Indonesia: The Emerging Secret?

Indonesia at a glance

Source: CIA : The World Factbook.

Area:

The world's largest archipelagic state

15th largest in the world

Population:

Median age - 28.5 years

4th largest in the world

Religion:

The world's largest Muslim-majority nation

Resource:

Petroleum, tin, natural gas, nickel, timber, bauxite, copper…

GDP (PPP):

$1.212 trillion, ranked 16th in the world

Indonesia’s economy is cruising steadily

GDP growth

Source: IMF WEO.

Note: Projections are shaded.

-15

-10

-5

0

5

10

15

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

Developing Asia

Advanced economies

Indonesia

Indonesia’s government debt is among the lowest

Government gross debt as percent of GDP

Source: IMF WEO.

Note: Projections are shaded.

0

20

40

60

80

100

120

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

Advanced economies

Developing AsiaIndonesia

Direction of trade in Indonesia

Percent of total export / import, 2011

Source: ADB.

Japan17%

China11%

Singapore9%

U.S.8%

South Korea

8%

India7%

Malaysia5%

Others35%

ExportChina15%

Singapore15%

Japan11%

South Korea

7%

U.S.6%Thailand

6%

Malaysia6%

Others34%

Import

Building stronger trade relations in Asia

Total export volume to other countries

Source: ADB.

0

5

10

15

20

25

30

35

1994 1996 1998 2000 2002 2004 2006 2008 2010

US$ billions

Singapore

Malaysia

Japan

China

Indonesia has a relatively young population

Percent of people aged 0-14, 2011

Source: World Bank.

15.3%

19.1% 20.1%

25.0%26.7%

30.2%

0

10

20

30

40

Russia China U.S. Brazil Indonesia India

Percent

Indonesia’s labor supply is abundant

Labor force growth rate

Source: World Bank.

0

1

1

2

2

3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Percent

Indonesia

East Asia & Pacific (developing)

OECD

Indonesia stock market continued to surge

Source: Bloomberg.

0

1

2

3

4

5

6

Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12

Index (thousand)

Jakarta stock exchange index

S&P500 index

Middle class in Indonesia is expected to grow dramatically

Projected middle class population growth (2011 - 2050)

Source: HSBC.

0

100

200

300

400

500

600

India Indonesia Russia Brazil China

Percent

Improving business climate is a must

Rankings of 185 economies, 2012

Source: World Bank.

Economy

Ease of

doing

business

Starting a

business

Registering

property

Getting

credit

Protecting

investors

Paying

taxes

Enforcing

contracts

Resolving

insolvency

Singapore 1 4 36 12 2 5 12 2

U.S. 4 13 25 4 6 69 6 16

China 91 151 44 70 100 122 19 82

Russia 112 101 46 104 117 64 11 53

Indonesia 128 166 98 129 49 131 144 148

Brazil 130 121 109 104 82 156 116 143

India 132 173 94 23 49 152 184 116

Indonesia is projected to be among the world top 10

economies in 2050

GDP at PPP (2011 US$ billions)

Source: PWC.

Rank GDP Rank GDP

China 2 11,347 1 53,856

U.S. 1 15,094 2 37,998

India 3 4,531 3 34,704

Brazil 7 2,305 4 8,825

Japan 4 4,381 5 8,065

Russia 6 3,031 6 8,013

Mexico 11 1,761 7 7,409

Indonesia 16 1,131 8 6,346

Germany 5 3,221 9 5,822

France 8 2,303 10 5,714

2011 2050

Slides from Luhut Pandjaitan

Wealth = Investment Opportunities

1. We are confident that the currently sound economic growth

will continue.

2. We have proven that we can manage our domestic security

effectively, thus fostering stable and secure political and

investment climates.

3. We believe there will be no major turbulence during the

upcoming 2014 General Elections and its aftermath.

Conclusion

Slides from Achmad Kurniadi

The Investment Coordinating Board of the Republic of Indonesia

Indonesia at a glance

•Largest archipelago country in the world

- Island : > 17,000

- Lands : 2 million km2

- Sea : 5.8 million km2

- Coastal : 81,000 km

•Population : 232 Million

•Over 300 ethnic groups

•The largest multilingual population in the world (more than 700 languages spoken)

•Third biggest democratic country

The Investment Coordinating Board of the Republic of Indonesia

Current conditions:Global confidence for Indonesia began to rise 2014

GDP nominal : ˜US$ 6.460 B – 8.152 BGDP nominal/capita: $ 20.600 – 25.900As a 10 major world economic power

2030

2011

GDP nominal : ˜US$ 1.206 BGDP nominal/capita: $ 4.803As a 14 major world economic power

2025

Assumption: Real growth between 7 – 8 %

**

GDP nominal : ˜US$ 3.760 – 4.470 BGDP nominal/capita: $ 12.855 – 16.160

2050GDP nominal : ˜US$ 26.679 BGDP nominal/capita: $ 78.478As a 6 major world economic power

