Indonesia is likely to be a major player in the ASEAN Economic Community (AEC) in 2015, a think tank chief said at Julius Baer's inaugural Next Generation Summit in Asia in Nusa Dua, Bali, on Friday.
Simon Tay, chairman of the Singapore Institute of International Affairs, predicted that Indonesia - as it had the biggest population in the region - would be strong in the face of the AEC.
"Indonesia is about 40 per cent of the ASEAN economy. For AEC, Indonesia is really strong," Tay said, adding that the management of its financial institutions would determine the country's position among the other ASEAN countries.
"The leadership of the central bank as well as the Finance Ministry will be crucial. However, I am quite confident that Indonesia will be okay," he said.
There are currently 10 ASEAN member countries representing a population of over 600-million people. In 2015, ASEAN is set to launch the AEC, a unified market for its members, to enhance not only the group's collective marketing might, but also the individual competitiveness of its members.
The groundwork for AEC was laid at the 13th ASEAN Summit in November 2007, with the AEC Blueprint unveiling its objectives: the formation of a common market and production base is complemented by innovative approaches to economic development. The recent progress report on ASEAN's readiness to meet the AEC mandate has been a welcome development. A substantial amount of the measures outlined in the AEC have already been accomplished.
In terms of per capita income, ASEAN has seen this rise to US$3,759 in 2012 from $2,267, since the blueprint was approved in November 2007.
Despite period of massive volatility in the global economy over the past decade, the Indonesian economy has displayed remarkable resilience and it is one of the ASEAN countries with positive economic development, Julius Baer research revealed.
During the period of 2001-2012, the average gross domestic product of 5.4 per cent came with low growth volatility.
"The preceding chapter on policy innovation and ASEAN 2015 broadly covers the framework of the union, which should unleash a new age of growth in Southeast Asia.
Indonesia stands out in this regard for several reasons. As ASEAN 2015 breaks down barriers, one of the key beneficiaries, in our view, of these new economic freedoms will be Indonesia. This is because Indonesia's enormous potential has as yet gone untapped, despite recent growth, which is in itself also impressive," the research report states.
Boris FJ Collardi, Julius Baer Group CEO, said the high population was important, but, the presidential election next year would be an important step to "determine what will happen in the region".
Julius Baer's inaugural Next Generation Summit in Asia also discussed the outlook for China and Asia in general and an impressive line-up of international speakers was presented exclusively to 200 of the bank's guests.
Nobel Prize winning economist Paul Krugman presented the keynote. He presented his view on the future of the global economy and the role that Asia will play within this context. The professor was elaborating on new ways to tackle shared challenges.
Another speaker was Tony Fernandes, AirAsia Group CEO, who spoke about the innovative strategy behind his company's success. Gerhard Schmitt, director of Singapore ETH-Centre, spoke about developing sustainable cities in Asia in a video specially created for the summit.
Liang Xinjun, Fuson Group vice chairman and CEO, demonstrated how Fuson International Ltd. was making global brands more relevant to the growing market of Chinese consumers. Ronnie Chan, Hang Lung Properties chairman gave an animated speech on the undeniable opportunity of China presents in term of growth opportunities.
In a key ASEAN panel led by Mark Matthews, head of Julius Baer Asia research, it was highlighted that unity is the key ingredient of the ASEAN's future success.
A "Global Innovators" panel discussed what it means to be global innovator together with David Yu, Yunfeng Capital founder and chairman, and Samih Sawiris, Orascom development executive chairman. Meanwhile DMG Entertainment founder Dan Mintz led a sizzling presentation that painted an image of Asian dominance within the Hollywood entertainment industry.
"The next generation series keeps our guests in touch with the big themes guiding investment decisions. We look forward to establishing this conference as a 'must attend' regular annual event," Collardi said.