Indonesia, the fourth largest country in the world in terms of population, is surprisingly missing from the media radars. Putting aside some natural disasters or terrorist threats, nobody speaks about it, as if it doesn't exist on the maps. Yet, just 10-15 years ago, Indonesia was on the radar screens as an illustration of success story of economic development. Despite the brutality of the regime, the foreign investors were lining up to put their money into different projects, big or small. The Asian financial crisis put an end to this story. In a sense, despite the official economic recovery, and the political democratization, Indonesia wasn't able to position itself again among the best performing developing markets.

Moving up and down the scale of relative affluence and prestige among the nations is something that depends on many factors, both domestic and external. Indonesia was in a sense blessed by the fate after the independence because of the global Cold War confrontation. The West, 'losing' China, then Vietnam, and fearing losing other parts of the continental Asia, poured money, technologies, and expertise in the countries that showed willingness to stop the communist push to south. During the fateful decade of the Vietnam War, and especially in the year when South Vietnam fell, most countries in the region showed clearly who were their friends and foes alongside the confrontation East-West. Indonesia stood with the West. Its dictator Suharto cashed in on his foreign partnership with Washington, and moved well up on the scale of economic development.

From a former colony relying economically mainly on some exports of natural resources, Indonesia was turning fast into new a Asian industrial 'tiger'. It entered the race well after some other newly industrialized nations, but this wasn't the main reason why it failed where others succeeded. The mere numbers made it extremely difficult to raise such a huge population out of poverty within such a short period. Some regions of the vast country were quickly modernizing and looked like regions in South Korea or Taiwan. Most of Indonesia, however, by the mid-1990s still remained peasant country, relaying mostly on subsistence agriculture. By the time the Asian crisis hit and Suharto lost power, the country wasn't ready to move ahead independently from the political instability. After a brief period when Indonesia appeared to be moving toward semi-periphery of the world market, it went back to its traditional peripheral place.

The changes in Asia in the last 10-15 years are fundamental. The rise of China and India and their integration into the world markets, the global withdrawal of the communism as comprehensive alternative to the capitalism, the end of the Cold War, all these factors put Indonesia far behind the new 'stars' of the international investors, big and small. But in Jakarta the time has stopped somewhere in the first half of the 1990s. The investors in vain would expect better terms and more friendly bureaucracy. Indonesian government is still thinking in terms of a bygone era, as if China is still state-owned economy, India is still in self-imposed isolation, and the hordes of communists are still pushing south toward the trade roads between the Pacific and the Indian Oceans.

As a result, the real estate market is below its levels of 1997 in real value, the investors are either fleeing toward more attractive regional destinations, or are reducing their local portfolios, adopting wait-and-see strategies. The government is doing remarkably well in only one direction, creating additional red tape for those who are still trying to move in. The news of frequent natural disasters and the fear of terrorists don't help in improving the image of the country. And by that time other Asian 'tigers' and 'dragons' are taking over market niches that Indonesia was exploiting for many decades. The worst is that it seems that Jakarta doesn't understand this regional dynamic. No surprise then that Indonesia is missing as a success story from the world media radars.

Country profile:

• Area: 1,919,440 sq km
• Population: 234.7 million (July 2007 est.)
• Population growth rate: 1.21% (2007 est.)
• Life expectancy at birth: 70.16 years
• Total fertility rate: 2.38 children born/woman (2007 est.)
• Major infectious diseases: high degree of risk
• GDP real growth rate: 5.5% (2006 est.)
• GDP per capita: purchasing power parity $3,900 (2006 est.)
• Main trading partners: Japan, the United States, Singapore, China, Malaysia, and South Korea.
• Debt external: $130.4 billion (2006 est.)
• Internet users: 20 million (2007 est.)

(Source: CIA World Factbook 2007; Reuters)

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See also the directory of companies providing real estate services in, and general real estate information of Indonesia.