Indonesian economy
Indonesia has played a modest role in the world economy since the mid-20th century, and its importance has been considerably less than its size, resources, and geographic position would seem to warrant. The country is a major exporter of crude petroleum and natural gas. In addition, Indonesia is one of the world’s main suppliers of rubber, coffee, cocoa, and palm oil; it also produces a wide range of other commodities, such as sugar, tea, tobacco, copra, and spices (e.g., cloves). Nearly all commodity production comes from large estates. Widespread exploration for deposits of oil and other minerals has resulted in a number of large-scale projects that have contributed substantially to general development funds.
Although Indonesia has remained a major importer of manufactured goods, high technology, and technical skills since the early 1970s, the country’s economic base has shifted from the primary sector to secondary and tertiary industries—manufacturing, trade, and services. Manufacturing surpassed agriculture in terms of contribution to gross domestic product (GDP) in the early 1990s and has continued to be the largest single component of the country’s economy. A significant portion of the national budget has continued to be allocated to agriculture, however; consequently, the country has remained self-sufficient in rice production since the mid-1980s.
During the early years of Indonesia’s independence, economic mismanagement and the subordination of development to political ideals under the “Guided Economy” policy of the country’s first president, Sukarno (1949–66), led to financial chaos and to a serious deterioration in the capital stock. With a major change of economic direction after Suharto assumed power in the mid-1960s, some measure of stability was regained, and the conditions for an orderly policy of rehabilitation and economic development were established.
China slides open economic and diplomatic doors
Since the introduction of visa exemptions in late 2023, foreign tourist arrivals in China have surged. China’s visa-free policies include mutual exemptions, unilateral waivers to select nations and a 144-hour visa-free transit policy. These policies not only reduce time and financial costs for travellers, but also enhance the perceived value of a stopover in China.
In the first seven months of 2024, 17.254 million foreign tourists visited the country, marking a staggering 129.9 percent increase compared to 2023. While these numbers are a positive indicator of China’s reopening and attractiveness as a destination, they also point to broader implications for China and the global community. The spike in inbound tourism could enhance diplomatic relations and foster mutual understanding in an increasingly polarised world.
Increased inbound tourism is a boon for China’s slowing economy. With the World Bank projecting China’s GDP growth at a modest 4.8 percent for 2024, the country faces the need for structural reforms to sustain its economic trajectory. Attracting international tourist spending on accommodations, dining, transportation and attractions provides a much-needed stimulus. This influx represents a net input into China’s economy, triggering a multiplier effect across the tourism supply chain while generating jobs, particularly for Chinese youth facing high unemployment.
UK businesses drive growth in India’s economy
British businesses continue to make a significant impact on India’s economic landscape, with 667 UK-owned companies generating ₹5 trillion in revenue and employing over 523,000 people, according to a report.
The Britain Meets India 2024 report, by Grant Thornton Bharat and the Confederation of Indian Industry (CII). highlights the growing footprint of UK businesses in India.
The report said 162 UK companies surpass an annual revenue of ₹50 crore and achieve at least 10 percent year-on-year growth. These firms span key sectors such as education, technology and infrastructure, supporting India’s long-term economic and sustainability goals.
India-UK trade has grown from $17.5 billion in fiscal year 2022 (FY22) to $20.36 billion in FY223.
As per the report, Maharashtra has emerged as a major hub for UK businesses, accounting for 36 percent of all British companies in India. Other key states for British investments are Delhi NCR, Karnataka and Tamil Nadu.
The report reveals that nearly 63 percent of UK firms in India are micro, small and medium enterprises, with business services, industrial products, media, telecom and technology sectors being the top contributors.
Pallavi Bakhru, partner and head of the India-UK Corridor at Grant Thornton Bharat, emphasized the growth potential for UK companies in India, particularly with the India-UK Free Trade Agreement on the horizon.
“We expect significant opportunities for UK companies, particularly in sectors like renewable energy and climate finance, as we work towards India’s net-zero goals by 2070,” Bakhru said.
By 2025 India poised to surpass Japan in GDP ranking
India’s gross domestic product could soon become larger than Japan’s, making it the world’s fourth-largest economy, according to a Japanese media report on Thursday.
“Based on our existing forecasts, we had expected India to overtake Japan in 2026. The forecasts are currently being reviewed in light of recent events,” the news item cited Thieliant as saying.
The International Monetary Fund sees the switch happening in 2025. S&P Global Ratings is looking at 2030 for the two countries to swap places, the article states.
According to economists, the factors that are working in India’s favour is that the country has steadily climbed in terms of economic potential since around 2000 and its GDP has already surpassed that of the UK in 2022. India now trades with 27 countries using its rupee instead of the dollar, highlighting its expanding influence in global trade. The country also accounts for 46 percent of global digital transactions. India’s population growth and young demographics are the key drivers to economic expansion that remains indisputable.
The IMF predicts India’s nominal GDP is projected to hit $4.339 trillion by 2025, surpassing Japan’s $4.310 trillion. This outlook underscores India’s strong growth trajectory, marking a significant lead over Japan.
