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Already the world’s 17th-largest economy with a nominal GDP of $768bn in 2010, Indonesia is one of the three fastest-growing economies in Asia. Authorities are working to use the country’s key competitive advantages to attract the long-term investment needed to realise their goal of becoming one of the top 10 economies by 2025. Growth was forecast to reach 6.3-6.5% for 2011. However, addressing infrastructure will be a major challenge for the government, which has struggled for several years to come up with a clear plan for public-private partnership (PPP) projects for transport. The administration of Susilo Bambang Yudhoyono has pledged increased spending, but projects have been delayed due to issues such as land acquisition, and are just now moving towards tenders. Overall, growth is expected for both the short and long term, but more investments will be necessary to keep up with the booming ASEAN region. This chapter features interviews with Hatta Rajasa, Coordinating Minister of Economy; Agus Martowardojo, Minister of Finance; Prijono Sugiarto, President Director, Astra International; Gita Wirjawan, Minister of Trade and Chairman, Investment Coordinating Board; Bobby Umar, President Director, Bakrie & Brothers; and a viewpoint from Maxime Verhagen, Deputy Prime Minister and Minister of Economic Affairs of the Netherlands.

With only about 20% of Indonesian adults having any sort of relationship with the financial service sector, the country’s massive, untapped customer base offers great potential for the big industry players. The combination of a broadening and deepening market, and ever-sinking interest rates, has boosted the already-growing demand for financial services in the archipelago, from microcredit to mezzanine finance. Challenges ahead include determining how and to what extent the private sector can fund Indonesia's massive infrastructural projects, which are expected to draw both foreign and domestic capital. These long-term projects require a recalibration of time-scales for banks used to thinking in yearlong or five-year periods. This chapter includes interviews with Darmin Nasution, Governor, Bank Indonesia; Gatot M Suwondo, President Director, Bank Negara Indonesia; and a roundtable with Jahja Setiaatmadja, President Director, BCA; Michael Young, President Director, HSBC; Zulkifili Zaini, President Director, Bank Mandiri and David Fletcher, President Director, Permata Bank.

Since declaring independence from the Netherlands in 1945, Indonesia has become one of the world’s fastest developing and most economically promising nations. Its assumption of the presidency of ASEAN in 2011 testified both to the increasing interconnectedness of the region as well to the evolution of an Indonesian political system just over a decade removed from authoritarianism. Indonesia’s new democracy committed to addressing the legacy of centralised, authoritarian rule in part through decentralisation, which gave more autonomy to local administrative units. Problems of corruption and bureaucracy still remain, as in any developing country, but the record of post-Suharto politic stability has been a boon to economic development. This chapter contains interviews with President Susilo Bambang Yudhoyono; Abdullah Gül, President of Turkey; Marty Natalegawa, Minister of Foreign Affairs; Surin Pitsuwan, Secretary-General, ASEAN; and viewpoints from Hillary Clinton, US Secretary of State; and William Hague, UK Secretary of State for Foreign and Commonwealth Affairs.

The Report: South Africa 2012 will contain a detailed analysis of the energy sector in this region.

A detailed analysis of the South African economy will feature in The Report: South Africa 2012.