*

“To enhance Indonesia as the developed countries and included as 10 major world power in 2030 and 6 in the world in 2050 through high economic growth inclusive and sustainable”

VISION:

National Economic Growth Projection

** Goldman Sachs projection* Government Unofficial projection

Source:”Masterplan percepatan & perluasan pembangunan ekonomi Indonesia 2011-2025”, Bappenas. 2

The Investment Coordinating Board of the Republic of Indonesia

3

(Rp Trillion) 2010 2011 2012 2013 2014TOTAL

(2010-2014)

FDI 147.9 172.8 204.1 272.6 329.0 1,126.4

DDI 60.6 67.2 79.4 117.7 177.9 502.8

TOTAL TARGET 160.1 240.0 283.5 390.3 506.9 1,629.2

(US$ 183.1 Billion)

Assumption: US$ 1 = Rp 8,900,-)

Target: BKPM Strategic Plan 2010-2014

0

500

1000

2010 2011 2012 2013 2014

FDI DDI

Investment Realization Target (Rp. Trillion)

Total Investment Realization to

achieved in2010-2014:

US$ 183.1 Bn

Source: BKPM

ACHIEVEMENT 208.5 251.3 N/A N/A N/A459.8

(US$ 51.6 Billion)

The Investment Coordinating Board of the Republic of Indonesia

4

No Country ProjectInvestment Value

US$. Thousand

1 Japan 168 1.151.658,20

2 USA 44 885.691,25

3 South Korea 174 774.731,13

4 Singapore 331 615.989,22

5 United Kingdom 48 544.010,15

6 BelandaThe Netherlands 50 330.512,74

7 Malaysia 126 155.350,00

8 British Virgin Islands 58 151.143,09

9 Australia 70 134.498,81

10 Luxembourg 8 98.678,35

Top-10 Biggest Investors in Indonesia (realization value & Projects, Period of Jan-Mar 2013)

The Investment Coordinating Board of the Republic of Indonesia

5

No Sector ProjectInvestment Value

US$. Thousand

1 Mining 207 1.376.290,96

2 Basic Chemical, Chemical Goods and Pharmaceutical 90 1.228.176,73

3 Basic Metal and Metal Goods, Machinery and

Electronics

121 1.041.925,27

4 Transportation and Other transportation industry 49 866.385,08

5 Paper and Paper Goods Industry and Printing 20 579.261,58

6 Food & Beverages Industry 156 405.475,22

7 Foodcrops and Plantation 127 314.334,06

8 Textille Industry 42 234.334,65

9 Electricity, Gas and Water 34 217.969,05

10 Trade and Reparation 500 215.500,08

Top-10 Biggest Investors in Indonesia (realization Value & Projects, Period of Jan-Mar 2013)

The Investment Coordinating Board of the Republic of Indonesia

6

No Location ProjectsInvestment Value

US$. Thousand

1 West Jawa 239 1.339.240,98

2 Banten 143 1.109.345,74

3 Papua 18 832.900,62

4 East Jawa 116 605.004,70

5 Riau 30 588.663,49

6 Central Sulawesi 14 516.798,63

7 Jakarta 715 477.422,10

8 Central Java 47 241.402,81

9 West Nusa Tenggara 80 211.527,90

10 North Sumatera 51 175.290,74

Top-10 Biggest Investors in Indonesia (realization Value & Projects, Period of Jan-Mar 2013)

REGULATORY FRAMEWORKTO IMPROVE INVESTMENT COMPETITIVENESS

(LAST 3-YEAR PERIOD)

1. General Plan on Investment (RUPM) enactment; in which, each regional province

also set its Regional General Plan on Investment (RUPMD)

2. Revising Negative List of Investment 2012 (on-going process)

3. One-Door Investment Services (PTSP) Simplification of licensing services

4. Information and Licensing Network System (Sistem Pelayanan Informasi dan

Perizinan Investasi Secara Elektronik/SPIPISE) Simplification of Licensing

5. Fiscal Incentives (Tax Holiday, Tax Allowance & Tariff Reduction on Income Tax)

and Import Duty on Capital Goods

6. Special Economic Zone Development

7. Public Private Partnership (PPP) Scheme in Infrastructure projects acceleration

Indonesia Economic Development Corridors

“Center of mining production and national

energy "“Center of national

agriculture, plantation, and fishery production''Sumatera Corridor

Kalimantan CorridorSulawesi Corridor

“Gateway of National tourism and backbone

of food security''

“National pioneer of manufacturing and service industries "

“Development of energy, food crops, fishery, and

national mining"

Java Corridor

Bali - Nusa Tenggara CorridorPapua - Maluku – Maluku Utara Corridor

“Center of natural resource cultivation, national food, and

energy "

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