Indonesia

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4 Country starter pack Introduction to Indonesia 1. Introduction
Country starter pack Introduction to Indonesia 5 1.1 WHY INDONESIA? OPPORTUNITIES FOR AUSTRALIAN BUSINESSES In an era of rapid change in the world’s economic pecking order, Indonesia is an emerging Asian giant. It is the world’s third-largest democracy (behind India and the United States), the largest economy in Southeast Asia and the 15th largest economy in the world. In recent years, Indonesia’s gross domestic product (GDP) has been growing at more than five per cent annually on the back of: • Stable democratic government • Open trade and investment policies • Increasing domestic consumption • Abundant natural resources • A growing skilled workforce. Indonesia remains at an earlier stage of development than some of its neighbours, which in some respects can make it a more challenging place to do business. For example, its infrastructure is comparatively less developed than other markets in the region, which can add to transport and other business costs. Its legal systems and regulations can also be challenging at times. But profound changes in Indonesia’s economy and society in recent decades have combined to make it an increasingly attractive destination for foreign businesses. And Australia, as a close regional neighbour, is well positioned to take advantage. What, then, are some of the transformational changes to our immediate north that should have Australian businesses taking notice? • Indonesia’s population has passed 250 million, with about half of its people under age 30 • Indonesia has a rapidly expanding population of middleclass consumers, now numbering about 45 million. They are seeking a modern, more Western lifestyle • Indonesia’s GDP has been growing consistently at more than five per cent a year • Indonesia’s GDP per capita is approaching $4356, bringing big changes to patterns of consumer spending, savings and capital formation • Indonesia has developed a stable democratic system of government and a market-based economy that is relatively open to foreign investment and participation • The Indonesian government is committed to significant investment in economic and social infrastructure over coming decades • In its current Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI), the government vowed to streamline the investment and regulatory environment for sectors such as agribusiness, mining and resources, health, education, training and information and communications technology.
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Indonesia

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