The Report: Indonesia 2018

  • ID: 4453220
  • Country Profile
  • Region: Indonesia
  • 332 Pages
  • Oxford Business Group
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Strong Macroeconomic Fundamentals Should Keep GDP Growth Steady

FEATURED COMPANIES

  • Adaro Energy
  • Bank Rakyat Indonesia
  • Citi Indonesia
  • Lubis Santosa & Maramis
  • PwC
  • Surbana Jurong
  • MORE

Although Indonesia faces a challenging external environment, including the threat of US protectionist trade policies and concerns over contracting exports to China, its strong macroeconomic fundamentals should keep GDP growth steady, with this forecast to continue accelerating in 2017.

With commodities prices rising in 2017 - and with domestic demand supported by credit growth, steady FDI inflows and improved exports - Indonesia remains well positioned to progress towards becoming one of the world’s top economies.

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FEATURED COMPANIES

  • Adaro Energy
  • Bank Rakyat Indonesia
  • Citi Indonesia
  • Lubis Santosa & Maramis
  • PwC
  • Surbana Jurong
  • MORE

COUNTRY PROFILE

  • National goals: The administration continues enacting major reforms in strategic areas to realise its targets
  • Interview: President Joko Widodo
  • Viewpoint: Xi Jinping, President of China
  • Building blocs: With the 2019 elections on the horizon, the country remains committed to strengthening diplomatic and trade relations
  • Viewpoint: Mark Rutte, Prime Minister of the Netherlands
  • On the road: China’s One Belt, One Road initiative is reshaping South-east Asia

TRADE & INVESTMENT

  • Opening doors: New bilateral trade deals and efforts to improve the business climate are likely to lead to rising investment
  • Interview: Thomas Lembong, Chairman, Indonesia Investment Coordinating Board
  • At issue: Ratings upgrades are set to invigorate bond activity
  • It takes two: A number of significant bilateral agreements are under discussion, aiming to boost export earnings
  • Interview: Shinta Widjaja Kamdani, CEO, Sintesa Group
  • Steady progress: Enhancing the business environment remains crucial to attract further foreign direct investment
  • Fast route: New highway and maritime links between ASEAN countries will reduce transport costs and benefit trade flows

ECONOMY

  • Development condition: Investment, planning and improved ease of doing business to underpin continuing upward trajectory
  • Mind the gap: Improved fiscal management and oil prices are working in harmony to improve the bottom line
  • Interview: Jim Yong Kim, President, World Bank Group
  • Taxing questions: Amnesty programme to trigger step change in tax compliance as trillions of rupiah are declared
  • Interview: Hiroshige Seko, Minister of Economy, Trade and Industry of Japan
  • Policies of green: Changes in government regulation come in response to a challenging commodities environment
  • Accounting on change: Businesses and the government are turning to bond sales to fund infrastructure investment

EMERGING CITIES

  • Growing prominence: Various regional cities are quickly becoming centres of diversified economic and cultural activity
  • Interview: Tri Rismaharini, Mayor of Surabaya
  • Soaring Surabaya: This second-tier city is capitalising on its strategic location, providing connections between east and west
  • Interview: Sri Sultan Hamengku Buwono X, Governor, Yogyakarta Special Region
  • Digital transformation: Historically significant Yogyakarta region remains instrumental to the economy
  • Maritime capital: Makassar’s marine resources and geographical advantages are helping stimulate growth across different sectors

BANKING

  • Primed for growth: Islamic segment and financial technology expected to offer significant opportunities going forward
  • Interview: Kartika Wirjoatmodjo, President Director, Bank Mandiri
  • Interview: Jahja Setiaatmadja, President Director, BCA
  • Overseeing the industry: Establishing policies and guidelines for regulatory oversight in an evolving market is a key government priority
  • Interview: Suprajarto, President Director, Bank Rakyat Indonesia
  • Interview: Batara Sianturi, CEO, Citi Indonesia; and Chairman, International Banks Association of Indonesia
  • Wireless world: Technology is changing the structure of the sector, expanding financial inclusion and available markets

CAPITAL MARKETS

  • All up from here: The large and active bourse still has room to grow
  • Interview: Loh Boon Chye, CEO, Singapore Exchange
  • Securing opportunity: State-owned companies and smaller private firms are encouraged to list

INSURANCE

  • Room to grow: Strong fundamentals and rising demand underpin expansion of the industry, though penetration remains low
  • Interview: Ben Ng, President Director, AIA Financial Indonesia
  • Interview: Jens Reisch, President Director, Prudential Indonesia
  • Watchful eye: Regulations bring clarity and transparency to the new insurance law

ENERGY

  • At a crossroads: Efforts are made to increase power capacity and electrification ratios while expanding oil and gas production
  • Interview: Garibaldi Thohir, President Director, Adaro Energy
  • A redrawn contract: The gross-split revenue-sharing system is intended to simplify structures and slash red tape
  • Mixed signals: A new regional tariff system is brought in for renewable energy producers
  • Strategic value: Four upstream oil and gas projects fast-tracked under a national scheme
  • A new deal: Electricity regulations are introduced to bolster private investment in power production

INFRASTRUCTURE

  • Structurally committed: Pushing forward in what is a key area of development
  • Banking on change: Reformulated government funding to play an important role in infrastructure development
  • Interview: Bambang Brodjonegoro, Minister of National Development Planning
  • Setting sail: Major investments earmarked for maritime sector
  • Private presence: Increased involvement of the private sector is expected to help overcome challenges
  • Interview: Jin Liqun, President, Asian Infrastructure Investment Bank

