war era, most of the countries are broke to paid the bill that uncounted, but finally they overcome the problem and becoming the strength on the world's economy. In Indonesia we already facing the crisis back in the 1998 also it happens in most Asia, now turns out that the condition is like flip and flop, up and down. Now the question is, Are we really facing the new era of economic, where now Asia's developing countries will come to contribute most of world GDP? Or, are we going into a trap, that looks like a bubbles when we run to fast that we blurred our eyes and finally crash like them?
Rianhafizblog2010
Source : Jakarta Post paper, Wikipedia, Kontan daily newspaper, globe asia
