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New Straits Times
3 days ago
- Business
- New Straits Times
Trillions, tigers and turnarounds
Southeast Asia's economic journey is one of the great plot twists of modern development. In the late 1960s, the region was a patchwork of newly independent nations—some hopeful, some fragile, and all facing the hard task of nation-building after centuries of colonial rule. Back then, the Philippines led the economic pack, buoyed by American institutions, a cosmopolitan capital, and an educated, English-speaking elite. Indonesia and Thailand were still predominantly agrarian but rich in demographic energy. Malaysia was just finding its industrial footing after formation. And Singapore, bereft of natural resources and separated from Malaysia, seemed an unlikely contender for regional dominance. Fast forward to the present, and that economic order has been turned on its head. Indonesia now leads the region with a trillion-dollar economy, Singapore has become a high-income global hub, and both Thailand and Malaysia have transitioned into mid-sized industrial powers. Meanwhile, the Philippines, once the early mover, has struggled to keep pace—its growth real but outstripped by those once in its shadow. So, what explains this reversal of fortunes? The answer isn't just about who grew fastest—it's about how they grew and what that reveals about the deeper engines of transformation in Southeast Asia. 1. Scale Without Strategy is Just Potential Energy Indonesia's population gave it tremendous latent power, even in the 1960s. But scale alone is never destiny. It took decades of reform, difficult political transitions, and a renewed national focus on infrastructure and deregulation—especially under President Joko Widodo—to turn potential into sustained output. Investments in logistics, digitalisation, and industrial upgrading have made Indonesia not just big, but increasingly strategic in global value chains. The Philippines, by contrast, was long a story of untapped potential. A vast diaspora, cultural links to the West, and a service-oriented workforce should have been assets. But policy inconsistency, weak institutions, and chronic underinvestment in infrastructure kept productivity low. The country became a reliable exporter of workers, but not of high-value goods or innovation. 2. Location Helps, but Governance Wins Singapore is the clearest example of how governance trumps geography. With no natural hinterland and few resources, it focused instead on institutional excellence. It didn't just operate a port—it became a platform for finance, logistics, arbitration, and innovation. Bureaucratic efficiency became a national export. Foreign investment wasn't just welcomed—it was strategically deployed. While others debated tariffs, Singapore streamlined customs. While others politicised education, it produced a globally competitive workforce. Its rise was not miraculous—it was meticulously engineered through decades of compounding good policy. 3. Reform is Not a One-Off; It's a Reflex Malaysia and Thailand rode the early waves of globalisation, leveraging export-led growth, attracting Japanese and Western capital, and building strong manufacturing ecosystems—especially in electronics. But both now face the "middle-income trap": where gains from cheap labour have plateaued and higher productivity hasn't yet emerged. In Malaysia's case, institutional complacency and political turbulence have dimmed the reform flame. In Thailand, frequent coups and uncertain rule of law have dulled investor confidence. The lesson is this: reform isn't a speech—it's a system of reflexes that must evolve over time. And in some corners of Asean, that muscle memory has faded. Beyond Growth: A Region Rewriting Its Own Playbook What Southeast Asia is experiencing today is not just a race for GDP milestones—it's a recalibration of what economic success looks like in a post-globalisation era. Once seen through the lens of Cold War alliances and postcolonial recovery, the region now sits at the intersection of global supply chain shifts, technological disruption, and geopolitical realignment. This situation demands a shift in mindset. Asean must stop being a passive beneficiary of global trade and become an active architect of its own destiny—by building regional value chains, accelerating digital integration, and embracing bold, sometimes uncomfortable, governance reforms. The prosperity seen today didn't emerge by accident. It was forged through hard choices, long-term planning, and a willingness to adapt. But the future will demand even more—especially as AI reshapes labour markets, climate change tests resilience, and geopolitical pressures tighten. Yes, Indonesia now wears the trillion-dollar crown. Singapore remains the region's startup nation. Malaysia and Thailand still punch above their weight. And the Philippines? Its story isn't finished. But the next chapter will require more than remittances and resilience. It will require reinvention. Because in Southeast Asia, history doesn't repeat—it recalibrates. And the region's most enduring truth remains: leadership isn't inherited. It's built. Samirul Ariff Othman is an economist, adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and senior consultant with Global Asia Consulting. The views expressed here are his own.
