Monday, 8 August 2011

Pat Lil', Do More

“Indonesia…? Isn’t that the place to be investing in these days…?”

“Jakarta… The traffic’s awful, but many are paying attention to your economic growth now…”

These were some of the comments that I got when I answered people’s questions about where I come from. I was in Singapore, at a friend’s wedding, surrounded by bankers, financial analysts, lawyers, businessmen, and other types of professionals.

I have to admit, it was with some sense of pride that I absorb the positive comments made by these people regarding my country. Of course, not all were positive, but I felt that the positive ones mattered most. At least, these comments seem to be lacking among the Indonesian people.

In a year when Standard and Poor’s lowered the US’ credit rating for the first time since God-know-when, Indonesia’s rating was given a boost last April to BB+, just one level below investment-grade. The rating was the highest since the Asian financial crisis hit the country in 1997. It was last increased in March 2010, thus indicating a steady progress.

Moreover, we should be happy that, according to the S&P people, this progressing trend is based on the nation’s “resilient” economy and improving finances. Specifically, kudos was given to the Government’s financial efforts in lowering the nation’s debt ratio and enhancing our foreign exchange reserves.

Fitch Ratings and Moody’s Investors Service also rank Indonesia one level below investment grade. Fitch in February raised its BB+ outlook on Indonesia to positive from stable.

However, in view of the dire conditions facing other parts of the world, including the US and many European economies, we should not pat ourselves on the back for too long. We must continue to be vigilant and attentive of our surroundings, making sure that economic development is equitable and inclusive.

Our inflation remains high. And more importantly, our efforts in bureaucratic reform, legal reform, human resources reform, and anti-corruption efforts remain on an up-hill climb. As well, economic development must also feature improving living standards for Indonesians all around.

We must continue to tread on this path. There has been some success in the last few years, and we should take pride on this. Pride brings about confidence. However, we must make sure that confidence does not breed a sense of accomplishment that is way too early.

We are still “one level below investment-grade”. We need to make it to that next level. Then maybe we can pat ourselves some more on the back.

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