In early 2007, President Susilo Bambang Yudhoyono announced a very ambitious vision: "By 2030 Indonesia will be the fifth largest economy in the world". Since we are in a presidential election year, and, above all, since the IMF has just released their latest biannual World Economic Outlook, I think it is time for a plausibility check.

Per 2008 the status is the following :

One of the common ways to measure world rankings would be to use the GDP at Purchasing Power Parity. Throughout the entire new millennium Indonesia has been holding position No. 16 (apart from 2003 when it was at No. 15). Obviously, nothing dramatic has happened for quite a long time in the world economic pecking order.

Alternatively, we can look at a ranking that uses the countries' GDPs at current prices and then converts them into US dollars. In fact, using this method we have been witnessing a couple of changes over the past few years. Amongst others, China has moved from rank 6 (2001) to rank 3 with only Japan and the US in front. For Indonesia, also good news can be presented.

Starting at rank No. 28 in 2001, we have climbed to No. 19 in the world. Well done! Indonesia truly deserves to be a member of the exclusive G-20 club and to share responsibility in shaping the economic world in times of heavy crisis. However, it is still a very long way to go to reach No. 5. Currently, France is holding that position with a GDP 5.6 times larger than Indonesia's.

Getting back to Pak SBY's 2030 vision, I would like to offer the following simplified plausibility check:

Using the average GDP growth rate from 1980 until 2014 (2009 - 2014 estimates by IMF), then the extrapolation of the long-term growth path reveals for 2030 that Indonesia will achieve . only position No. 17!

For the curious economists among us, I can tell you that this simplified calculation model reveals that the best Indonesia can ever achieve will be rank No.6. This will happen in the year 2069, hence 39 years after Pak SBY's No. 5 target.

Anyway, in order to remain on a sustainable long-term growth path, even until 2069 and beyond, it is very obvious that we will have to cope with a lot of changes in the world. It is very likely that Indonesia's oil & gas reserves will be exhausted by then. Probably even coal and other mineral resources cannot be among the backbones of our exports any more.

Maybe even palm oil and rubber by then will already have been replaced with synthetic solutions. So, with the new cabinet starting their work in October 2009, I would highly appreciate seeing something like a "100-year economic vision" for Indonesia.

What will our economic structure be like in future for us to improve our global ranking? Well, this brings me back to one of my favorite topics; Among others, it is probably a good question to ask (see The Jakarta Post Mar. 24, 2009) : "Why doesn't Indonesia invest in tourism ?".

Eckart Schumacher

BSD-City, Banten

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