Disclosure: I am long IDX.
I explained in my baseline article on emerging markets that the scale bias embedded in funds such as iShares (EEM) can mean aggressive investors need to take a more specific approach to avoid missing out on growth. My first country article featured Thailand. In this article I shift focus to the largest South East Asian Economy - Indonesia.
Geography, History, and Demographics
Indonesia is a long archipelago stretching from just North of Australia to Indochina, which forms the backbone of South East Asia. Known in the 16th century as the "spice islands" the main Islands, Java and Sumatra were colonized by the Dutch. The dominant global trading company of the time, The Dutch East India Company, was founded on the exports of pepper and cloves to European markets. After the East India Company disbanded in 1800, the area was formally colonized as Dutch East Indies, and by 1900 the colony had expanded to the area forming modern Indonesia. During this time, the Dutch developed significant infrastructure on the island of West Java around the capital, Jakarta, but other areas remained relatively unimproved.
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