The third new ETF of 2009 began trading yesterday, the Market Vectors Indonesia Index ETF (IDX). Van Eck Global, based in New York, is the manager for the new fund. The press release gives the impression that the underlying index was created specifically for this product.

According to Van Eck Global, Indonesia is the largest economy in Southeast Asia (a definition that excludes Hong Kong and Taiwan), and is one of the fastest developing emerging market nations. Their marketing literature provides more reasons why they are bullish on the prospects for Indonesia.

However, the fund faces many obstacles, not the least of which is global recession. Additionally, many new ETFs are having a tough time attracting investor interest, including single-country products such as this one. Unless the Indonesian stock market makes a very strong showing in 2009, assets and investor interest in this fund will likely be dismal. There were 400 shares traded yesterday and none today.

One last challenge facing Indonesia, and therefore this ETF, is the world’s perception regarding its economic freedom, or lack thereof. A report by the Cato Institute states that Indonesia ranks number 110 on the economic freedom list. Indonesia will have a better shot at long-term success if if follows the lead of its Southeast Asian neighbors Hong Kong (ranked #1) and Singapore (ranked #2).