Nigeria and Indonesia: A socio-economic analysis


Nigeria and Indonesia share a lot in common. Both are emerging economies bogged down by weak currency, corruption, unemployment, poverty and poor infrastructure. But placed on a scale of one to 10, Indonesia is much better off. For instance, although the Indonesian media, especially Jakarta Post newspaper, continues to report incidents of corruption among politicians in Indonesia, the incidents pale into insignificance when compared to the magnitude of the massive corruption in Nigeria.

But Nigeria has its own areas of strength.. However, this analysis is meant to compare the two countries in terms of socio-economic parameters and thereafter draw conclusions and make recommendations for improvement in Nigeria.

My analysis would be based on empirical evidence of what I saw and heard during my recent visit to Indonesia, as well as facts and figures from secondary sources. To begin with, let me state that Indonesia is older than Nigeria. It got its independence in 1945 while Nigeria got hers in 1960. My visit happened a week after the country celebrated its 67th independence anniversary on August 17, 2012.

The entire country, urban and rural, was awash with the country’s white and red colours, mounted on the roads, buildings, bill-boards, etc or used in decorating shopping malls, super-markets, corporate offices and so on. You could see a people so proud of their country, so patriotic in defending it and its values, cultures, language and foods! This was a big contrast to Nigeria.

Right from the Jakarta international Airport, you would see a positive image of Indonesia. You would see orderliness in immigration formalities. You would encounter officials who are smart-looking and professional in their job.

In contrast, as you arrive the Murtala Muhammed International Airport Lagos, what you experience is confusion, tardiness, and too many officials in various uniforms, many of whom seem less interested in their official functions. The branding of Nigeria must start at the country’s entry points with these first-line officers, and good systems and procedures!

In terms of population, Indonesia is almost twice the size of Nigeria. By 2010, the country had a population of 237.6 million. Nigeria has about 167 million, 36 states and a Federal Capital Territory, and 774 local government areas. Indonesia has 27 provinces divided into 357 districts, which I am told, runs Nigeria’s kind of local government administration.

But the difference is that those elected at district levels are like a task force for rural development. My team visited many rural areas and saw that although their roads are quite narrow, they are tarred and maintained. You could see poverty but the rural folks are happy with their agriculture and plantations. They are also happy with their small Made-in-Indonesia commercial buses, mainly driven by ladies. They are so proud of their foods and local black tea!

Indonesia knows how to cut its coat according to its cloth! Despite its size and population, it has a unicameral legislature – the Indonesian House of Representatives! This helps it to reduce the cost of governance. Nigeria, on the other hand, has two parliamentary houses – Senate and the House of Representatives. Nigeria was just copying the United States of America model without looking at the cost of such bureaucracy. Perhaps, there is a lesson to learn there.

At the economic front, Nigeria is many poles away from Indonesia. As at 2011, the Gross Domestic Product of Indonesia calculated on purchasing power parity, according to the World Economic Factbook (2012), stood at $1.121tn. That of Nigeria was $414.5bn.

Calculated on the basis of per capita, the GDP of Indonesia is $4,700 while that of Nigeria is $2,600. Unemployment rate in Indonesia is estimated at 6.7 per cent while that of Nigeria is 21 per cent as at 2011. Nigeria’s National Bureau of Statistics has recently released new statistics that are frightening. The population of Indonesians living below poverty line is estimated at 13.33 per cent while that of Nigeria is 70 per cent.

Forgive me! Statistics could make an article to be boring to the uninitiated. But it is the fundamental tool of socio-economic analysis. What remains a paradox is that Nigeria’s currency seems stronger than the Indonesian currency (Rupiah). Naira exchanges at 160 to the US Dollar while the Indonesia Rupiah exchanges at about 94,000! Anyway, Rupiah is like Nigeria’s Kobo. The Indonesian Central Bank, certainly, would have its reasons for having only one currency. And its economy is better with it.

What really struck my team was the level of industrialisation in Indonesia. In Purwakarta, Cempaka and Bandung, where Indorama Corporation has sprawling industrial complexes producing polyester filament yarns, polyester staple fibre, polyester chips, PET resins, all types of fabrics including laminated ones, etc, you see production plants everywhere, producing various consumer/industrial products shipped to various countries of the world!

These companies employ millions of young and old Indonesians. You could see people working at the plants; producing goods/services of value. In Nigeria, employment and job creation are mere statistical expressions. In Indonesia, job creation is empirical. You can count it. You can name the companies and the number of persons working in them.

In Nigeria, I look back at Apapa Industrial area, Ikeja industrial area, Ilupeju industrial area, Kirikiri industrial area, Ogba industrial area – all in Lagos – almost all the companies there have closed down, and sent all their employees into the labour market.

I look at Trans-Amadi industrial area in Port Harcourt – all the companies have closed down. I look at the many industrial areas in Kano, Kaduna, Maiduguri, Jos and Sokoto – most of the companies there have closed down. It is the same with companies in Onitsha, Aba, Enugu and Nnewi. Years ago, Nigeria threw its doors wide open for all manner of imports.

As if corroborating my observation, the President of the National Association of Chambers of Commerce, Industry, Mines and Agriculture, Dr. Herbert Ajayi, recently cried out that 800 companies closed down between 2009 and 2011 due to the country’s harsh business operating environment.

As usual, Nigeria copied the concept of trade liberalisation and global competitiveness from the West, without any policy to protect local industries. Nigerian industries couldn’t cope, and all died of economic asphyxia. The lesson the world has learnt from the so-called “Asian Tigers” including China, India, Indonesia, Malaysia, etc, is that countries grow economically by protecting their local industries and strengthening their manufacturing sector.

Today, Indonesia can boast multi-billion-dollar companies including Indorama Corporation, Jardine/Astra International, Salim Group, Sinar Mas Group, Wilmer International, Djarum Group, Phillip Morris International, Bakrie Group, Lippo Group, Uniliver, and many more which are making billion-dollar revenues and swelling the country’s economy. Indeed, the August 2012 edition of Globe Asia, Indonesia’s No. 1 Business magazine, listed 100 Top Indonesia-based companies whose 2011 revenues have helped to insulate Indonesia from the global economic crisis.

On its part, the World Economic Factbook (2012) stated: “Indonesia has weathered the global financial crisis relatively smoothly because of its heavy reliance on domestic consumption as the driver of economic growth, (as well as) increasing investment by local and foreign investors”.

•Nkwocha, former General Editor of Newswatch, wrote in from Port Harcourt


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