JAKARTA - Indonesia has an inner resilience that has seen it weather the Asian financial crisis of 1997-98, the 2008 global recession and other smaller economic mishaps, but what it needs to keep growing is more openness to the world, said Mr Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public policy at the ongoing World Economic Forum on East Asia.
"The inner resilience will carry Indonesia forward but the danger is it could become complacent," Mr Mahbubani said at a session looking at the prospects ahead for Indonesia on Monday. He was asked whether democracy would be enough to ensure Indonesia's continued success.
A presidential election last year saw the first peaceful transfer of power in Indonesia, from its first elected president Susilo Bambang Yudhoyono to the current President Joko Widodo.
The lessons from the world's largest democracies like India and Brazil is that democracy is not enough, Mr Mahbubani said. India had to U-turn away from Nehruvian socialism and Brazil, "the land of tomorrow'', has not yet realised its potential, perhaps because of its reliance on its large domestic market, he added.
"Democracy is not enough, open up the economy and engage the world," Mr Mahbubani said before an audience of over 100.
By 2017, Indonesia is expected to become Asia's next trillion dollar economy, after China, Japan, India, Australia and South Korea, according to a projection by IHS economist Rajiv Biswas. But Indonesia's growth rate has markedly slowed down from 6.5 per cent a few years ago. It is forecast at 5.1 per cent this year and to rise to 5.4 per cent next year.
Foreign investors as well as Indonesia's own domestic businesses are looking to Mr Joko to create a better business environment. Indonesia ranks low, at 114 out of 189 countries, in the World Bank's Ease of Doing Business index. The country needs more foreign investment to create jobs, it is estimated that some 2.4 million people will join Indonesia's working age population every year over the next decade.
Other speakers at the session were the chairman of the Boston Consulting Group, Mr Hans-Paul Buerkner, Bank Mandiri CEO Budi Gunadi Sadikin, Mr Marsudi Syuhud, the General Secretary of Indonesia's moderate Muslim organisation Nahdlatul Ulama and Ms Amanda Putri Witdarmono, founder of We the Teachers, Indonesia.