But Indonesia has a few things going for it:
— two major exports are recession-proof
— lower cost producer of thermal coal and closer to China (tpt costs lower) than Oz means there will still be demand for its coal; and
— palm oil cooking oil is the cheapest cooking oil;
— cheap labour attracting the likes of Foxcomm;
— last yr’s floods in Thailand are prompting MNC manufacturers to a “Thailand + one” strategy; and
— consumption now accounts for two-thirds of gross domestic product in Indonesia.
Malaysia is one of the most vulnerable Asian economies should a “perfect storm” of a disorderly debt default in Europe, a slowdown in China and the United States and rising tensions in the Middle East materialise, Roubini Global Economics said in a recent report.
The research firm, which predicted the 2008 global financial crisis, said Malaysia had the highest exposure to a pullout of capital as its euro zone and US bank claims amount to more than 25% of GDP.
The report said Malaysia was among the lowest ranked in terms of monetary and fiscal capacity to respond to a crisis, coming in ahead of only Thailand, Japan and Indonesia.
“Malaysia, Taiwan, South Korea and Vietnam appear to be the most exposed to a perfect storm through their trade and financial linkages, while South Korea, Australia, Vietnam and the Philippines … have the most policy space to offset such an external shock.”