MALAYSIAN airline entrepreneur Tan Sri Tony Fernandes says he has two adopted homes. There’s London, where he owns the Queens Park Rangers soccer club and the Caterham Formula One auto-racing team based in nearby Oxfordshire. And there’s Jakarta, a thriving, congested Southeast Asian megacity in the world’s fourth-most-populous nation.
Last year, Fernandes, founder and group chief executive officer of Asia’s biggest budget airline, Kuala Lumpur-based AirAsia Bhd (AirAsia), moved his office to Indonesia’s capital, beating traffic gridlock by living in an apartment that’s walking distance to work.
Although AirAsia’s official headquarters remains in Malaysia, Fernandes said his relocation with a team of executives will help him focus on a market that’s eight times bigger than his homeland, Bloomberg Markets will report in its July issue.
“Indonesia is the jewel in our crown,” says Fernandes, whose airline connects some 20 other countries, including Australia, China, India and Japan.
“It’s a booming, vibrant, young economy. The opportunities are enormous.”
Just how enormous is evident from the wealth being created in this nation of 249 million people, where a newly enriched middle class is taking to the skies.
After contracting 13 per cent during the Asian financial crash of 1997 to 1998, Indonesia’s consumption-driven, resource-rich economy has enjoyed 13 years of uninterrupted growth – even during the global banking crisis – surging an average of 6.3 per cent annually since 2010. The country’s stock market has performed even more spectacularly.
As of June 12, the benchmark Jakarta Composite Index had leapt almost 350 per cent from its October 2008 nadir, making it the second-best performer during that period out of 94 markets tracked by Bloomberg.
In 2011, Indonesia overtook its former colonial master, the Netherlands, to become the world’s 16th-largest economy, according to data compiled by Bloomberg. In 2012, output rose another 6.23 per cent to almost US$900 billion and foreign direct investment jumped 26 per cent to a record US$23 billion.
And if it maintains a growth rate of about six per cent, by 2030 it will have leapfrogged Germany and the UK to rank seventh, consulting firm McKinsey & Co predicts. Much sooner than that, by 2020, the number of middle class and affluent Indonesians may double to more than 141 million, Boston Consulting Group said in a March report.