We are quite accustomed to Southeast Asian living standard rank, Singapore and Brunei being the wealthy nations, Malaysia and Thailand the middle income nations, while the rest poor nations.
But did you know that rapid economic growth and industrial expansion in recent years powered 1 more Southeast Asian economies into the middle income range as of 2011? That country is Indonesia
Indonesia today reported that last year its economy grew at the fastest pace in 15 years since 1996, as rising investment and domestic spending fought off a slowdown in export demand due to Europes debt crisis. GDP rose 6.5 percent in 2011, the Indonesian Statistics Bureau said in Jakarta today, this beats the 15 median estimates in a Bloomberg News survey of 6.44 percent increase.
Indonesias economic performance continues to trigger joyous optimism among the government and local economists. Senior Economist for Standard Chartered Bank Indonesia, Fauzi Ichsan, said Indonesia is expected to become one of the worlds leading economy soon. Last year, the Indonesian government set a goal to march towards USD$1 trillion GDP by 2015. The country currently has a GDP of USD$823 billion. Only 15 nations in the world are in the league of USD$1 trillion GDP, that include Australia, South Korea, Mexico, India, China and the United States.
The Indonesian economy, Southeast Asias biggest, is now not only in a stronger shape for high-growth, but has also outperformed neighbors like Malaysia, Thailand and the Philippines, whom all begin to show signs of stagnation. After the Asian financial crisis 1997-98, Indonesia lost its investment grade ratings with its bonds degraded to junk, but last month the country regained these ratings from Moodys Investors Service and Fitch Ratings after 14 years in absence.
Moodys raised Indonesias sovereign debt rating to Baa3 from Ba1 last month. Fitch upgraded its rating to BBB- in December, citing strong and resilient growth and declining public-debt ratios. The ratings upgrade lowered borrowing costs which led to increased business and industrial activities across Indonesia.
The Southeast Asia biggest country continues to grow rapidly as international businesses identified Indonesia as the third low-cost manufacturing base in Asia after India and China. Indonesia has a a population of 237 million, the fourth largest in the world and constitute a labor force with unit labor costs lower than that of China and Vietnam. In 2010 and 2011, Indonesia witnessed a massive inflow of FDI capital, with the automotive, steel, tires, textiles and garments, shoes, personal care products and many other industries enjoyed a rapid expansion not seen in many years.
In fact, Indonesia recently broke the Southeast Asian FDI (Foreign Direct Investment) pattern. Traditional ASEAN FDI ranking is usually topped by Singapore, then Malaysia and Thailand. In 2011 it was Singapore, Indonesia and Malaysia. Vietnam, who lagged Malaysia by just a mere USD$1 billion last year, is expected to come third this year.
But the major milestone is that Indonesia has breached the USD$3,000 GDP per capita in 2010 - the economic border between poor and lower-middle income nation. As of 2011 the Indonesia GDP per capita was USD$3,464.
The USD$3,000 GDP per capita was also the threshold that for a long time had been the target of the Chinese government. In 2002, China decided on a target of USD$3,000 GDP per capita by 2020. The Chinese economy, though, was able to achieve that level, not in 2020, but much earlier in 2008. Another fast-rising Asian economy, India, only managed USD$1,527.
As of 2011, China’s GDP per capita stood at USD$5,184 - effectively surpassed Thailand’s USD$4,997. Indonesia has been hoping to see similar successes, which would enable Indonesia to further take on Malaysia, whose GDP per capita was at USD$8,634 in 2011. Matching Singapore and Brunei would be harder as both have a per capita GDP of USD$50,714 and USD$38,192 respectively, and Indonesia would have to develop to the level of USA to reach there.
This is an amazing achievements by Indonesia, whom as early as in 2006, the Indonesian Central Bank reported a GDP per capita of USD$1,663, in other word, the country’s per capita more than doubled to USD$3,464 within just a short 5 years. Shall this trend be maintained, the country will overtake Thailand in 2015 and Malaysia in 2025.
Southeast Asia GDP per capita ranking is currently as follow:
- Singapore - USD$50,714
- Brunei - USD$38,192
- Malaysia - USD$8,634
- Thailand - USD$4,997
- Indonesia - USD$3,464
- Philippines - USD$2,255
- Vietnam - USD$1,361
- Laos - USD$1,086
- Cambodia - USD$1,061
- Myanmar - USD$778