Total of Indonesian Rich People Soars
Thursday, 18 October, 2007 | 14:51 WIB

Tempo Interactive, Jakarta: The growth in the total of rich people in Indonesia is the third highest in the Asia Pacific region.

The results of a survey by Merrill Lynch and Capgemini, entitled Asia-Pacific Wealth 2007, was released in Hong Kong on Tuesday (16/10) and stated that Indonesia's number of high net worth individuals (HNWI) in 2006 reached 20,000 people.

This means a 16.2 percent increase compared to 2005.
The highest billionaire number growth occurred in Singapore by 21.2 percent while in Indonesia the increase was by 20.5 percent.

Overall, the largest amount of rich people in the Asia and Pacific regions is in Japan, amounting to 1,477 million people.

Asia-Pacific Wealth 2007 is a part of the World Wealth Report 2007 that was presented by these two US organizations in Paris, in June. Merrill Lynch and Capgemini defined a HNWI as a person with wealth of more than US$1 million (around Rp9.2 billion) in the form of financial assets such as cash money, equities and commercial paper.

According to the two US-based organizations, the increase in the total of rich people and their assets gave the largest contribution to the gross domestic product and the stock market capitalization in their respective countries.

Merril Lynch and Capgemini went on to state that rich people in Asia-Pacific including Indonesia prefer investing money in property or real estate, commercial paper and asset stock issued by property companies (real estate investment trust/REIT's).

“They prefer investing in tangible assets,” says the report.

In response to the report, Avilliani an economic observer from the Institute for Development and Finance, said she regretted that the increasing number of rich people in Indonesia had not affected the real sector's ability to absorb workers.

This means, from an economic point of vciew, the soaring number of people in the upper-middle class does not much benefit the country.

“That shows that the rich are becoming richer and the poor are becoming poorer,” said Avilliani in Jakarta yesterday (17/10).

Iman Sugema, an economist from International Center for Applied Finance and Economics, said he was of the opinion that Merril Lynch's number was too conservative.

He said he assumed that the number of Indonesia's rich people was around 2 million or one percent of Indonesia's total population, higher than Merril Lynch's calculation.

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