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Jakarta Post

View Point: From BRIC, N-11, CIVETS, 3G to MINT '€” the big lie, or the big ploy?

  • Meidyatama Suryodiningrat

    The Jakarta Post

Jakarta   /   Sun, January 5, 2014   /  11:59 am

As investors increasingly looked beyond the traditional Western markets to expand their portfolio, Goldman Sachs economist Jim O'€™Neill coined the now popular phrase '€œBRIC'€ to identify four countries '€” Brazil, Russia, India and China '€” touted as emerging economic powerhouses.

O'€™Neill'€™s phrase in 2001 cemented attention on emerging markets and also a slew of research among economists, think tanks and bankers searching for '€œthe next BRIC'€.

Not only that, the progeny of the term '€œBRIC'€ was an alphabet soup of snappy catchphrases that allowed investment bankers to market prospects to eager investors.

Many argued that Indonesia should have been included in the illustrious four as the second '€œI'€ in '€œBRICI'€ or '€œBRIIC'€.

But in early 2000, India, not Indonesia, was the clear '€œI'€ in '€œprofit'€ that global investors associated with.

Four years after the phrase '€œBRIC'€, the boys at Goldman Sachs were at it again, expanding their watch list using the term '€œNext 11'€ (N-11). Here, Indonesia solidified its position among investor confidence as it was identified along with Bangladesh, Egypt, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey and Vietnam, as countries that would be the century'€™s next major economies. In 2008, Robert Ward of the Economist Intelligence Unit introduced '€œCIVETS'€ to match the N-11 emerging economies.

The term, which grouped Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa as attractive areas for investment, caught on, with both Standard & Poor'€™s and HSBC actively using CIVETS as a description for a fund or an investment index watch.

A couple of years later, Citibank'€™s Willem Buiter formulated a development model to predict countries he termed to be '€œGlobal Growth Generators'€ ( 3G ) in the next four decades.

It included India and China yet omitted Brazil and Russia from the 11 global growth generators. The other 3G countries are: Bangladesh, Egypt, Indonesia, Iraq, Mongolia, Nigeria, the Philippines, Sri Lanka and Vietnam.

In 2011, Fidelity International marketed the term '€œMINT'€ as the latest fad in investment circles '€” a high concentrate of the N-11 and CIVETS formulas, condensed into four countries with the most potential: Mexico, Indonesia, Nigeria and Turkey.

Indonesians should take heart from the confidence of the caliber of the economists above, which has placed the country on a pedestal. And within Indonesians there should be a belief that this nation can be greater than what it is.

Perhaps the biggest cheerleader of Indonesia'€™s rise in this alphabet soup has been the government itself, which uses it as an advert for success.

Maybe it does take an outsider to see how we truly are, yet it seems suspect to be talking about paradise before ever reaching Shangri-La.

Let us not forget, despite the weight of research and intellect behind them, these catchy phrases were largely marketing ploys, presentational tools to ease investors into parting with their money in lands they were unaccustomed to.

Hyped by a global media in an interconnected world, where copy-paste information is quickly viral, propaganda and advertising become statements of fact.

It is the '€œbig lie'€ modus we learned from the dark days of fascism and authoritarianism: '€œIf you tell a big enough lie and tell it frequently enough, it will be believed.'€

It is not that we should doubt our country, but addressing doubts and self-criticism fortify our faith.

The most glaring criticism of Indonesia'€™s ability to become a major economy is its failure to prepare the young.

Indonesia'€™s demographics show that its productive population is much higher than its dependent one. But to reap this dividend it has to ensure it has an educated and skilled population.

For now, there is little indication of improvement. Indonesia consistently remains in the lowest tier of various educational tables.

In the 2013 Universitas 21 global rankings, Indonesia was last in a list of 50 countries.

The Organization for Economic Cooperation and Development'€™s (OECD) Program for International Student Assessment (PISA) 2012 tests also placed Indonesian students second to last among 65 countries for math, science and reading '€” far below average students from Costa Rica, Albania, Tunisia and Colombia.

Does this look like a country ready to embrace a competitive future?

The problem is not the classic excuse of resources per se. At least 20 percent of its state budget is already allocated for education. It is more a case of mismanagement, bad planning and lack of prioritizing.

There is little emphasis on English, the lingua franca of business and academia, and limited focus on science.

The bulk of the money goes to teachers'€™ salaries, but paying more money to people who are not that qualified to begin with will not improve our education.

The failure to invest in our future is highlighted by the Boston Consulting Group in a report earlier this year warning of a looming talent shortage.

By 2020, top companies in Indonesia will only be able to fill about half of their entry-level jobs with fully qualified candidates. Indonesia already faces a shortage of middle managers, but by 2020, the gap between supply and demand will reach as high as 56 percent, the report said.

Another major impediment awaiting Indonesia is the distribution of growth.

It is a long held concern stemming from the early days of the republic and has been repeatedly addressed by successive administrations, including pledges by the current one, but there is scant evidence that the trend has been reversed.

Java and Sumatra dominate development. The two major islands contribute up to 80 percent of gross domestic product (GDP), with Java home to over 50 percent of the economy.

Middle-income and affluent consumers may well be growing, but the realization of these two facts leads us not to a bright future of Indonesia as an engine of growth, but to one in which disparities and ultimately social unrest are on the horizon.

This should be the nation'€™s focus in the coming years, not letters that form nifty acronyms.

The writer is chief editor of The Jakarta Post.

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