Asia And Its Return As An Economic Giant

Indonesia looks to split with GDP in favour of more balance

All around the world we see today a dichotomy between wealth and poverty.  Nowhere is that scarily abject than in the so called third world economies. Historically we have all followed an American devised system of statistical measure, “GDP” Gross Domestic Product. GDP is fine when you all share in the benefit, although arguably when you tour America you could say that GDP as a measure of wealth has failed even in the US, 1 in 8 live in poverty across this great nation.

Asia does however, have a handicap which Indonesia is not immune to. Much of the economy is controlled by family conglomerates, too few of these exist. Therefore, polarizing wealth into too few hands, which of course makes the government job to assist fledgling companies more difficult.

That aside Indonesia have opened the doors to eCommerce, the digital economy as a way to encourage a paradigm shift. To some extent this is wishful thinking but all credit to them they are at the beginning of a sincere initiative.

I have for a long period argued that you can not have a system that polarizes 80% of the world's wealth, and have that system determine well-being when the money is sitting with 20% of the population. The absurdity is more acute as you reach the top 2% or 3%. It is this dichotomy that will, over what is now a short period unwind society. My guess with Brexit, Italian elections, Jaunes Gilet (yellow vest), Trump's America this is all a polite wake up call to the elites in our political class that enough is enough. Whether they are yet listening that's not so obvious.

However, one area, for me a little surprising but most welcome nonetheless is the “World Economic Forum”. Here they have discussed, debated and formed the same conclusions, the system of GDP is archaic and replaced it with an Inclusive Development Index “IDI”. This index considers well-being, life expectancy, unemployment, median income, poverty, inequality, household savings, carbon emissions plus a myriad of other issues that encompasses us all. You could argue whilst our western politicians fiddle as Rome burns, line their pockets, protect their various expense scams other more dynamic areas have embraced this revolutionary index, Indonesia being one such area. 

In Asia, Australia and New Zealand rank highest, followed by South Korea and Israel, which rank in the top twenty. The next tier of emerging Asian countries is making substantial strides in most categories of inclusive development, including Azerbaijan, Malaysia, Kazakhstan, Turkey, Thailand, China, Iran, Vietnam, Indonesia, and the Philippines. We should be mindful that Asia is also home to countries in the bottom tier such as Afghanistan, Pakistan, India, Bangladesh, Cambodia, Laos, and Yemen. The Asia development bank have taken a step further and published their Social Protection Index. “SPI”. This index shows South Asia, Southeast and Central Asia are lacking their Eastern Asia neighbours with their subsistence programmes. But as with the economic wave example Asia will develop together through assisting each other, I have confidence the West could learn from the East when it comes to inclusive growth. Whether, the west is open to rocking the elites’ gravy train the jury is out.

If you look to the World Economic Forum website there is a PDF file which can be downloaded, this will give more depth to the points reference IDI that I have raised above:

“The Inclusive Development Index (IDI) is an annual assessment of 103 countries’ economic performance that measures how countries perform on eleven dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenerational equity – sustainable stewardship of natural and financial resources.

The IDI is a project of the World Economic Forum’s System Initiative on the Future of Economic Progress, which aims to inform and enable sustained and inclusive economic progress through deepened public-private cooperation through thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action.”

Bedtime reading...