INDONESIA LOSING ITS FOOTING?
Tan Sri Lin See-Yan
The Star, April 21, 2012
SINCE Susilo Bambang Yudhoyono (SBY) came to power, I have been a fan. Mind you, Indonesia remains today a nation full of problems: political, economic and social. His reputation was built on sustaining a predictable regulatory environment.
Despite its problems, Fitch re-rated Indonesia in December 2011 with an investment-grade credit after 14 years in junk status, followed by a similar move in January 2012 from Moody's Investors Service. Indonesia, like many in Asia, expects sluggish global demand to slow its rapid growth, to 6.43% in the first quarter of 2012 after posting GDP growth of 6.5% in 2011, the quickest pace since the 1997-98 currency crisis.
During my last visit in March, I gathered investors are still flocking to Indonesia simply because there is a deep affiliation that “tomorrow will be better than today” and today is pretty good so far. Indonesia must realise that a good reputation is fragile. It is built over years but can be destroyed overnight.
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