Which will grow faster: India or Indonesia?
Both countries are pioneering new ways to get rich in a troubled world
Mar 29th 2023
If You are looking for growth opportunities among the world’s 20 biggest economies, two stand out: India and Indonesia. The Asian giants, with a combined population of 1.7bn, are forecast by the imf to be the two fastest-growing top-20 economies in 2023, and over the next five years. Both are pioneering strategies for getting richer in an era of de-globalisation, fraught geopolitics, automation and energy shifts, even as they seek a political formula that wins elections and avoids social unrest. Whether they succeed matters not just for their people and the investors betting many billions of dollars on them. It will also set an example for scores of other countries searching for new and reliable ways to develop in the 2020s and beyond.
For decades developing countries have followed a trusted formula for growing wealthier. Move workers from fields to more productive manufacturing jobs in cities, have them make goods for export, and watch the rapid formalisation of the economy. It worked in South Korea and Taiwan. In China it saw 800m people escape poverty. But today this scheme no longer works well. Many countries are rowdy democracies, not authoritarian states (as South Korea and Taiwan were when they industrialised). Protectionism challenges export-led growth. Factories use more robots.
At first glance, India and Indonesia have much in common. Both are led by charismatic leaders first elected in 2014, and both will hold elections next year. Narendra Modi, India’s prime minister, and Joko Widodo (widely known as Jokowi), Indonesia’s president, cut their teeth in local politics and have a reputation for getting things done. They run vast (India has 1.4bn people and Indonesia 280m) and relatively young countries with myriad ethnicities and languages.
Which will grow faster: India or Indonesia?
Both countries are pioneering new ways to get rich in a troubled worldwww.economist.com
Indonesia is in a sweet spot with much more natural resources on a per captia basis. Indonesia must really screw up badly to fall behind India. Or India has to put on a sizzling show for decades to put Indonesia behind for good