Jakarta, capital of promise

The day starts early in Jakarta, with the call to prayer. It's barely five o'clock. The light is pale and powdery. The surreal chant of the muezzin rises against a backdrop of skyscrapers hiding a horizon of shantytowns. Jakarta is waking up, the capital and economic heart of an emerging country. "Indonesia accounts for both 40 % of the GDP and 40 % of the population of the Association of Southeast Asian Nations, ASEAN, which has its headquarters in Jakarta."says Jean-Philippe Arvert, Director of Ubifrance Indonesia. Considered one of the rising economic powers, the archipelago of nearly 17,000 islands spread over two million km2 found a new lease of life in the 2000s, after being hit hard by the crisis in South-East Asia in 1997-1998.

After thirty years of dictatorship under Suharto, which ended in 1998 against a backdrop of financial crisis, the country began its transition to democracy, regaining a degree of political stability with the first presidential election by direct universal suffrage in 2004 under Susilo Bambang Yudhoyono. Since then, the country has been back on track. Although still relatively unconcerned about exports - which only account for 25 % of its GDP, unlike other countries in the region where this rate can reach 70 % - the Indonesian Dragon has been able to cope with the economic slowdown linked to the 2008 crisis.

Sixteenth in the world

Today, the country is firmly asserting its ambition to be one of the world's top ten economies. This ambition is underpinned by its vast sub-soil wealth - gold, silver, coal, oil, minerals, natural gas and nickel. In real economic terms, Indonesia currently ranks sixteenth in the world. But there are already claims that by 2030, the country could become the world's seventh-largest power. In the meantime, the election last July of Joko Widodo, the former governor of Jakarta, as President of the country has opened up new prospects. His arrival in power has been welcomed by the business community and should have a positive impact on the country's development and stability. As a first step, the incoming president intends to tackle petrol price subsidies, which account for more than 15 % of the state budget. This could lead to a reduction in imports and provide greater room for manoeuvre in implementing a new economic policy.

On the strength of these prospects, Indonesia is attracting the attention of foreign visitors. "In recent years, the Indonesian market has become a real priority for France. It is also the only ASEAN country to be a member of the G20."adds Jean-Philippe Arvert. The French government is trying to open the doors to this new Eldorado: in July 2011, a bilateral agreement was signed between Indonesia and France to facilitate business relations.

Rubber and palm oil

This craze is logical when you consider that the largest economy in South-East Asia is the fastest-growing of the G-20 countries, just behind China. In addition to raw materials and natural resources, Indonesia also boasts an abundant agricultural sector, with the country being a major producer of rubber, sugar cane, rice, tea, coffee, tobacco, palm oil, coconuts and spices such as cinnamon. While the agricultural sector contributes more than 15 % of GDP and employs around 40 % of the working population, the industrial sector is also doing well, with the main products being textiles and footwear, cement, chemical fertilisers and electronic products. The tertiary sector, meanwhile, has developed strongly and now accounts for more than a third of GDP.

"In 2013, the country came close to 6 % of growth, and a similar figure is expected for 2014.continues the Ubifrance director. However, this performance could easily reach 10 % if the infrastructure problems were finally resolved.s". Ambitious though it is, Indonesia has to contend with the typical difficulties of emerging economies: fragile infrastructure and energy shortages. "This explains why the new President Jokowi's priorities are focused on these areas"says Angga Humas, an economist for the local English-language press. Among the major projects currently underway, the Jakarta metro has taken more than two decades to see the light of day. But in January 2014, work finally began on the first section of the North/South line. In all, 42 km of the network should be in circulation by 2018. "This is an urgent necessity for one of the world's most congested megacities, with 13 million vehicles on the roads every day and people spending four to five hours a day in their cars."continues Angga Humas. In return, nobody will blame you for being late for an appointment...

Other obstacles still stand in the way of the country's success, chief among them a high level of corruption. Transparency International ranks Indonesia 118th out of 176 countries in its annual list, mainly because of bureaucratic red tape that is difficult to overcome. The new president hopes to tackle this serious problem by strengthening the measures of the KPK, or Corruption Eradication Commission, a state body set up to control and limit abuses. Another weakness, despite the significant progress already made in reducing poverty, is that social disparities are still very wide. The benefits of development are not evenly distributed, and for more than three years Indonesia has been unable to overcome the pitfall of low wages. Almost half the population lives on the poverty line, and strong economic growth is primarily driven by domestic consumption and the export of natural resources. So there is little room for added value. What's more, the social system is still very fragile, and has yet to be built from scratch. Finally, while the unemployment rate is tending to fall - it was only 6.2 % in 2013 - this figure seems to hide the presence of an informal sector that employs almost two-thirds of the population.

