TEMPO.CO, Jakarta - The World Bank predicts that Indonesia will have a hard time in competing with its immediate neighbouring economies due to its dependency on commodities exports. Furthermore, the Deputy President of the World Bank for East Asia and the Pacific, Axel van Trotsenburgm, also said that most of the developed economies have begun to recover.
Trotsenburg said that the solution to economic recovery differs for every country - for example, it differs depending on he investment climate of the country, the net export position of the country, and so on. "China, Malaysia, Vietnam, and Cambodia, increased their exports to fuel their growth," he said at a live stream at the World Bank's office in Jakarta, at the Indonesian Stock Exchange (ISX) building on Monday, October 6, 2014.
According to Trotsenburg, the economies in East Asia and the Pacific is generally experiencing a slowdown this year. However, most of these economies are well-buffered to deal with such deceleration - unlike Indonesia, which is predicted to grow at 5.2 percent, down from 5.8 percent growth rate recorded in 2013.
"Economic recovery would happen sooner if the government would commit itself to necessary reforms - for example, by removing barriers to investments, investing to increase its' competitive advantages, and through sound spending of the 2015 State Budget (APBN), said Trotsenburg.
The World Bank predicts that developing countries in East Asia will growth at an average rate of 6.9 percent. China, is expected to average at 7.4 percent this year, before slowing down to 7.2 percent in 2015.
The report stated that the Malaysian economy is growing at 5.7 percent - higher than previous estimates of 4.9 percent. "Malaysia exports were doing pretty in the first quarter of 2014," said Trotsenburg.
Meanwhile, Cambodia's economic growth rate is predicted to be around 7.2 percent - up from previous estimates, as it is fuelled by their garment exports industries and a brighter outlook on the Thai economy. "These can be achieved as long as riots do not break out once more," said Trotsenburg.
The Philippine economy is still dominated by remittances from overseas workers - still a significant driver of the Philippines' economic growth, which is expected to grow at an average of 6.4 percent in 2014, and 6.7 percent in 2015.