The Star
09-06-2025
- Politics
- The Star
Indonesia's PSI opens doors for former President Jokowi to join their leading ranks
JAKARTA (Bernama): Indonesia's Solidarity Party (PSI) has declared its readiness to welcome former president Joko Widodo, also known as Jokowi, into its ranks - should he choose to join the party. The party's deputy chairman, Andy Budiman, stated in a statement that PSI considers itself Jokowi's "political home' and is prepared to receive him with open arms. "PSI was founded to support Jokowi's vision and mission for Indonesia's development,' Andy said, stating that all party members continue to champion those goals. The statement came days after Jokowi indicated he favoured joining PSI rather than accepting an offer to become chairman of the Islamic-based United Development Party (PPP). Last Friday, the former president announced at his Surakarta residence that he will not join PPP, saying many candidates are better qualified and possess the capacity and competence to lead the party. Jokowi's connection with PSI is no surprise, as his youngest son, Kaesang Pangarep, was appointed PSI chairman in September 2023, boosting the party's profile among young urban voters. Though PSI failed to surpass the four per cent parliamentary threshold in the 2024 general election, it won seats in several regional legislatures and remains a key player in Indonesian politics. -- Bernama
IOL News
09-06-2025
- Automotive
- IOL News
BRICS+ Series: Indonesia Joins the World's Top 10 Manufacturing Nations
This handout picture taken and released on July 3, 2024 by the Indonesian Presidential Palace shows Indonesian President Joko Widodo (R) speaking with Hyundai Motor Group Executive Chairman Chung Eui-sun (C) during an inspection of the battery and electric vehicle manufacturing plant by PT Hyundai LG Indonesia-Green Power in Karawang, West Java. Indonesia's Manufacturing Global Ambitions The manufacturing sector constitutes a significant portion of Indonesia's economy, contributing 20% to the GDP and thereby playing a pivotal role in the nation's economic advancement. The majority of manufacturing operations are concentrated on the island of Java, which is home to 60% of the national population and generates 58% of the country's revenue. Indonesia's Manufacturing Growth & Key Sectors Overall, Indonesia's manufacturing sector has demonstrated consistent positive growth of 4% since 2016, despite the COVID-19 setbacks from the lockdown regulations, today the industry is ranked as the 12th largest manufacturer globally; and by 2030 the government has plans to elevate the country into the top 10 biggest economies and aiming to become a global manufacturing hub according to the Making Indonesia 4.0 strategy. One of the main areas of production include textiles, chemicals, electric vehicles (EVs), and food processing. Currently, manufacturing makes a major contribution as a source of employment, with the expansion of production, Indonesia stands to play an increasingly critical role in the various small and medium-sized enterprises which represent the majority of the sector. Government Initiatives: Making Indonesia 4.0 & Investment Attraction In order to achieve government-mandated goals such as manufacturing contributing 28% to GDP by 2045, there have been efforts to attract foreign investment for companies to operate in Indonesia's manufacturing hubs, thus supporting the increased market presence in the global supply chain. The country's geographic location is greatly beneficial in this capacity because of the Strait of Malacca- a vital channel for trading routes connecting the Pacific Ocean to the Indian and the South China Sea. BRICS+ Membership: Opportunities & Trade Expansion Following Indonesia's recent membership to BRICS+, the proximity the country has to the popular sea route makes for increased commercial activity which boosts the country's shipping, port and other coastal services. It is significantly important for its strategic geopolitical and economic characteristics, but also for security measures. By virtue of the BRICS+ bloc representing a large market, Indonesian membership could significantly increase the volume of trade flowing through or into the country. Secondly, aligned with the bloc's founding values, they seek to reshape the global economy and world order by ensuring that emerging markets and countries have a greater more equitable voice in international affairs, Indonesia has a great opportunity to influence sea trade interests, commodity pricing and global