LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Overview of Indonesia and its Economydensity is as high as 13,177 people per sq.km. Outside Java and Bali, population density averages lessthan 100 people per sq.km, with Papua having only seven people per sq.km.1.8.3 Welfare and povertyOver the last 30 years, Indonesia has made good progress in raising the welfare and standard of living of itspoorest citizens. The proportion of the population living below the nationally defined poverty linedecreased from 27% in 1999 to 17% in 2004. Progress has also been made against internationalbenchmarks, with only 7.4% (according to 2003 data) of the population living on less than US$1 per day.However, overall income distribution remains highly unequal. Statistics show that some 53% of thepopulation (110 million people) still live on less than US$2 per day. This group suffers from the lack ofaccess to basic services such as water and sanitation, inadequate provision of healthcare and educationand remains highly vulnerable to shocks in the economy. Geographically, poverty is concentrated in ruralareas and in eastern Indonesia. In 2004, approximately 20% of the rural population lived below the povertyline, compared with 12% of the urban population.Figure 1.8.1: Socio-economic survey* in Indonesia, 2001-2006Percentage100%90%80%70%60%50%40%30%20%10%0%2001 2002 2003 2004 2005 2006YearA (Above Rp2 mil/month)B (Rp1.5-2 mil/month)C1 (Rp1.0-1.5 mil/month)C2 (Rp 0.7-1.5 mil/month)D (Rp0.5-0.7 mil/month)E (Below Rp 0.5 mil/month)* ACNielsen Socio-Economic Survey is based on monthly household expenditure, not actual income. Nostandard can be used (or widely accepted) to calculate direct relation between expenditure and incomeSource: ACNielsenEconomic development in Indonesia has seen a significant increase of the middle class over the past fiveyears. This middle income group is considered one of the vital contributors to the economy and isperceived as the most prospective target in mass consumer markets. Based on the Social EconomicSurvey (SES) by ACNielsen conducted in nine major cities in Indonesia, the share of population of themiddle income group (classified as SES A, B & C) has steadily grown from 50% in 2001 to 64% in 2006. Assuch, it is estimated that the urban middle income population in Indonesia totals approximately 66 millionpeople. This particular group is likely to be considered a major target market for modern retail shoppingcentres.1.9 TourismTourism is an important element of the Indonesian economy and an important source of foreign exchangerevenues. Comprising more than 17,000 islands, with the second longest shoreline in the world, 300different ethnic groups, 250 languages and a year round tropical climate, Indonesia is a major foreigntourist destination.1.9.1 International tourismInternational tourism campaigns have focused largely on tropical coastal destinations such as Bali.Cultural tourism is another important aspect of the industry, with the Toraja, Prambanan and Borobudurtemples, Yogyakarta and Minangkabau being popular destinations for cultural enthusiasts, who are alsoattracted to the many Hindu festivities in Bali.F-20