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Indonesia’s commitment to free markets on shaky grounds
Our new report ‘Indonesia – a consistent performer but opportunities go begging’ finds that
Indonesia stands out as an economy that is delivering consistently rapid growth. Last year the economy expanded by 6.2%, and real GDP growth is expected to reach 6.5% by 2014.
However, Indonesia’s outsized domestic economy – a strength during the global slowdown - also underscores one of the country’s main weaknesses: the absence of a competitive export-led manufacturing sector. Will that lack, along with the high cost of doing business in Indonesia, rapidly rising wages and increasingly protectionist trade measures mean that the country will struggle to compete with its more flexible neighbours in the future?