OUTLOOK FOR 2022
Dusting off the crystal ball is always a daunting task; sometimes you just want to smash it, given the unpredictability of predicting. Here then, is my modest assessment of 2021 and outlook for 2022. Consider them notes and comments. I will leave the deeper analysis to those working on longer time frames.
2021 saw Indonesia return to growth (mostly through government spending and higher commodity prices) weather the mid-year Delta variant surge with modest success, significantly move the needle on vaccination, improve its fiscal position and balance of payments, and diplomatically focus its central role within ASEAN and the Indo-Pacific region. Businesses saw a surge in shipping rates to 3 or 4 times normal, especially coming from Asia. Indonesia, being more of an exporter or primary and intermediate goods, rather than consumer products, withstood the disruption.
in 2021 Indonesia also experienced a strong degree of fiscal and political consolidation over the year with Finance Minister Sri Mulyani and Central Bank Governor Perry Warjiyo exerting discipline over the currency and the budget. Meanwhile, President Jokowi continued to build out his governing coalition.
Moving into 2022 questions remain over the impact of higher inflation, Omicron, constitutional challenges to its landmark Jobs Creation Bill, the direction of its natural resources policies, frequency of natural disasters, what type of security stance it will take regarding China’s incursions into its territorial waters, and finally, the impact of the politics surrounding the 2024 national elections on President Jokowi’s ability to further his agenda.
But if 2021 improved over 2020, 2022 will be even better. Indonesia will host the G20, logistics should return to a semblance of normalcy and the digital economy–enervated by its role in solving problems ranging from oxygen distribution to home delivery of essential items–will help the consumer economy, key to the nation’s future prosperity, build back better.
If Bapak Omicron allows –and he has no cousins—we will soon be back traveling regularly to Indonesia and curtailing our insane numbers of Zoom calls.