Indonesia: A Long-Term Giant, a Short-Term Price Taker
Back from a few days off and intentionally restarting from the big picture before diving back into business details, I came across an insightful article in The Business Times on Indonesia.
It reinforced a strong conviction: Indonesia is one of the most powerful growth stories in Asia over the next five years.
In the short term, however, uncertainty remains. Capital inflows are still highly FX-sensitive, partly because Indonesia is a price taker, not a price maker. Its export base is largely commodity-driven, with revenues tied to global prices and cycles. This contrasts with countries like Vietnam, where manufacturing exports are embedded in global value chains, generating more stable and predictable FX inflows.
The result is a familiar tension: strong long-term fundamentals, but limited policy room in the short term as currency stability takes priority.
