Indonesia

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.