Jakarta seen as most resilient in ASEAN

Reading Time: 2 minutes

Among the fastest-growing metropolitan economies in 2012, Jakarta and Bangkok have been found to be the most resilient cities during the current volatile global economic environment, according to the “Global Metro Monitor 2012” published by Washington-based nonprofit think tank Brookings Institution.

Brookings found that the largest changes in GDP per capita in ASEAN from the pre-crisis period 1993-2007 and 2011-2012 were in Jakarta (plus 3.8 percentage points) and in Bangkok (plus 2.3 percentage points). In East Asia, both metropolises were only topped by Nanning in China.

For Jakarta, the 1993 to 2007 period was marked by the 1998 Asian financial crisis and the fall of the Suharto regime, Brookings said in the study. The Asian financial crisis first had devastating effects on Indonesia and Jakarta as well. Between 1997 and 1998 Jakarta’s output shrank by almost a quarter.

However, following the crisis and President Suharto’s resignation, Indonesia enjoyed robust economic growth, averaging 5.8 per cent annual growth between 2002 and 2007. Other than a modest decline in employment in 2011, the Jakarta metro area weathered the global volatile period of the last five years well on the strength of its services base and Indonesia’s high rate of growth.

The metro area recovered its previous employment peak by 2012. At the beginning of the world downturn, Indonesia instituted a policy of low interest rates meant to spur economic growth. Jakarta’s main sectors, business and financial services and trade and tourism, benefited from this policy. Business and financial services generated a quarter of metro output growth in 2012, and the trade sector, including retail and wholesale, accounted for more than one-third of additional metro jobs.

Jakarta also thrived due to continuous national economic expansion over the last five years, as Indonesia enjoys proximity to many trading partners in the Southeast Asia-Pacific and relatively low costs of labour.

The Indonesian capital is preparing for future growth by revamping its current infrastructure, Brookings said. For example,  the state airport operator Angkasa Pura II recently started an expansion at Soekarno-Hatta International Airport aimed at increasing the capacity of Indonesia’s global air gateway three-fold.

Japan has already seized on this market opportunity by signing an agreement with Indonesia for the construction of roads, railways, airports, and other strategic infrastructure in Jakarta and its neighbouring cities.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 2 minutes

Among the fastest-growing metropolitan economies in 2012, Jakarta and Bangkok have been found to be the most resilient cities during the current volatile global economic environment, according to the “Global Metro Monitor 2012” published by Washington-based nonprofit think tank Brookings Institution.

Reading Time: 2 minutes

Among the fastest-growing metropolitan economies in 2012, Jakarta and Bangkok have been found to be the most resilient cities during the current volatile global economic environment, according to the “Global Metro Monitor 2012” published by Washington-based nonprofit think tank Brookings Institution.

Brookings found that the largest changes in GDP per capita in ASEAN from the pre-crisis period 1993-2007 and 2011-2012 were in Jakarta (plus 3.8 percentage points) and in Bangkok (plus 2.3 percentage points). In East Asia, both metropolises were only topped by Nanning in China.

For Jakarta, the 1993 to 2007 period was marked by the 1998 Asian financial crisis and the fall of the Suharto regime, Brookings said in the study. The Asian financial crisis first had devastating effects on Indonesia and Jakarta as well. Between 1997 and 1998 Jakarta’s output shrank by almost a quarter.

However, following the crisis and President Suharto’s resignation, Indonesia enjoyed robust economic growth, averaging 5.8 per cent annual growth between 2002 and 2007. Other than a modest decline in employment in 2011, the Jakarta metro area weathered the global volatile period of the last five years well on the strength of its services base and Indonesia’s high rate of growth.

The metro area recovered its previous employment peak by 2012. At the beginning of the world downturn, Indonesia instituted a policy of low interest rates meant to spur economic growth. Jakarta’s main sectors, business and financial services and trade and tourism, benefited from this policy. Business and financial services generated a quarter of metro output growth in 2012, and the trade sector, including retail and wholesale, accounted for more than one-third of additional metro jobs.

Jakarta also thrived due to continuous national economic expansion over the last five years, as Indonesia enjoys proximity to many trading partners in the Southeast Asia-Pacific and relatively low costs of labour.

The Indonesian capital is preparing for future growth by revamping its current infrastructure, Brookings said. For example,  the state airport operator Angkasa Pura II recently started an expansion at Soekarno-Hatta International Airport aimed at increasing the capacity of Indonesia’s global air gateway three-fold.

Japan has already seized on this market opportunity by signing an agreement with Indonesia for the construction of roads, railways, airports, and other strategic infrastructure in Jakarta and its neighbouring cities.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid