Indonesia Retirement Today

Bali is a popular destination for the surfing crowd.

In 1997, Indonesia was falling apart at the seams from the Asian Financial Crisis that swept through Asia.In 1998, the country’s gross domestic product had declined by 13%, its currency had devalued by over 800% against the dollar, and Indonesia’s financial system was on the verge of collapse. However, an Indonesia retirement today is becoming increasingly viable as the country moves through an amazing recovery.

Indonesia Retirement Today: Indonesia’s Economy

 Prior to the Asian Financial Crisis in 1997, Indonesia was seen as one of the newly industrializing economies of Asia. Many thought that the country would be developing rapidly and would soon emerge as one of the new Asian Tigers behind the likes of Singapore and South Korea.

The country’s large resource base which includes fertile agricultural lands, petroleum and natural gas, and a wide range of metals like tin, copper and gold, seemed ready to launch the country into becoming one of the major players in the modern global economy. The country’s population of 230 million people made it the fourth largest market in the world. The country’s resource base and market attracted large inflows of foreign investment that accelerated the country’s growth. All the pieces for success seemed in place.

Then, in 1997 the Asian Economic Crisis rippled throughout the country causing the Indonesian economy to decline by almost 14%. Coupled with the collapse of the rupiah and ethnic violence, Indonesia seemed nothing more than an ailing Asian pussycat and nothing close to being the tiger as many had hoped.

Sunset over Jakarta with all the appearances of an economic recovery.

However, within a span of five years, Indonesia seemed to have picked itself up and is on its way to fulfilling its economic promise. Economic growth has increased to over 5% a year, the Jakarta stock market seemed to have recovered, foreign debt has declined as a proportion of its national income, its has risen to becoming the 16th largest economy in the world, and the election of a reform oriented government are all positive signs of the country’s recovery.

Today, nearly 42% of the country’s population still remain employed in the agricultural sector. About 39% of the population work in services and 19% in manufacturing. The large agricultural workforce is characteristic of a developing country indicating that the country still has a long way to go, but it now seems to be on the right course for success. Although today’s current Global Economic Crisis is slowing down Indonesia’s economic recovery, the country does not appear to be as heavily affected as some of the more developed nations as the world.

Indonesia continues to form strong economic ties to other Asian nations. Over 50% of its export trade is with other Asian countries, with Japan being the largest recipient of Indonesian exports. In turn, close to 60% of its imports come from Asia – primarily from Singapore, China and Japan. Foreign investment increased from $59 billion USD to $67 billion USD from 2007 to 2008 – a good sign that investors see a lot of potential in the country.

For retirement purposes, Indonesia seems to have turned the corner and now offers the retiree a stable and growing economy. The country still does have many problems associated with economic development, but one should be able to retire abroad to any of Indonesia’s major urban centers without a great deal of difficulty.

Curried chicken on a stick.

Indonesia Retirement: Indonesian Cuisine

The cuisine of Indonesia reflects it’s diverse history and its location along major trade routes between Europe and Asia. The Dutch, Spanish, and Portuguese left their cultural imprints on the country. India and China were trading partners with Indonesia long before European colonization. The archipelagic nature of the country also insures large regional differences among the many islands of the country.

And today, Indonesia’s emergence in the global economy insures that a retirement abroad in Indonesia will provide many of the American comforts of home for expatriate living – from supermarkets with international goods, to international fine dining restaurants catering to the tourists, and to the ubiquitous Kentucky Fried Chicken franchises.

Indonesia Retirement: Indonesia’s Healthcare System

Indonesia’s healthcare system is widely criticized for being inadequate. Although medical care is available in major urban centers, medical care is probably inadequate in most rural areas. The level of government funding for healthcare is relatively low in comparison to other countries.

It is estimated that each year, over a million Indonesians seek medical care overseas in Singapore, Australia or Malaysia. Indonesia’s healthcare system is ranked 92nd in the world by the World Health Organization. While it is likely that your average expatriate living in Indonesia’s major urban center will be able to obtain basic medical care without difficulty, it may be a more reasonable option to fly to a neighboring country with more advanced healthcare facilities for serious healthcare problems.

Indonesia Retirement: Housing

Cost of housing is quite variable in the country. The cost of living in any of the major cities is typically much higher than rural living. Expatriates report that the cost of living (including housing) will range from $400 to over $1,000 per month depending on one’s needs and style for housing and daily living expenses.

Despite social and political problems, most people are looking forward to a bright future.

Indonesia Retirement: Social and Political Issues in Indonesia

There are a number of separatist movement in the country, most notably in the provinces of Aceh and Papua that occasionally leads to open fighting. However, a ceasefire has been in effect since 2005.

Although Indonesia is a predominantly Muslim country, the government has cooperated with other nations in the fight against global terrorism from groups such as Al-Qaeda. There have been bombings as recently as this past summer which have taken lives. Many of these bombings targeted tourist areas such as major hotels and restaurants.

Jemaah Islamiyah is a regional “terrorist” group that has the goal of reuniting many of Southeast Asia’s countries into a single unified Muslim state. It is suspected that this group has been behind recent bombings of luxury hotels in Jakarta and in the southern Philippines in the summer of 2009.

Indonesia Retirement: Indonesia’s Infrastructure

The country has a well developed communications infrastructure. It is the 6th largest market for cell phone users in the world, hosts nearly a dozen national television networks, and has well over 30 million internet users.

Similarly, the country’s transportation network is relatively developed in the major urban centers of Indonesia. The country hosts several major international airports, world class ports, and a reasonable road and highway system.

While not perfect, an expatriate living in any of the major cities will have access to the kind of communications and transportation infrastructure that a typical American might expect.

Indonesia Retirement: Summary

Popular retirement destinations for expatriate living has been the capital city of Jakarta and the tourist mecca on Bali. The cost of living in Indonesia is relatively low, but can be pricey if you want a very high end lifestyle. The economy of Indonesia seems to be in recovery and growth mode, which bodes well for the future stability of the country.

If you decide to retire abroad to Indonesia, access to quality healthcare for major medical needs might be your major concern, but these can be obtained in neighboring countries which actively promote medical tourism.

Another potential concern are the separatist movements that resort to bombing in high profile tourist areas. While not frequent, they do occur and should be something to keep in the back of one’s mind.

Indonesia can be an ideal destination for a retirement abroad as long as you keep in mind the limitations and risks associated with the country. Aside from those risks and limitations, the country offers a wide range of retirement options from modern city living, to more rural mountain living, to miles of white sand beaches. Indonesia is emerging as one of the best places to retire in Southeast Asia.

(Photos by: Denzani, JazzPearl, Alex_F, Nikkers)

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