Investment-grade status still some way off for Indonesia

Standard & Poor's praises Indonesia's achievements, but suggests expectations of the country attaining investment-grade status are premature.

Indonesia has made significant strides towards building the political institutions necessary for the country to achieve investment-grade status, according to Standard Poor’s. But, unfortunately for more sanguine investors and the country’s policymakers, it is not there yet.

Generally, investment-grade sovereigns are in charge of their own fate, meaning they are able to absorb exogenous shocks by drawing on entrenched economic, political, and institutional strengths, SP credit analyst Agost Benard said in a statement yesterday.

Based on our criteria, the strength, predictability, and transparency of a country's political institutions are among the key considerations in assessing a sovereign. Indonesia has advanced much in this area over the past decade, although it still has...

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