Indonesia – the next economic powerhouse.

Jakarta,the childhood hometown of US President Barack Obama is the capital city of Indonesia.
Indonesia is no longer a developing economy dependent largely on agriculture and mining. Politically and economically, it has been transformed since the end of the Asian financial crisis in 1999.
Indonesia is on a very strong and progressive path, especially in the last two to three years which is in a similar situation as China was 10 years ago, when the vast Chinese population moved beyond the subsistence level and consumption power was increasing with accumulated wealth as the economy grew at a fast pace.
Today, Indonesia may already be on the cusp of such a transition.
(photo of Indonesia Stock Exchange---Bursa Efek Indonesia also called)
We know Indonesia has the basic ingredients for success, among which are:
1) .The fourth largest population in the world at 226 million – which also means a big domestic consumer base;
2) ·Huge natural resources – Indonesia is the largest producer of palm oil in the world and is a major producer of crude oil, natural gas, iron ore, tin, lead, gold, etc.; and
3) ·Young urban population – 50% of Indonesians live in urban areas (a rate higher than in China or India) and more than 52% of the population is aged 20-54. Dynamic young urban population’s productivity growth would be at a faster pace with the right economic environment.
There are compelling reasons to believe that with the right catalysts, Indonesia may grow as fast as China or faster in the years ahead.
Among the key catalysts for Indonesia to emerge as an economic star in the global economy are:
4) ·Leadership in Jakarta continues to provide political stability and sound economic policies: President Susilo Bambang Yudhoyono did a good job steering the economy in his first term and he was re-elected with a strong 60% of the popular vote for another five-year term on July 8.
The current leadership team has a good track record and credentials in managing the economy; that includes the Vice President-elect Boediono, who was Finance Minister and Central Bank governor before, and the current Finance Minister Sri Mulyani Indrawati, both of whom are well respected technocrats.
5) ·Infrastructure development: Indonesia has a pressing need for great infrastructure like many developing nations.
The mega infrastructure proposed during the first term of Yudhoyono’s presidency did not take off well, but with Yudhoyono now having greater control over the parliament, this is likely to change.
In response to the economic downturn, Indonesia set aside US$7.5bil in the 2009 budget for infrastructure spending and an additional US$703mil for labour intensive infrastructure projects.
Infrastructure development will help spur economic growth, improve efficiency in Indonesia, much like how such investments boosted the economies of Malaysia in the 1990s and China in 2000s.
6) ·Banking system reform continues to provide the lifeblood for the economy to grow: The banking system underwent drastic reform after the Asian financial crisis with the Indonesia Bank Restructuring Agency, resulting in the demise of insolvent banks and ownership changes in major private banks.
The recapitalisation and reform resulted in one of the most liberalised banking systems in Asia, with little restrictions on foreign ownership.
The banking reform also fostered healthy competition and that in turn has benefited many Indonesian companies and consumers alike.
In Indonesia, the household debt to gross domestic product ratio is 11.2, one of the lowest in the region when compared with Taiwan (53.8), Hong Kong (53.2) or Malaysia (46.7).
This means that consumers not only have room to borrow for large purchases such as cars and homes, but banks also have huge opportunities to sell their loans to Indonesian households.
Ten years ago, banks preferred to lend to big corporations and the average Indonesian would have difficulty getting consumer financing, plus they would have had to pay interest rates in excess of 20% a year.
Today, Indonesian banks are actively courting consumers to borrow from them.
Recent events have proved that Indonesia has not only the economic resilience but also the confidence to be a major economic powerhouse in the future.
Indonesia is moving in the right direction to be a formidable global economic powerhouse.
The rest of Asia should view the emergence of Indonesia not as a threat, but as a motivation for healthy competition.
Just like the emergence of China, which helped advance the economies of North Asia such as Taiwan, South Korea, Hong Kong and Macau in the past 20 years, I believe Indonesia’s economic growth in the next decade will do the same for South-East Asia.
My favourite Indon singer Broery Marantika sings WIDURI dan "Senja Di Kuala Lumpur" masih dalam ingatan saya.

Tracking the Dow on Monday,10/08/09.(14 market days to Dow Futures Expiry)
Nikkei 225 Futures Expire 3 more market days.

Asian market index futures expire 31/08/09.
9:30am:--Mild bullish start with 'san-ten' (3 white bulls.)

The overall direction this moring remains unclear as stocks gyrate during the first few minutes of trade.
10:30am:--A rebound to session high.

September crude oil is at $71.24 per barrel.This week's trading will most likely be directed by economic data since the vast majority of widely-held companies have already reported their quarterly results.

11:30am:--A pullback to session MAV with morning star and graveyard dojis warning.

As selling pressure picks up, Treasuries are garnering support.

12:30 noon:--After finding the morning high,the indicies has broken the MAV support line with hangman and bearish dojis completely filling up the opening bull gap.

The decline is broad-based, though, as nine of the 10 major sectors move lower.Losses are steepest among materials stocks.

1:30pm:--A new session low with dragonfly doji.

Energy stocks are bucking the negative tone and are sporting a modest 0.2% gain, even though oil prices have slipped to a 0.4% loss at $70.65 per barrel.

2:30pm:--The low of the day been found as the morning star was seen.

The absence of market-moving earnings announcements and economic data has left participants without any trading cues this session.

3:30pm:--A retracement to the MAV resistance line with a morning star again in action.

While the broader market has spent all day contending with selling pressure, McDonald's (MCD 56.22, +1.02) is providing support to the Dow.

4:00pm:--The bulls have penetrated the MAV resistance after lighting up the uppper shadow.

A technical rebound to follow.

The bearish hammer on Monday was held within last Friday's body closing above its half body.A sign of profit-taking only,not of a panic selling.
It also didn't fully covered it.

Friday's upper shadow has not been lighted yet so we are expecting it soon possibly after Wednesday's FOMC rate decision and policy statement.
For the month of July,the Dow moved within a range of 1,200 points.As at August todate the range is 264 points with an unshaven bottom candlestick.There might be chances it need to find a lower tail.