Global economy continuously shifting to Asian markets The Jakarta Post, Jakarta Indonesia will benefit from an ongoing shift of economic activity towards emerging Asian markets, analyst says. The new trend is a result of the recent global financial downturn affecting many Western countries, Deloitte Asia Pacific CEO Chaly Mah said. “Economic recovery in many Western countries affected by the global financial crisis is uncertain. It’s relatively patchy,” he told The Jakarta Post during a recent interview. Many Western countries, including the US, are still suffering, he said. “They are still struggling with economic challenges, and the unemployment rate remains high. There is still no clear sign of economic growth there,” Mah said on the sidelines of an investment seminar entitled “Exploring the investment outlook in Indonesia 2009-2014”, held to celebrate the 20th anniversary of Deloitte Indonesia. Global economic activity was now shifting to Asia because of its huge population, Mah said. “Asia is a big economic market for multinational companies. It will remain economically strong despite the global crisis,” said Mah, citing China’s population of 1.3 billion people, India’s 1.1 billion and almost 600 million people in ASEAN, 240 million of which are Indonesian. Even after the global crisis, Asia will still attract investments and continue to grow because everybody is looking at the region, he said. However, many challenges confront emerging Asian economies, including Indonesia, while they compete to lure foreign investment. Vietnam, for example, is seen as a promising location due to certain advantages, such as cheap labor, and China remains one of Asia’s best investment destinations, Mah said. On the other hand, Indonesia had many similar strong points, including a healthy working class population, affordable labor costs and a strong macro economy as indicated by the country’s hefty per capita GDP, which is expected to exceed US$3,600 by 2012, he said. “A significant working class population is one of Indonesia’s key strong points in attracting larger investments,” Mah said, referring to 58 million working class Indonesians. With its 1.3 billion people, it is difficult to make comparisons to China in terms of population, but China’s major cities in the eastern coastal areas have shown significant increases in cost of living, Mah said. The Chinese government was encouraging multinational companies to invest in the western part of the country, where infrastructure might not be as well-developed, he said. Another Indonesian other advantage was its abundant natural resources, such as oil and natural gas reserves, Mah said. Indonesia’s democratic political environment might also serve as another advantage. “Indonesia has been an open economy for many years, even before the 1998 Asian crisis. This is a strong point when compared to other emerging markets,” Mah said, adding that government stability in Indonesia helped boost investor confidence. (ebf) http://www.thejakartapost.com