Since the Asian financial crisis left the economy in ruins in the late 1990s, Indonesia’s economic performance has been impressive. Gross domestic product (GDP) growth is among the highest of the large emerging markets, consistently over 5 percent, with only a slight fall during the global financial crisis.

Already the world’s eighth largest economy in purchasing power parity terms, Indonesia is expected to rise to the fifth place by 2030 and fourth by 2050 according to PwC’s World in 2050 report.

Incredibly Indonesia isn’t one of our top 10 trading partners. Australian direct investment in Indonesia stands at just A$6.2 billion ($4,7 billion), less than half our investment in Papua New Guinea and barely 1 percent of our total stock of outward direct investment.

Part of the problem may be due to some profound misunderstandings about one of our nearest neighbors. For example, this year’s Lowy Poll found that just 27 percent of Australians agree that “Indonesia is a democracy”.

This is a worrisome finding. The 2014 presidential election was Indonesia’s third since Suharto stepped down almost two decades ago. It was also the largest single day of voting anywhere in the world, with over 130 million people exercising their democratic rights in a tightly fought contest.

Australian companies need to start paying greater attention to Indonesia. They need to understand what’s driving the country’s economic growth, what the opportunities are and what they need to do to capitalize.

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