How did Indonesia create the miracle?

 

Comment l’Indonésie a-t-elle créé le miracle ?

 

As the world today evokes the "Asian Century," Indonesia has become one of its most prominent symbols.

A country spanning more than 17,000 islands, Indonesia was perceived for decades as a developing nation, burdened by corruption and divisions. In two decades, it has become an emerging economic power within the G20 and one of Asia's most dynamic markets.

 

Indonesia's rise is no accident. Rather, it is the result of profound reforms and a strategic vision aimed at transforming its geographic and demographic diversity into strength.

 

How did Jakarta successfully transition from a fragile, commodity-dependent economy to a diversified one, a leader in digital technology and green energy? What internal and external factors enabled these scattered islands to transform into an integrated global market?

 

The Beginnings of Growth

Since its independence in 1945, Indonesia has suffered from serious structural problems, such as administrative corruption, weak infrastructure, wealth disparities between the main islands (Java, Sumatra, and Bali) and remote regions, and an overdependence on the export of raw materials such as oil, coal, and palm oil.

 

Under the Suharto era (1966–1998), the regime focused on top-down growth, relying on natural resources and foreign investment. However, corruption and cronyism hampered productivity, and the 1997 Asian financial crisis exposed the fragility of the economic structure.

 

The fall of Suharto marked the beginning of a historic turning point: the country moved toward political openness, opted for a decentralized system, and adopted economic reforms that made the Indonesian economy more transparent and competitive.

 

Beginning in 2000, Indonesia embarked on a structural transformation, deepening economic and financial reforms, with a focus on economic liberalization, investment facilitation, revenue diversification, improved governance, and combating corruption.

 

After decades of stifling centralization, Indonesia adopted the Village Law in 2014, which decentralized resources and decision-making to local communities. Approximately 10% of the national budget was allocated in the form of direct grants deposited into village accounts, with the funds being spent locally on road networks, productive projects, and social services.

 

This law gave rise to the Village Financing Policy (Dana Desa), which transformed the country's development. Between 2015 and 2024, more than 600 trillion rupiah was injected into villages, benefiting over 80,000 of them.

 

In less than a decade, more than 260,000 kilometers of rural roads and thousands of bridges were built, and the number of rural poor was reduced by 2.6 million. The village was no longer a unit subordinate to the capital, but an independent decision-making center, with its own budget and its own voice.

 

These indicators created a new climate conducive to real, comprehensive development. Rather, they illustrated the characteristics of a profound economic transformation in Indonesia. The renaissance began in the village, not the palace, and villages became engines of production connected to the global market.

 

To implement all this, the Indonesian Investment Coordinating Board was created to simplify procedures for investors, and taxes were gradually reduced to attract multinationals. Laws were also amended to encourage public-private partnerships in the transport and energy sectors.

 

A key factor in the country's success was the transfer of budgetary and administrative powers from Jakarta to local governments. Despite the risks it presented, this measure accelerated the development of the regions and transformed remote and marginalized islands into new poles of growth.

 

Political reforms have also made Indonesia a relatively stable democracy in a turbulent environment. This has allowed it to reconcile its religious and ethnic diversity through a moderate constitution, while preserving a unified national identity based on the motto: "Unity in Diversity."

 

All of these reforms, which have been intensified, have undoubtedly contributed significantly to strengthening investor confidence and the country's renaissance.

Integrated Island Economy

Indonesia's transformation is unique in that it has not relied on a "monocentric" model, but rather on a networked island economy. Each island has its own unique strengths and characteristics that contribute to the country's development. Java has become an industrial and technological center, while Sumatra specializes in energy and agriculture, Kalimantan in mining and oil, Sulawesi in nickel and strategic minerals, and Bali excels in tourism and digital services. The number of visitors exceeded 16 million per year before the pandemic, with the ambition of reaching 25 million by 2030.

 

By connecting these islands through modern transportation networks and ports, Jakarta has created an integrated economic system, similar to an "internal supply chain" that feeds off each other, reducing dependence on external resources.

 

Indonesia is now the largest digital economy in Southeast Asia, with annual e-commerce volume exceeding $1 billion, thanks to local companies such as Tocopedia and Gojek Bukalapak. These companies have not only introduced the network economy model to the local market but also created millions of jobs for young talent.

 

In manufacturing, Indonesia no longer simply exports its raw materials; it now manufactures them locally. It is now the world's leading producer of nickel, a key component of electric vehicle batteries, and is seeking to build an integrated production chain, from mining to manufacturing, in collaboration with South Korea and China. Indonesia is investing to become a global hub for battery production and clean energy.

