Happy birthday Indonesia 🇮🇩
August 17th, /2020
The next great expansion has began for these old friends...
75 today
Happy 75th birthday Indonesia! 75 years is a long time. I arrived here just after number 50, so I’ve now been here for 1/3rd of the history of the country. While I share with you one third, there’s someone or rather something else I know which shares the entire history. This thing & Indonesia are perfect matches. What is it?
3 downs, 2 ups
First, let’s look back at 75 years of economic history. The Indonesian economy has gone from about $4bn to $1.2tn. This journey has had 3 bad times & 2 good times. The first bit was bad, then late 1960s to mid 1980s was great. Then slowdown & collapse to 1998. Then surge to 2012, then slowdown to minus again now.
What matches?
Some of the highs & lows are extraordinary. The rupiah went from 4 to the dollar to 1,000 in the first years. The economy grew 50% in dollars by the late 1970s. The late 1990s was negative -20%. Then we grew at 20% & even faster than China in the 2000s. So what is the other thing which matches this?
Palm oil does
The other thing whose history matches perfectly with Indonesia is palm oil. Palm oil prices have followed exactly the same growth pattern only more extreme. Negative growth in the 60s, positive +100% in the 70s, then down to negative again in the late 90s. Famously positive in the 2000s, growth slowed back down again to 2019. Its a perfect match.
Up
It makes sense of course. Indonesia is the largest producer & the largest consumer in the world. In 2020 the price of palm oil is rising double digits again & this shows us that the Indonesian economy is about to enter its 3rd major up cycle. Happily there’s lots of listed plantations to invest in. Guess who covers them all...
Happy 75th birthday Indonesia! 75 years is a long time. I arrived here just after number 50, so I’ve now been here for 1/3rd of the history of the country. While I share with you one third, there’s someone or rather something else I know which shares the entire history. This thing & Indonesia are perfect matches. What is it?
3 downs, 2 ups
First, let’s look back at 75 years of economic history. The Indonesian economy has gone from about $4bn to $1.2tn. This journey has had 3 bad times & 2 good times. The first bit was bad, then late 1960s to mid 1980s was great. Then slowdown & collapse to 1998. Then surge to 2012, then slowdown to minus again now.
What matches?
Some of the highs & lows are extraordinary. The rupiah went from 4 to the dollar to 1,000 in the first years. The economy grew 50% in dollars by the late 1970s. The late 1990s was negative -20%. Then we grew at 20% & even faster than China in the 2000s. So what is the other thing which matches this?
Palm oil does
The other thing whose history matches perfectly with Indonesia is palm oil. Palm oil prices have followed exactly the same growth pattern only more extreme. Negative growth in the 60s, positive +100% in the 70s, then down to negative again in the late 90s. Famously positive in the 2000s, growth slowed back down again to 2019. Its a perfect match.
Up
It makes sense of course. Indonesia is the largest producer & the largest consumer in the world. In 2020 the price of palm oil is rising double digits again & this shows us that the Indonesian economy is about to enter its 3rd major up cycle. Happily there’s lots of listed plantations to invest in. Guess who covers them all...
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