trade policies, especially considering that they recently had a trading surplus in February 2025 increasing to $3.12 billion (USD), a substantial raise from $0.83 billion the year before. Key Trade Partners & South-South Cooperation Some of the top exporting destinations that Indonesia trades with are China, the USA, India, Japan and Singapore. The top importing countries are China, USA, Japan, South Korea and Singapore. This is to potentially change because of the BRICS+ agenda promoting greater South-South cooperation to foster economic exchange and growth. China and India pose the greatest strengths in this capacity regarding the BRICS nations. China is recognised as the world's leading manufacturing nation, possessing substantial expertise in restructuring the global supply chain to be heavily centered around its operations. Furthermore, both China and India, the latter being the most populous country globally, possess vast consumer markets attributable to their large populations. India is home to a rapidly growing middle class and thus, increasing purchasing power- pivotal to the BRICS+ bloc financial cycle. Complementing this is New Delhi's robust service, telecommunications and information technology (IT) industries whose expertise can be great collaboration avenues to Indonesia for skill transfers. Challenges & The Road Ahead Indonesia aims to be a leader in manufacturing automation technologies. However, its current lack of skilled workers and infrastructure will need to be addressed to reach this goal. Recent data indicates that Indonesia's manufacturing growth is moderating. In March 2025, Indonesia's Manufacturing Purchasing Managers' Index (PMI) declined to 52.4 from 53.6 in February, signaling that while the sector is still expanding, the pace has slowed. However, foreign demand remains strong amidst rising input costs and the current volatility of international trade with the ongoing tariff wars initiating from the USA could host broader economic implications on future growth. Indonesia's strategic decision to diversify its international presence through BRICS+ membership significantly enhances the nation's prospects for realising its global manufacturing ambitions. This alliance presents opportunities to foster collaborative partnerships, bolster economic sovereignty by mitigating import dependency on raw materials, and solidify Indonesia's standing as a prominent industrial force on the world stage. Written by: *Dr Iqbal Survé Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN *Banthati Sekwala Associate at BRICS+ Consulting Group Egyptian & South African Specialist **The Views expressed do not necessarily reflect the views of Independent Media or IOL. ** MORE ARTICLES ON OUR WEBSITE ** Follow @brics_daily on X/Twitter & @brics_daily on Instagram for daily BRICS+ updates
South China Morning Post
01-06-2025
- Business
- South China Morning Post
Indonesia eyes high-speed rail to Surabaya, but China debt barriers loom
Indonesia is reviving plans to extend its Chinese-backed high-speed rail network, with ambitions to connect Jakarta with Surabaya, the nation's second-largest city. But analysts say familiar complications could stall the project, from regulatory hurdles to the mounting debt owed to China. The proposed extension would build on Whoosh – Southeast Asia's first high speed rail line – a US$7.3 billion project connecting capital Jakarta to Bandung in West Java province. The 142km (88-mile) railway, which was largely funded by China, was beset with delays and cost overruns before its inauguration by former president Joko Widodo in October 2023. Talk of extending the bullet train eastward to Surabaya has circulated since before Whoosh began operations, largely championed by Luhut Binsar Pandjaitan, Widodo's long-time fixer and the coordinating minister for maritime affairs and investment during his administration. Now serving as chairman of the National Economic Council, a government advisory body, Luhut reaffirmed during a trip to Beijing on May 20-22 that the rail extension remained on the agenda – though he conceded that Indonesian bureaucracy had stalled progress. Chinese Foreign Minister Wang Yi meets Luhut Binsar Pandjaitan (right), chairman of Indonesia's National Economic Council, in Beijing on May 20. Photo: Xinhua 'The issue is actually on our side because we haven't finished drafting the regulation yet. It's that simple. But once it's done, we'll start talking about a joint study [with China],' Luhut told Indonesia's state-owned Antara news agency.