 

All this has contributed to making Indonesia a global market, not only due to its geographical location or population (over 280 million), but also thanks to the adoption of a new philosophy. Indonesian companies not only meet domestic demand but also export to Asia, Europe, and Africa.

 

Jakarta has also become a regional financial center thanks to banking reforms and the launch of the "digital rupiah" project to promote electronic payments.

 

The country has also made investment in human capital a pillar of its growth. It has established technical universities and training centers in all regions. To meet the needs of the industrial market, the "1,000 National Engineers per Year" initiative was launched with the support of the private sector.

 

Foreign Policy: Neutrality and Efficiency

Indonesia has adopted a foreign policy based on "effective independence," maintaining its neutrality from major powers while maximizing its gains. A trading partner of China, a major investor in the United States, an active member of ASEAN (Association of Southeast Asian Nations), and a member of the G20, Indonesia is a member of the G20.

 

This balance has allowed it to attract investment without fully aligning itself with any one axis. It has also played an important role in defending the interests of developing countries within the World Trade Organization, thus strengthening its international position.

 

Tourism and the Vulnerability of the Poor

Tourism has increased income on islands like Bali, but it has also created a fragile and foreign-dependent economy and led to significant social disintegration. Behind the luxury resorts lies a class of poor workers who work in the tourism industry for low wages.

 

Indonesia and the Battle for Independence

In the 1990s, the Indonesian currency collapsed, and Western financial institutions imposed austerity measures on the country, including privatizations, subsidy cuts, and the opening of the market to foreign companies. This measure temporarily devastated the economy and triggered unrest that ousted Suharto from power.

Mais cette amère expérience a laissé une leçon profonde : la véritable indépendance ne réside pas dans la simple exaltation des symboles souverains, mais dans la capacité à tracer une voie économique sans se soumettre aux diktats occidentaux.

 

Aujourd'hui encore, les entreprises occidentales continuent de tenter de dominer les richesses des îles, des mines de nickel et de cobalt aux palmiers produisant du pétrole alimentant les usines européennes.

 

Cependant, le gouvernement mène d'âpres négociations pour transformer ces ressources en valeur locale. L'exportation de nickel brut a été interrompue en 2020, et les entreprises ont été contraintes de construire des usines dans le pays. En conséquence, les revenus du secteur ont doublé et Jakarta a commencé à imposer ses conditions au monde entier.

 

En conclusion,

le succès de l'Indonésie n'est pas dû au hasard. Il s'agit plutôt d'une décision consciente selon laquelle le véritable développement part de la base et que la libération ne se mesure pas uniquement par l'indépendance politique, mais aussi par l'indépendance de pensée, de finance et de production.

 

Le pays a réussi à transformer sa géographie fragmentée en un réseau économique cohérent reliant l'Asie, l'Océanie, le monde arabe et l'Afrique.

 

Si l'Indonésie suit la même voie de réforme, elle pourrait se hisser d'ici deux décennies parmi les dix premières économies mondiales. C'est l'histoire d'un pays qui nous a appris que la situation géographique ne détermine pas le destin, mais plutôt la vision, la volonté et la capacité à transformer les frontières naturelles en passerelles d'opportunités.

 

Lorsque les villages possèdent leurs propres ressources, ils créent leurs propres solutions et participent à façonner leur propre destin, et le développement devient organique, et non superficiel.

But this bitter experience left a profound lesson: true independence lies not in the simple exaltation of sovereign symbols, but in the ability to chart an economic course without submitting to Western dictates.

 

Even today, Western companies continue to attempt to dominate the islands' riches, from nickel and cobalt mines to palm trees producing oil that fuels European factories.

 

However, the government is conducting tough negotiations to transform these resources into local value. The export of raw nickel was halted in 2020, and companies were forced to build factories in the country. As a result, revenues from the sector doubled, and Jakarta began to impose its terms on the world.

 

In conclusion,

Indonesia's success is no accident. Rather, it is a conscious decision that true development starts from the bottom up and that liberation is measured not only by political independence, but also by independence of thought, finance, and production.

 

The country has successfully transformed its fragmented geography into a coherent economic network connecting Asia, Oceania, the Arab world, and Africa.

 

If Indonesia follows the same path of reform, it could become one of the world's top ten economies within two decades. This is the story of a country that has taught us that location does not determine destiny, but rather vision, will, and the ability to transform natural boundaries into gateways of opportunity.

 

When villages own their own resources, they create their own solutions and help shape their own destiny, and development becomes organic, not superficial.

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