James O’Neill recently came out with the MINT slogan, which has followed on from the BRICS that he issued back in 2001. While the countries that form the MINT (Mexico, Indonesia, Nigeria and Turkey) have been heavily scrutinised over the past couple of months Indonesia has shown tremendous growth in the number of millionaires and looks poised for foreign investment.
The reason for these countries being selected rested on three main areas. Each country has a young population with all being lower than 29 years, they all are in geographical locations where demand is high for raw material imports and all except Turkey are commodity producers.
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One country out of these nations that looks to be the most promising is Indonesia. According to WealthInsight, between the years 2007-2011, even with the financial crisis affecting many countries across the world, the total number of HNWIs (high net worth individuals) increased by 67% to 37,400, higher than any other country in the world. This figure is expected to rise by a further 123% to 83,544 by 2016, with a total wealth increase of 176% to US$593.3 billion. These figures are also in line with GDP data that shows Indonesia recording levels of 7.27% by 2017, higher than any other MINT nation.
The main factor that contributed to this significant rise is due to the close proximity Indonesia has to the second largest economy in the world, China. With the Chinese population demanding more raw materials, Indonesia is in a prime location to offer coal, helping its raw materials sector record the highest number of ultra-HNWIs (those with $30 million in assets or more) at 37%.
Chinese HNWIs also see Indonesia as a profitable country to invest in, as Indonesia came above nine other countries that include the likes of Brazil, the US and the UK. Indonesia also ranked eighth on a global scale of top countries to invest in.
With all these HNWIs coming into the market, many wealth management companies and luxury good brands will begin to step into Indonesia and stake a claim to market share. With all this new found wealth coming into the country in such a short space of time, luxury companies should soon consider moving resources into Indonesia before the region becomes saturated.
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By GlobalDataTom Carlisle is an analyst at WealthInsight
