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Will a partnership with the U.S. help Indonesia’s vibrant economy?

Guy De Launey Nov 8, 2010
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Will a partnership with the U.S. help Indonesia’s vibrant economy?

Guy De Launey Nov 8, 2010
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TEXT OF STORY

JEREMY HOBSON: After he leaves India, President Obama will head to a place he lived as a child. The President spent four years in Indonesia when he was growing up, now he’ll be spending less than 24 hours in a country with one of Asia’s most vibrant economies.

The BBC’s Guy De Launey reports from the capital Jakarta.

GUY DE LAUNEY: Along with China and India, Indonesia was among the few members of the G20 to avoid recession during the global financial crisis. Now it’s is getting ready to sign a Comprehensive Partnership Agreement with the U.S. But analysts are skeptical whether this wide-ranging tie-up will bring any benefit to Indonesia.

Professor Azyumardi Azra of Jakarta’s State Islamic University is one of the doubters.

AZYUMARDI AZRA: American investment in Indonesia is very low but I think it’s difficult for Indonesians to expect the so called comprehensive partnership agreement would be implemented in a full swing because of the problems in the American economy, political problems, and domestic political problems in the U.S.

Domestic demand is what’s been driving the Indonesian economy forward. Strong exports of everything from garments to gas have played their part — and the stock market has been booming. But U.S. firms have been losing out in Indonesia to Asian rivals. A big order for Boeing planes from a local low-cost airline comes as some consolation. But the Obama administration has put Indonesia at the top of its list of six countries where the U.S. could — and should — do better.

In Jakarta, I’m the BBC’s Guy De Launey for Marketplace.

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