Malaysia economy likely lost some steam in q3: reuters
Malaysia’s economic growth likely slowed but only modestly in the third quarter compared to a year earlier as solid private consumption and construction activity cushioned the impact of declining mining output, a Reuters poll of economists found.
The median prediction of 25 economists in the Nov. 6-12 poll showed the Southeast Asian economy grew 5.3 percent year-on-year in the July-September period, matching the advance estimate but down from 5.9 percent in the previous quarter.
Growth was largely driven by a robust expansion in the manufacturing, construction, and agriculture sectors.
“Malaysia will likely show resilient economic growth in Q3. The services sector likely experienced a robust, broad-based expansion, although at a slightly slower pace than in Q2. The manufacturing sector was bolstered by the electronics segment, benefitting from an ongoing global tech upcycle,” said Taimur Baig, chief economist at DBS Bank.
“The main drag to overall real GDP growth in Q3 2024 was from the contraction in the mining sector. The positive growth drivers are likely to sustain into 2025, and a favourable base effect in Q4 2024 should see real GDP growth recover to 5.3 percent for full-year 2024 from 3.6 percent in 2023.”
A separate Reuters poll published last month predicted Malaysia’s growth to average 4.7 percent next year, within Bank Negara Malaysia’s (BNM) 4.5-5.5 percent forecast.
However, a slowdown in global demand, especially from China – the country’s major trading partner – saw Malaysian exports contract in September, and could weigh on growth prospects.
U.S. President-elect Donald Trump’s plans to impose tariffs on imports from every country is also expected to slow the country’s exports.
“There are some key headwinds over the horizon. The most prominent risk being the potential for a blanket U.S. import tariff on the rest of the world. If implemented, it will substantially dampen global trade activity,” said Woon Khai Jhek, senior economist at RAM Ratings.
Strengthening Maldives-Pak ties
Dr Mohamed Waheed, a former president of the Maldives, recently visited Pakistan, actively engaging the academic forums. Drawing on his extensive experience in international development, public service and leadership, he shared valuable insights from his tenure as president, particularly on governance and socio-economic challenges. His participation highlighted his ongoing commitment to education and international collaboration.
As part of his academic engagements, Dr Mohamed Waheed met with a group of academicians and industry leaders at Al-Khidmat Foundation, where they had a candid discussion on a wide range of issues. The topics included the crisis in the Middle East, bilateral relations with Pakistan and the perception of Pakistan in various parts of the world, including the Maldives.
During his meetings with academics, Dr Waheed spoke candidly about the ongoing crisis in Gaza, delivering a stark message that stood in contrast to the symbolic rhetoric often used by leaders in the Islamic world. He argued that despite the rise of powers like China and Russia, the world remained unipolar under the US dominance. He highlighted the complicity of Western nations in fuelling regional conflicts, the political motivation behind Israeli genocide of Gazans and the deliberate displacement of Gazans.
Nepal PM picks Beijing over New Delhi for maiden visit
Nepal Prime Minister K.P. Sharma Oli is preparing for an official visit to China in early December, signalling his country’s interest in strengthening ties with its northern neighbour, with experts noting its potential to rebalance Kathmandu’s historically India-centric foreign policy.
Nepal’s newly appointed leaders traditionally make India their first foreign trip, however, Oli did not receive the invitation from New Delhi usually extended after the formation of a new government.
Oli formed a coalition government between his Communist Party of Nepal (Unified Marxist–Leninist) and the Nepali Congress in July after his predecessor Pushpa Kamal Dahal, known as Prachanda, lost a vote of confidence in parliament in July.
Nepal has not officially announced the prime minister’s visit from December 2 to 6, despite Beijing’s invitation. The deputy chairman of Oli’s party said during a meeting this week, the trip will “emphasise on implementing the high-level agreements” signed between the two countries and prioritising Nepal’s national interests.
Oli’s visit is being closely watched in New Delhi, though analysts say the trip is less about breaking traditions – Prachanda visited China before India in 2008 – and more about sending a signal to its southern neighbour.
While Nepal has closer ties with India historically and culturally, a notable shift occurred after India objected to the country’s new constitution and enforced an unofficial blockade in 2015, pushing Nepal to seek help from China for fuel.
Sri Lanka votes for new parliament
Sri Lanka began voting in a snap election on Thursday which will determine if the island nation wants to empower its new, leftist President Anura Kumara Dissanayake to push his pro-poor policies as it recovers from a financial meltdown.
A little over 17 million Sri Lankans are eligible to elect lawmakers to the 225-member parliament for a five-year term. A record 690 political parties and independent groups are in the fray across 22 electoral districts.
Marxist-leaning Dissanayake, 55, was elected president in September but his National People’s Power (NPP) coalition had just three of 225 seats in parliament, prompting him to dissolve the legislature almost a year before its term ended and seek a fresh mandate.
Over 7,000 police personnel have been deployed to ensure free and fair elections at the more than 13,400 polling stations set up across the country, police officers told Reuters.
“The military is also on standby to assist the police but we do not expect any incidents,” said Police Spokesman Nihal Thalduwa, adding that voting was proceeding smoothly.