RNZ News
15-05-2025
- Politics
- RNZ News
Indigenous West Papuans claim Indonesian government is 'land grabbing'
Indigenous Papuans in Merauke district protest to protect their customary lands. Crosses have been used as a protest symbol since 2010 when the Indonesian government launched the Merauke Integrated Food and Energy Estate project. Photo: Wensi Fatubun West Papuans in Merauke claim the Indonesian government is stealing land to build its global "food barn" and feed its population of 280 million. Indonesia denies this and says all transactions are lawful. President Prabowo Subianto's administration wants Indonesia to be able to feed its population without imports as early as 2028, with the greater goal of exporting food. To get there, Indonesia plans to convert millions of hectares into farmland. Wensi Fatubun, from Merauke in Indonesian-occupied Papua close to Papua New Guinea's border, said forests where he grew up are being cleared. "[The] Indonesian government took the land for the [food] security project, it was not consulted or consented by Indigenous Papuan," Fatubun said. Prabowo's goal is a continuation of his predecessors. In 2020, President Joko Widodo announced the establishment of a national food estate project which aimed at opening up new areas of farmland outside Java Island. It is similar to the failed Merauke Integrated Food and Energy Estate, spearheaded by President Susilo Bambang Yudhoyono in 2010. About 1.3 million hectares were set aside in Merauke for it: half for food crops, 30 percent sugar cane, and 20 percent for palm. A report from the United States Department of Agriculture said it encountered resistance from locals and legal challenges. "Approximately 90 percent of the targeted areas were forest, which provided a source of livelihood for many locals. Accordingly, the development plans became a flashpoint for local activists concerned about environmental and biodiversity impacts," the report said. Probowo's government has the more ambitious goal of opening up three million hectares of agricultural land in Merauke - two million for rice and one million for sugarcane. Human Rights Watch researcher Andreas Harsono said President Prabowo had elevated the "so-called food security issue". "[The President] wants Merauke in West Papua to be the so called national food barn. This deforestation land grabbing is much more deeper in Merauke than in the past." Harsono said conflict had escalated in West Papua and is now on par with some of the most violent periods in the past 60 years, but he was not sure if it is connected to the President's focus on food security. BenarNews reported that about 2000 troops were deployed late last year in Merauke to provide security at a two-million-hectare food plantation. A Papuan man (right) in traditional clothing and face painted with the banned Morning Star flag stands next to a policeman during a demonstration demanding a referendum on independence in Yogyakarta on 1 December 2023. Photo: AFP / Devi Rahman Rosa Moiwend, from Merauke, said the soldiers work alongside farmers. "They are expected to teach local farmers how to use mechanical agriculture equipment," Moiwend said. "But as West Papuan people, the presence of the military in the middle of the community, watching communities activities, people's movement when they travel from one place to another, actually creates fear among the people in Merauke." Like Harsono and Fatubun, Moiwend said "land grabs" are happening. However, she said it still involves a land broker, which creates a facade of a fair procedure. "Indigenous Merauke, indigenous Marind people like myself and my people, we do not sell land because land belongs to the community. It is communal land." However, a spokesperson for Indonesia's Embassy in Wellington said all processes and steps involving land sales had been lawful "always respecting the inclinations of local tribes". "Its development always involving local authorities, especially chief tribes for the consent of their ulayat (traditional land)," they said. "There is no land grab without consent, and the government also working on the biodiversity conservation and forestry production to create space harmonisation model with Conservation International, Medco Group, and couple of other independent organisations." Catherine Delahunty says New Zealand and Australia are failing the citizens of West Papua. Photo: Johnny Blades / VNP West Papua Action Aotearoa spokesperson Catherine Delahunty said the region is part of the lungs of the Pacific, which is now being destroyed. "The plan has been around for a long time but it seems to have escalated under Prabowo," Delahunty said. "They are stripping those lands and stripping those communities who live there from their traditional foods such as the sago palm to turn the whole of Merauke into sugar cane, rice and palm plantations. "The effects have been massive and they're just getting worse." She said New Zealand and Australia - the two most powerful governments in the South Pacific - are failing in its obligations to the citizens of West Papua. "You could almost justify, because it's a long way away from other parts of the world, that Europe and the northern hemisphere don't really understand West Papua but there's no excuse for us. "These people are in our region but they're not white people. I think there's a huge element of racism towards Papuans and towards Pacific nations who aren't perceived as important in the western worldview." She said there was willingness to trade and New Zealand did not want to rock the boat, with Indonesia as a regional powerhouse. That coupled with a media blackout makes it easy for Indonesia to act with impunity, Delahunty said.
