Credit Management January February 2022

COUNTRY FOCUS
AUTHOR – Adam Bernstein
Officially
Bahasa
Indonesian is
spoken, but so
is Javanese by
70m people,
Sundanese by
20m, Madurese
by 9m and
Malay by 15m.
Brave | Curious | Resilient / www.cicm.com / January & February 2022 / PAGE 25
KEY SECTORS
The Indonesian economy has grown. Data
from Santander – citing the World Trade
Organisation – notes that imports stood
at $172.9bn in 2015 and $210.5bn in 2019.
Exports for the same years were $171.5bn
and $198.5bn.
Indonesia’s key business sectors have
morphed over time away from agriculture.
Data published by Indonesia Investments
cites data that indicates that in 1965, 51
percent of the economy (GDP) was based
on agriculture while just 13 percent was in
industry and 36 was in services. By 1996,
those figures had changed to 16 percent
agriculture, 42 percent industry and 41
percent services.
But with more detailed data available
to it for 2020, Statista says that agriculture
accounted for 13.7 percent of GDP, servicetype
industries contributed 10.93 percent, and
everything else including manufacturing,
construction, mining, transportation, IT,
defence, waste management generated
around 73.37 percent. That’s quite a change
in 50 plus years.
Specifically, for food and drink, Indonesia
possesses a huge domestic market. It is
considered to be the biggest single part of
the economy. Business Indonesia, says that
production of raw material for the sector
in 2019 accounted for around 13 percent of
Indonesia’s GDP – similar to that found by
Statista above. Meanwhile, food-based
manufacturing accounted for 6.4 percent
of GDP and 29 percent of all manufacturing
output.
Consultancy Bright Indonesia says that
the food processing industry comprises
an estimated 5,700 large and mediumsized
producers that employ 765,000 of the
Indonesian population, and 1.6m micro
and small-scale producers with some 3.75m
employees.
Allied to this is the production of palm
oil where Indonesia is the world's largest
producer of what is an important exportgenerating
industry for the country.
Statista believes that in 2020, production
of this commodity amounted to around
48.3m metric tons – up from 26m in 2012.
However, this level of production is causing
concern amongst environmentalists.
Market-Prospects.com, in a July 2021 report,
picked out Indonesia’s other main industrial
segments – and there are a number - and
all are central to the Ministry of Industry’s
Making Indonesia 4.0 Policy. This policy
provides for a super deduction tax relief
with a rate of up to 300 percent to encourage
investment.
Starting with motor, Indonesia is said to
have produced around 690,000 cars in 2020
and sold close to 532,000. However, data from
Statista offers a lower figure for production
continues on page 26 >