What we can learn from Indonesia

An Indonesian I met on the street asked me curiously where I came from. "Kenya!" I answered proudly. "Is that Africa?" he asked. "Yes," I said with a grin hoping he had figured out where Kenya was on the map. Then he asked rather sheepishly: "Is Kenya in Mogadishu," my heart sunk. Mogadishu seems better known than Nairobi at least by my newly found acquaintance. With two other Kenyans, we visited Indonesia's capital last week to learn what drives the economy of one of East Asia Pacific's economic powerhouses.

Indonesia ranks 50th in the World Economic Forum's Global Competitiveness Index; its economy worth $888.5 billion according to World Bank, is already the 16th largest in the world. Some economists argue that it could pass Germany and the United Kingdom to become the 7th largest economy by 2030. In 2016, the World Bank forecasts that Indonesia's economy will grow by 5.3 per cent; life expectancy in 2014 was 69 years; it has a GNI index of $3,630 and primary school enrolment rate of 106 per cent. It is rated as one of the world's emerging economies; it is a member of the G-20 major economies. Some of its major exports include oil and gas, cement, food, textiles and rubber.

Yet by any standard, Indonesia is still a developing country when internationally acceptable indicators are used to determine the quality of life across the whole archipelago. Over 50 per cent of the people survive on less than two dollars a day. With 254 million souls packed into more than 13,000 islands, infrastructural challenges remain one of the main spoilers of Indonesia's economic bonanza.

The Jakarta metropolitan area alone has a population almost the size of Kenya's. In planning, Indonesia's capital would put to shame our Nairobi city. The skyline of the city is no different from any of the major world metropolis like London, New York or Toronto. There are more than 2,000 gigantic departmental stores. One of my travelling partner quipped. "We should never call our malls, by that name any more. They are not," she said comparing Nairobi's shopping malls to the big malls in Jakarta.

The consumer appetite can be seen from how multitudes of people throng the shopping malls ready to spend. One single mall we visited in central Jakarta had more retail outlets than the whole of Nairobi's Westlands.

Yet despite the rosy picture, Indonesia has challenges like Kenya that hobbles its economic growth. News in the local media feature rampant corruption and threats of radicalism from extremist groups. Traffic congestion is a problem and just like Nairobi, noise and environmental pollution remains a huge challenge. The country also exports most of its raw materials unprocessed denying it benefits from value addition. But the potential outweighs the weakness. Indonesia's population is mostly young people. This is for most investors an attraction because of the access to a large market twice the size of the whole of the East African Community.