Friday, December 9, 2016

Indonesia’s economy remains disappointing

Sri Mulyani Indrawati previous tenure ended in defeat, however, when she appeared to be chased from office because of a feud with Aburizal Bakrie, a tycoon-turned-politician. She insists that Jokowi is determined to combat corruption, reduce poverty and spread prosperity beyond the main island of Java, but she says she is not “naive” about the political difficulties involved. That Jokowi appointed her, given the feathers she has ruffled, is heartening. But her return is also a reminder of how reform efforts in Indonesia sometimes end.

WHEN campaigning for president in 2014, Joko Widodo said that he could make the Indonesian economy grow by 7% a year—a rate it regularly attained in the 1980s and 1990s but has not reached since. Alas, Mr Joko, known to all as Jokowi, has not met his target. This year the economy looks set to grow by about 5%, just as it did in 2014.

There is no doubting the potential of Indonesia, an archipelago of 13,500 islands that stretches 3,330 miles (5,360km) along the equator—the distance from London to Afghanistan. Its economy is the biggest in South-East Asia by far, bigger than those of Britain or France on a purchasing-power-parity basis. It is home to 261m people, half of whom are younger than 30.

Yet realising this potential has proved tricky of late.

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