Indonesia

Review: Indonesia’s Jokowi learns limits to change

28 August 2020

Furniture seller-turned-president Joko Widodo was tipped to end corruption and push reforms. In “Man of Contradictions”, Ben Bland concludes the leader is weak and the hopes placed in him were unrealistic. Even a popular outsider cannot easily take on an entrenched system.

Indonesia cautiously crosses central bank rubicon

9 July 2020

Bank Indonesia will buy $28 bln of bonds directly from the government, breaking a long-held taboo. It will refund interest gains, and the securities will be tradeable, providing price transparency. That’s about as credible as an emerging market monetary authority can hope to be.

Poor-country central banks will go awry aping Fed

4 May 2020

Rate-setters from Indonesia to Hungary are copying Fed Chair Jay Powell by buying bonds. Others could well follow. That will curb borrowing costs at a time of rising public spending. But these policymakers run bigger inflation and credibility risks than their developed peers.

Coronabonds can issue social goods

8 April 2020

Indonesia sold $4.3 bln worth of bonds, partly to tackle Covid-19. It copies a Chinese template. And an unusually long 50-year tranche found favour with life insurers. Investors welcome spin that makes portfolios look responsible, and this one may go viral faster than most.

Torpor at home lures Thai lender to pricey Jakarta

13 December 2019

Bangkok Bank has beaten Japanese rivals to take control of Indonesia's Permata, for some $2.7 bln. StanChart, selling along with a local conglomerate, gets a welcome boost. For Bangkok, though, a deal at near twice the target's book value is a necessary gamble on faster growth.

Gojek founder can re-route Indonesia’s rough ride

12 November 2019

Growth slipped to a disappointing 5% and the outlook is glum, with 55% of students ending school barely literate. That’s a bigger challenge for new education minister Nadiem Makarim than Jakarta traffic. This long haul would benefit from entrepreneurial and pragmatic direction.

Asia’s airports fly far higher than its carriers

5 November 2019

Thai Airways’ market value has shrunk by a third this year to $600 mln, and the loss-making airline says it is running out of time. Airports of Thailand, by contrast, is worth $38 bln and is a top performer. It’s a light signal for investors eyeing the region’s travel boom.

Gojek CEO takes risky detour into Jakarta politics

21 October 2019

The boss of Indonesia’s $10 bln rides-to-video super app has quit to join cabinet. The sagging economy badly needs a tech boost. But rules for digital payments and other areas are in flux, leaving room for conflicts of interest that could hurt the government and the unicorn.

Indonesia can learn from Hong Kong’s unrest

4 October 2019

Unpopular legislative changes have triggered street clashes, just as in the former British colony. It’s early enough for President Joko Widodo to defuse the tension and salvage his anti-graft credentials. Otherwise, tackling labour laws and other thorny fixes will get tougher.

The Exchange: The Asianisation of the world

17 September 2019

A splintering West and increasingly interconnected East is creating a newly powerful mega-region, according to Parag Khanna, author of “The Future is Asian.” He swung by the Breakingviews office in Hong Kong to break down the economic and geopolitical rationales behind his idea.

Uber and Lyft create Asian valuation conundrum

30 May 2019

U.S. ride-hailing exuberance faded into lacklustre market debuts. At the same time, Singapore’s $14 bln Grab, for example, recently raised capital privately at 7 times expected revenue, compared to Uber’s 5 times. Fast-growing payment units can only justify some of the gap.

Ditching Jakarta is worth the risk for Indonesia

3 May 2019

President Joko Widodo approved a $30 bln plan to uproot civil servants from the capital. Congestion is crippling and wealth too concentrated in a sinking city. A bold, wholesale move a la Brasilia or Canberra may be too costly, but dispersing government agencies would be a start.

Viewsroom: Will millennials kill Silicon Valley?

25 April 2019

Young, tech-savvy adults say everything from high prices to climate change may prompt them to leave the San Francisco area. Other U.S. cities can benefit. Also: Why CEO Jack Dorsey should favor Square over Twitter. And what to expect from Indonesian President Widodo’s second term.

Indonesian election may change some investor votes

18 April 2019

Polls suggest Joko Widodo won another term, but with a narrow enough victory margin to embolden a belligerent opposition. There were pockets of populist success, too. That will temper hopes he’ll finally tackle energy subsidies and even rigid labour rules to woo foreign money.

Indonesia’s Jokowi can make a final term count

8 April 2019

The president is on track to win re-election. His first five years had successes in infrastructure, and reduced rural poverty. With a stronger hand, he can tackle pricklier issues hindering private investment and job creation. That will help a sluggish economy, and his legacy.

Indonesia’s Go-Jek can hitch ride on Meituan IPO

17 September 2018

The smartphone-based taxi service is raising about $2 bln. New cash will help Nadiem Makarim’s unicorn expand in the region and even into online shopping. A successful market debut by its Chinese backer Meituan Dianping also should fuel Go-Jek’s quest to be a multi-purpose app.

Indonesia can best defend rupiah by staying calm

6 September 2018

An emerging markets rout has pushed the rupiah to its weakest since the 1998 Asian crisis. Policymakers, who have until now been laudably proactive, appear rattled. But threats against speculators are less helpful than higher interest rates and reforms that encourage investment.

Consumer giants have bigger problems than Turkey

28 August 2018

Unilever and Nestlé can resist a crisis in Turkey, which accounts for little of their revenue. But both will suffer if troubles spread across emerging markets, which account for about half of group sales. All the more so since Western shoppers are unlikely to take up the slack.

Indonesian fight to help rupiah carries risks

15 August 2018

The central bank has raised rates to limit the damage to its currency from a Turkey-triggered drop in emerging markets. Meanwhile, the government is slapping tariffs on some imports. Monetary fixes are rarely enough but Jakarta’s solutions may jeopardise welcome economic reforms.

Indonesia’s pre-emptive strike sends right signal

30 May 2018

Southeast Asia's largest economy has raised rates for the second time in two weeks. It sends a clear message that the new central bank governor Perry Warjiyo will put a steady currency first. Much of the 25-basis-point hike has been priced in, but timing and tone should reassure.