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Indonesia’s economy, along with its related ETF, has been one of the top performers this year as the country maintained its self-reliance as it coped with the global recession.

How did Indonesia do it?

  • Unlike many other Asian countries, Indonesia’s economy was not fettered by the dip in global export demand.
  • James Lord, economist at Capital Economics Ltd., sees that the current President’s cabinet includes a team of economists that are “pro-reform technocrats” who will deliver the needed reforms to hit a 7% growth target. President Yudhoyono is trying to expedite infrastructure projects and he has pledged to curb abuses of power in the country.

U.S. Treasury Secretary Timothy Geithner, Indonesian finance minister Sri Mulyani Indrawati and Singaporean finance minister Tharman Shanmugaratnam called for flexible global exchange rates, stating that “market-oriented exchange rates in line with economic fundamentals will be essential in assuring the resource and sectoral shifts to match and foster the new patterns of demand,” according to The Wall Street Journal. The ministers also urged countries to focus more on sustaining private demand growth as fiscal measures are lifted.

  • Market Vectors Indonesia ETF (NYSEArca: IDX): up 170.9% since the market low

ETF IDX

Max Chen contributed to this article.

Source: Why Indonesia and Its ETF Are Emerging Market Leaders