TRANSPORT

  • Strong momentum: Plans for every segment to address efficiency and competitiveness
  • Interview: Elvyn Masassya, President Director, Pelabuhan Indonesia II
  • Making inroads: The popularity of ride-hailing apps continues to surge
  • Interview: William Sabandar, President Director, Mass Rapid Transit Jakarta
  • Taking off: Airport developments aim to match rising passenger and freight movement
  • Promising paths: The number of passengers commuting by rail continues to grow

INDUSTRY

  • Elevating productivity: Strides made in widening markets and easing reliance on imports
  • Interview: Airlangga Hartarto, Minister of Industry
  • Funding progress: New measures to improve access to finance for small businesses
  • Interview: Rosan Roeslani, Chairman, Indonesian Chamber of Commerce and Industry
  • Interview: Hemant Bakshi, President Director, Unilever Indonesia
  • Accelerating productivity: Car production drives economic growth as the country establishes itself as a regional automotive centre
  • Raising the bar: Initiatives are providing the workforce with competitive skills

RETAIL & E-COMMERCE

  • Going to market: Regulatory changes give retailers a boost amid declining growth
  • Interview: Hans Prawira, President Director, Alfamart
  • Interview: Kusumo Martanto, President Director, BliBli.com
  • Click to buy: Significant potential exists for online shopping platforms
  • Interview: Florian Holm, CEO, Lazada Indonesia

ICT

  • Next-generation opportunity: Rapid uptake of data plus a large population point to growth
  • Interview: Anthony Tan, Group CEO, Grab
  • Connecting the nation: Boosting the internet penetration rate is a key objective
  • Interview: Safdar Khan, Division President for Indonesia, Malaysia and Brunei, Mastercard
  • Keeping up with demand: The mobile segment is working to stay at the forefront of network technology

CONSTRUCTION & REAL ESTATE

  • Positive performance: The infrastructure agenda is expected to drive sector expansion further
  • Interview: Wong Heang Fine, Group CEO, Surbana Jurong
  • A helping hand: Reforms to affordable housing construction regulations could lead to accelerated development
  • Revising policy: New regulations alter investment landscape for foreign firms
  • Poised for a turnaround: After years of subdued growth, residential sales and prices are rising
  • Interview: Michael Widjaja, Group CEO, Sinar Mas Land
  • Online tools: Web-based property portals hold significant growth potential

TOURISM

  • Island attraction: Legacy destinations and new offerings indicate strong expansion
  • Interview: Taleb Rifai, Secretary-General, UN World Tourism Organisation
  • Building up: Strong arrivals growth promises rising demand for hotels
  • Interview: Bram Hendrata, Managing Director, Ismaya Group
  • Positive prospects: Success as a halal destination indicates large growth potential for the segment

MINING

  • Balancing act: Low commodities prices and a drive to bolster downstream activity require a nuanced approach to sector policy
  • All eyes on coal: Global trends and domestic power initiatives are boosting production

AGRICULTURE

  • Breaking new ground: Small-scale farming and mechanised production set to unlock potential
  • Production pick up: Growing domestic consumption strengthens palm oil outlook
  • Interview: Amran Sulaiman, Minister of Agriculture
  • Growth segment: Self-sufficiency in rice production helps to revitalise the sector

HEALTH

  • Universal coverage: Public and private initiatives are supporting sector growth
  • Interview: Fachmi Idris, President Director, BPJS Kesehatan

EDUCATION

  • Back to school: The government wants to work with private investors to overhaul the sector
  • Interview: Mohammad Nasih, Rector, Universitas Airlangga
  • PwC

TAX & BUSINESS

  • Evolving environment: A high-level breakdown of new tax regulations in 2017
  • Stepping it up: Building manufacturing capacity with additional industrial zones
  • Viewpoint: Ay Tjhing Phan, Tax Leader, PwC

LEGAL FRAMEWORK

  • Lubis Santosa & Maramis
  • Welcome steps: Approved regulations have improved the protection of well-known brands
  • Viewpoint: Todung Mulya Lubis, Founder and Senior Partner, Lubis Santosa & Maramis

THE GUIDE

  • Good night’s sleep: Hotels in popular cities
  • Listings: Telephone numbers of useful entities
  • Facts for visitors: Practical information and guidance
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  • Adaro Energy
  • AIA Financial Indonesia
  • Alfamart
  • Asian Infrastructure Investment Bank
  • Bank Mandiri
  • Bank Rakyat Indonesia
  • BCA
  • BliBli.com
  • BPJS Kesehatan
  • Citi Indonesia
  • Grab
  • Indonesia Investment Coordinating Board
  • Indonesian Chamber of Commerce and Industry
  • International Banks Association of Indonesia
  • Ismaya Group
  • Lazada Indonesia
  • Lubis Santosa & Maramis
  • Mass Rapid Transit Jakarta
  • Mastercard
  • Pelabuhan Indonesia II
  • Prudential Indonesia
  • PwC
  • Sinar Mas Land
  • Singapore Exchange
  • Sintesa Group
  • Surbana Jurong
  • UN World Tourism Organisation
  • Unilever Indonesia
  • Universitas Airlangga
  • World Bank Group
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