Jakarta.

Indonesia has the 10th largest economy in the world, according to a recent report by the World
Bank, with the country contributing 2.3 percent of global economic output.

The report released the findings of the 2011 International Comparison Program (ICP), which assesses
economies based on purchasing power parity (PPP) and noted that Indonesia moved up six places and
leapfrogged more developed countries such as Spain, South Korea and Canada.

The ICP round gathered over 7 million prices from 199 economies in eight regions, with assistance from
15 regional and international partners.

In the top nine are the United States, China, India, Japan, Germany, Russia, Brazil, France and Britain.

The middle-income economies of Indonesia, China, India, Russia, Brazil and Mexico now account for 32.3
percent of world gross domestic product. That compares with the 32.9 percent contributed by the six
largest high-income economies, United States, Japan, Germany, France, United Kingdom, and Italy. The
report also showed that the United States was about to lose its status as the world’s biggest economy,
as China is likely to surpass it by the end of this year, faster than widely anticipated.

The United States has been the biggest economy in the world since overtaking the United Kingdom in
1872.

The Organization for Economic Cooperation and Development (OECD) has predicted that China will
overtake the United States by 2016 while China itself is hoping to become number one by 2019.
According to the report China’s GDP was nearly 87 percent of the US GDP in 2011, while India had
moved up from being in 10th position in 2005 to the third-largest economy, overtaking Japan.

However, some say the PPP is just one measure to judge the performance of the world’s economies and
that developing nations like India and China still have a lot of catching up to do.

“When, for example, we measure international purchasing power expressed in dollars, which matters in
international trade, the United States, Europe and Japan continue to be the dominant economies in the
world,” Frederic Neumann, co-head of Asia economic research at HSBC in Hong Kong said as reported by
International Business Time, which quoted CNBC.

President Susilo Bambang Yudhoyono was quick to respond. “This morning I received a report that
Indonesia has become the world’s 10th largest economy. Thank God, it is all of our efforts and hard
work,” he said through his twitter account.

He said the nation continues working to reach higher levels of prosperity.

“This is of course a good start. But we still have a long way to go as we are facing many challenges.
However, God willing, we can overcome those challenges,” he told a gathering in Jakarta later in the
day.

Finance Minister Chatib Basri said the achievement was an endorsement of the government’s economic
policy. “That means Indonesia’s economy is on the right track and we have made significant progress
because a couple years ago we were in 16th position,” Chatib said, as quoted by Detik on Sunday.

But many other reports pointed out that while the rise of Indonesia should be praised, it has an uneven
growth rate, with a widening gap between rich and poor.

Citing a forthcoming report by the World Bank, the Economist warned that real consumption grew by
about 4 percent a year on average from 2003 to 2010. But for the poorest 40 percent of households it
grew by only 1.3 percent. In contrast, consumption by the richest 20 percent grew by 5.9 percent.

Based on this data, the magazine concluded that the rich are getting richer much more rapidly than the
poor.

The growing inequality between low-income groups and high-income groups has also been indicated by
the country’s worsening Gini coefficient — which represents income disbursement — from 0.29 in 2000
to 0.38 in 2011, a drop of almost a third in equality.
The Economist also points to the fact that the informal sector accounts for 70 percent of the country’s
GDP, meaning that the