Indonesia the hottest draw for investors

India, with its slowing economy, surrenders limelight to Indonesia

 
China's reception had a strong turnout, with food by Dalian chefs. -- PHOTO: AGENCE FRANCE-PRESSE

DAVOS - Going by the attention it is getting, the Asian nation having its best run at Davos this year is perhaps Indonesia, thanks to its economic resilience and rising attraction as an investment destination.

The country is on investors' radars for two reasons: First, as Asean economic integration progresses, it is only natural for global companies to look at Indonesia, the No. 1 regional economy and biggest market. Second, the Japanese, particularly, are looking to spread boardroom risk and that, in the current context, means not putting all their eggs in the Chinese basket when it comes to manufacturing everything from shoes to electronics.

India would have been a natural beneficiary of this trend, except that its economy is slowing and it is unable to cut interest rates for fear of stoking inflation. Besides, these past two years have seen too much negative news out of New Delhi, where the headlines have been about government corruption and policy paralysis.

Indeed, the India session on Thursday evening was poorly attended, in part because it clashed with a plenary featuring United Nations boss Ban Ki Moon, British Prime Minister David Cameron, Mr Bill Gates and the fetching Queen Rania Abdullah of Jordan.

That is a huge comedown for Asia's third-largest economy, which used to dominate Davos with its strong presence and 'Incredible India' motto.

The Indians, with a delegation of some 110 members, are still the largest Asian contingent this week. But it is clear that they have lost the bragging rights to the label of 'fastest-growing economy among world democracies'.

The Chinese show up at Davos, but do not give it particular weight. That is because their focus is on the Summer Davos, held alternatively in the Chinese cities of Dalian and Tianjin, which draws a bigger crowd than the Swiss mountain resort in January.

One notable feature about the Chinese officials and academicians here this year was their growing ease with the English language, sometimes even using idiomatic English. Another noteworthy feature was a willingness to discuss China's warts, whether the alarming pollution levels around the country, or the stranglehold on the economy enjoyed by state-owned enterprises. Even more surprising, they often displayed a sense of humour and an ability to poke fun at themselves.

Clearly, China is changing.

The Japanese have a strong presence from industry, while this year, Malaysia produced no less than Prime Minister Najib Razak.

Datuk Seri Najib, accompanied by Minister for International Trade and Industry Mustapa Mohamed, is to be interviewed publicly. India has sent four ministers, each of them highly articulate.

But if the Indians have surrendered their swagger, it is the Indonesians, with their Remarkable Indonesia campaign, who have grabbed it. This was evident as several Asian nations held receptions on Thursday evening.

The Chinese had theirs at the main Congress Centre, ensuring a strong turnout as people exited the plenary session involving Mr Cameron and Mr Gates to try the dim sum and fried rice prepared by chefs flown in from Dalian.

Elsewhere, around Davos' icefilled Promenade, the Japanese and South Koreans had their gala evenings as well.

But the strongest turnout was at the Indonesian reception, which dozens of people chose to make their last call after showing up briefly at other receptions.

Trade Minister Gita Wirjawan hosted the event with Indonesia Investment Coordinating Board chairman Chatib Basri. Mr Gita's predecessor in office, Ms Mari Pangestu, was there as well.

As well as to talk about tourism, her current portfolio, Ms Pangestu is in Davos for another reason - to lobby for her candidacy to replace World Trade Organisation (WTO) director-general Pascal Lamy, who is retiring. The Doha Round of trade talks, pushed by Mr Lamy, has gone nowhere.

Yet, Ms Pangestu has eight rivals for the WTO job, all of whom believe they can do better. And most have descended on Davos to lobby.

She seemed relaxed about the competition, which includes New Zealand Trade Minister Tim Groser who, with Singapore's Mr George Yeo, is credited with immense contributions in designing the Trans-Pacific Partnership.

'Lim Hng Kiang has assured me of Singapore's support,' she told me, referring to the Republic's Trade and Industry Minister. 'And Singapore is an important voice in trade.'

velloor@sph.com.sg

Background story

MUTUAL DEPENDENCE

There is a realisation between Lee Hsien Loong and myself that we have to put the past behind us. The future of Malaysia and Singapore are inextricably linked. Iskandar, for example, is hugely dependent on Singapore, just as Singapore is dependent on Malaysia - they need the space and costs are going up in Singapore. I told him, you can be Manhattan but I could be New Jersey.

- Malaysian Prime Minister Najib Razak in a televised conversation with CNN's Fareed Zakaria on the sidelines of the forum in Davos