Packersoldkidney
21-11-2004, 10:53 PM
With the rise of China in investor consciousness over recent years, perhaps it is time investors started looking elsewhere in the Asia pacific for opportunities to increase returns.
Indonesia has a population of approximately 250 million people, and is as culturally diverse as China and India. Recently they have had a change to a more investor-friendly leader in Bambang Yudhoyono, and their chief economics minister, Aburizal Bakrie seems determined to change Indonesia's hostile business climate.
China and Indonesia are similar in some ways in that corruption is a strong feature of the socio-political landscape. In Indonesia the corruption is notably endemic in the court system and couple this with restrictive red-tape practices of government, and you have a decidedly anti-business climate. Yet it is these areas the new regime that has promised to alter as it hopes to participate in the type of boom experienced in China. According to the World Bank, it takes about 150 days to open a business in Indonesia, about 3 times as long as the Asian average, and the cost of firing an Indonesian worker was equivalent of 157 weeks of salary, against an Asian average of 53 weeks.
According to a weekend article in the Australian Financial Review, Australian businessman John Singleton has invested heavily in a Indonesian television station, apparently because the long-term dynamics of the television industry in Indonesia are very favourable. People in Indonesia apparently read rarely, and much prefer to watch 5 hours a day of television. 250 million people doing that makes for a very sizable market for potential advertisers, especially if these people begin to enjoy the sort of discretionary spending experienced in first world countries.
I think further investigation into Indonesia would reveal context specific investment opportunities that would probably prosper over the longer term, provided of course the regulatory system is altered, an alteration that seems to be starting with the new regime in Jakarta.
Indonesia has a population of approximately 250 million people, and is as culturally diverse as China and India. Recently they have had a change to a more investor-friendly leader in Bambang Yudhoyono, and their chief economics minister, Aburizal Bakrie seems determined to change Indonesia's hostile business climate.
China and Indonesia are similar in some ways in that corruption is a strong feature of the socio-political landscape. In Indonesia the corruption is notably endemic in the court system and couple this with restrictive red-tape practices of government, and you have a decidedly anti-business climate. Yet it is these areas the new regime that has promised to alter as it hopes to participate in the type of boom experienced in China. According to the World Bank, it takes about 150 days to open a business in Indonesia, about 3 times as long as the Asian average, and the cost of firing an Indonesian worker was equivalent of 157 weeks of salary, against an Asian average of 53 weeks.
According to a weekend article in the Australian Financial Review, Australian businessman John Singleton has invested heavily in a Indonesian television station, apparently because the long-term dynamics of the television industry in Indonesia are very favourable. People in Indonesia apparently read rarely, and much prefer to watch 5 hours a day of television. 250 million people doing that makes for a very sizable market for potential advertisers, especially if these people begin to enjoy the sort of discretionary spending experienced in first world countries.
I think further investigation into Indonesia would reveal context specific investment opportunities that would probably prosper over the longer term, provided of course the regulatory system is altered, an alteration that seems to be starting with the new regime in Jakarta.