Indonesia Makes an Impressive Debut, Sarkozy Defends the Euro and Humiliates Jamie Dimon

It was a crazy Thursday at Davos, as a small bomb detonating barely ranks as the day's third most explosive event

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DAVOS, Switzerland - Thursday will go down in the history of the World Economic Forum as one of the more action-packed days in the 41-year history of these annual meetings. It will also be recorded as the day that Indonesia was perceived by the global power elite to have joined the ranks of China and India as one of the world's fastest growing and most populous consumer markets, thanks to a statesmanlike debut here from mild-mannered President Susilo Bambang Yudhoyono.*

But first the story of a bomb blast here, which fortunately came to nothing.

Despite thousands of gun-toting Swiss soldiers and tight security everywhere, an extremist left-wing protest group managed to smuggle into the ski resort and detonate a small bomb in the basement of a luxury hotel. But nobody was hurt, and nobody was ruffled. In fact, the explosion at the Hotel Post Morosani was so minor that meetings resumed just minutes after the blast.

Later on Thursday a left-wing activist group called "Revolutionary Perspective" claimed responsibility for the attack, but Bill Clinton went ahead with a dinner meeting in the hotel that was hit. The only visible response was a huge lockdown of Davos, with lots of helicopters swirling overhead and sharp shooters on every roof.

The other fireworks at Davos were rhetorical, as French President Nicholas Sarkozy warned skeptics that the euro would never die and then laced into an unusually aggressive Jamie Dimon, chief executive of JP Morgan. Dimon made the decision to publicly provoke the voluble French president during a Q&A session after Sarkozy's speech. Big mistake.

But first the real story of the day from Davos was the remarkable debut of the former army general who has steered Indonesia into democracy and go-go economic growth.

Until now, the big story about the shifting plate tectonics of the global economy here at Davos has concerned the new respect on the part of Western business leaders for China, India, and East Asia. Add to these countries Brazil and Russia, and you have the now-dated concept of BRICs (Brazil, Russia, India and China) as the main miracle growth stories of the 21st century.

But on Thursday, as can only happen at Davos when the world's big shots assemble for group therapy, to compare notes and to network, Indonesia suddenly was catapulted to center-stage. That was in large part the result of the most impressive, crisp, and even visionary speech given by any world leader here in a long time.

Even before he started speaking Thursday morning, Davos founder Klaus Schwab cued things up by telling the crowd that Indonesia was the third fastest growing economy after China and India, the fourth most populous nation on the planet and the largest Muslim nation (except this is one of the few Muslim nations besides Malaysia that celebrates Christmas and Hindu festivals as national holidays as well as Ramadan).*

Then Yudhoyono (known back in Jakarta as "SBY") took the podium.

Coming the morning after a rambling and lengthy speech from Russia's President Medvedev, and with delegates bracing for the verbal pyrotechnics of France's Nicholas Sarkozy later in the day, the Indonesian president was acclaimed by even the most cynical Davos veterans as "impressive."

"When you think of Asia, also think Indonesia, which is the world's third largest democracy, the largest economy in Southeast Asia." - Yudhoyono

It wasn't just the warnings from SBY that rising food and energy prices could lead to social unrest and even an economic war, although this was an eloquent start. With the world population rising from seven billion to more than nine billion by 2045, he said this meant more than just food and energy prices fuelling inflation.

"Imagine the pressure on food, energy, water, and resources. The next economic war or conflict could be over the race for scarce resources, if we don't manage it together," said Yudhoyono.

But picking up on this year's conference theme of "shared norms for the new reality," he then tried to drive home the growing importance of Asia, including his country, in shaping the new world of the 21st century.

"Whatever you call them, BRICs or emerging markets, they already account for over half of the world economy and its growth. Many of the emerging economies are in Asia. By one estimate, Asia will account for 45 percent of the world's total GDP and one third of world trade by the end of this decade," said the Indonesian leader.

"I will let the pundits debate whether we are on the threshold of an 'Asian Century.' Whatever you call it, one thing is indisputable: Asia is undergoing a rapid and strong economic, social, cultural, and strategic resurgence -- the sum of which is certain to redefine global affairs," he told the audience.

Presented by

Alan Friedman, a longtime Davos attendee, is chairman of FBC Media, a public relations and communications firm whose roster of clients includes foreign governments. He has worked as an economics columnist for the Financial Times and the Wall Street Journal. [This bio was amended to reflect the nature of FBC's work.]

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