But even before these problems are solved, Jakarta is attracting so many more business travellers."It is the country's business heartland, with a clear predominance of the tertiary sectorIt's a great place to be," says Alain-Pierre Mignon, Director of the Franco-Indonesian Chamber of Commerce, underlining the importance of distribution and retail to the capital's economy. "Indonesia has 70 million consumers out of a population of nearly 250 million.he continues. Every year there are four million more buyers!". The upper middle class, particularly in Jakarta, is growing at a phenomenal rate, generating strong momentum in the domestic market. "Pacific Place and Grand Indonesia are ultra-luxury malls unlike anything you'll see in France, and no match for those in Dubai."adds Alain-Pierre Mignon. In 2013, when the Indonesian capital's growth rate stood at 6.11 %, GDP per capita was up by 12.7 % on the previous year, at 10,510 dollars. This no doubt explains why there are 173 malls in Jakarta, and why shopping is one of the city's favourite pastimes.

Salaries up sharply

By November 2012, the minimum income had risen by 44 % in the Jakarta region, and according to a recent study, the number of people earning more than $3,600 a year could rise from 45 million in 2010 to 170 million in 2030. This superb economic momentum is having the effect of reducing the industrial fabric, which is moving towards central and southern Java. "Today, wages are around 40 % higher in Jakarta than in the rest of the island. This is why factories, particularly textile and footwear factories, tend to locate around Bandung and Surabaya."says Alain-Pierre Mignon.

In correlation with this rapid development, the immense craze for social networks has made Jakarta the world's most tweeted city and the sixth most connected metropolis in the world. As you stroll through the pretty neighbourhoods of Menteng and Kemang Cipete, the transformation of the capital is plain to see. Between two dilapidated colonial houses and a café with the look of a New York coffee shop, a design hotel opens its doors still drenched in fresh paint. "Some forty new hotels are planned over the next two years"says Patrick Murray, Director of Alila Jakarta. And not the least: a Raffles, a Fairmont, a Park Hyatt among others...

What better proof could there be of an economic boom and interest from foreign investors? Jakarta is definitely on the move. Even if the neighbourhoods undergoing gentrification still have no pavements, and in front of buildings that have only just been renovated, the dirty water from open drains still stagnates. To the north, in the district of Kota, a former Dutch colonial feud with an air of Amsterdam Art Nouveau, scaffolding can be counted by the dozen. You can feel the positive energy, the potential for blossoming, but also the promises that will take some time to be fulfilled. Kota plans to become an 'Art District', with trendy cafés and trendy restaurants rubbing shoulders with museums and event spaces. An essential development for a city where culture is lacking. And a big one: few museums, no opera, very few theatres... Which means that the wealthiest residents have to travel to Singapore to satisfy their artistic appetites.

One final gap remains to be filled: energy. Jakarta suffers countless power cuts. As a result, hospitals, hotels and administrative buildings are all very well equipped with generators. However, this pales into insignificance when compared with the 30 % households in Indonesia that do not even have access to electricity. With a population of 230 million, Indonesia may be one of the world's largest emerging economies, but it is also one of the biggest emitters of greenhouse gases. According to the National Council on Climate Change, the country emits 2.3 giga tonnes of CO2 per year, or 8 % of global emissions. This puts Indonesia just behind the United States and China. To remedy this situation, a "green growth" project combining economic development and sustainable development has been put in place.

Green policy

Characteristic of a fast-growing country, Indonesia is set to move directly from almost nothing to almost everything renewable. Within the next 15 years, it is predicted that 20 % of its energy needs will be supplied by clean, green energy. Many eco-districts are being developed in the capital, such as Citra Raya, which is an integral part of infrastructure projects such as the metro, new bus lines and the monorail that should link the city centre to the airport.

But it's also the culture of 'green building' that is emerging. It's a still new concept that a young Parisian company, GreenBuilding, helped to launch at a recent eco-neighbourhood competition. It is estimated that by 2030, 70 % of the Indonesian population will be living in cities. Faced with such upheaval, a minimum of planning is essential. That's why, in 2011, the government launched the Green Cities Development programme, with the aim of encouraging public initiatives linked to sustainable urban planning. From now on, towns with more than 500,000 inhabitants will be required to have a master plan. Some very large-scale urban projects are gradually emerging, such as the recent town of Bumi Serpong Damai, 40 km south-west of Jakarta. In agreement with the Green Building Council Indonesia, decrees have just been passed to reduce Jakarta's CO2 consumption by 30 % by 2030. Will the country's economic heartland one day become its green lung?