If we have a look at the opportunities of development across the world’s 20 major countries, then India and Indonesia will prove to be the most different. It has been estimated by the International Monetary Fund (IMF) that both these countries will be the fastest growing economies in the world in 2023 and during the next five years. In the era of shrinkage of globalization, automation, and changes in energy system, both the countries are working on different strategies to get rich.
A number of similarities can be found between India and Indonesia at first glance. Both the countries are being led by popular leaders first elected in 2014. Secondly, large-scale development of infrastructure is taking place in both the countries. Since 2014, 18 ports, 21 airports, and 1700 KM of toll road have been developed in Indonesia. Indonesia’s per capita national income is 3.43 lakh rupees, and that of India is almost its half. And while on the one hand, due to 5 lakh engineers being prepared every year, India’s share in the global IT services is 15 percent, while Indonesia is ahead in commodities export. And by 2030, Indonesia will become the 4th largest producer in the world of green commodities like the nickel used in electric batteries and electricity grids.
In 2021, the share of tech-services in India’s exports remained 17 percent and that of commodities in Indonesia remained 22 percent. But less jobs get created in these sectors. There are only 5 lakh workers in India’s IT industry. Both the countries want to prepare the private sector with industrial policies. And India has taken a good start. The value of MSCE India Index, which covers 85 percent of the market, is 24 percent of the GDP, which is 68 lakh crore rupees. And the value of Indonesia index is only 10 lakh crore rupees or 10 percent of the GDP.
The focus of Indonesia’s industrial policy is on natural resources. And while both the countries’ development rate is good, but formal jobs are really less in comparison to China and other east Asian countries. Therefore, it is expected for India to grow rapidly with a strong private sector and capital markets. Both the countries are already growing at a fast pace. In the last 10 years, while India’s GDP has gone up by 71 percent, that of Indonesia has increased by 52 percent. And productivity is being dominated by services rather than manufacturing.
The share of business in the GDP is 40 percent, and according to the standards of the rich world, the government expenditure is less in both the countries. In India, government spending is 30 percent of the GDP and it is 18 percent in Indonesia.
