Current Economic and Business Opportunities in Indonesia

Indonesia, which had an annual economic growth in excess of 7% over several years, is now (in 1999) facing a long period of negative growth (for the current year, estimated between 15 and 20%). Inflation, having been kept below 10% for the previous two or three years is likely to be well over 100% for this year. Rupiah borrowing interest rates are astronomical, effectively preventing borrowing. On some estimates, more than half of Indonesia's 200 million plus citizens are, or soon will be, living below the poverty line. Per capita annual income is down to around US$300, putting Indonesia right back down at the foot of the table internationally (alongside Bangladesh - where it was in 1966 when the Soeharto New Order government came to power). In many cases, Australian companies are playing an active part in attempts to revive the economy and to improve conditions for their local workforce. Despite the poor economic news, the author outlines opportunities for Australian businesses in Indonesia.