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Embassy of the Republic of Indonesia
3, Duthie Avenue, Belgravia – PO. Box CY 69 Causeway
Harare – Zimbabwe
Phone : +263 4 251 799 / 250 072
Fax : +263 4 796 586 / 796 587
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Home  About Indonesia Economy |
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ECONOMY & T R A D E
Indonesia has experienced a major transformation in the past decade. Today with its stable socio-political system and a strong commitment to democracy, the country has witnessed a growing influx of foreign investment into the country. Such a trend is expected to continue at a brisker pace in the coming years. This is supported by the present government’s relentless effort to constantly realise investment potential as well as review and make necessary changes on politicise and regulations that may hinder or even slow the investment process. Such revisions are hoped to promote greater realisation and boost the investment climate further, ultimately the nation’s economic growth. Hence, now is the appropriate time to invest in Indonesia which promises and presents abundance of attractive business opportunities.
On the domestic front, while Indonesia is able to maintain macroeconomic stability, higher, better quality growth continues to be hampered by the array of structural problems such as the investment climate, infrastructure, productivity and competitiveness. Part of this is explained by the post-crisis structure of the Indonesian economy, supported more by consumption and exports while investment has had a much less significant role. Te lack of recovery in investment is demonstrated by the diminishing share of investment to GDP, particularly in key sectors of the Indonesian economy such as manufacturing, agriculture and mining. In all of this, inflation behaved differently before and after the crisis with considerably increased volatility in the post-crisis period. This condition of lower post-crisis period. This condition of lower post-crisis economic growth alongside slightly higher inflation is an indication of supply-side constraints impacting aggregate supply, rendering the Indonesian economy more sensitive to price pressures.
In spite of the problems describe above, international investors generally see promise in the business outlook and Indonesia is still regarded an attractive venue for Foreign Direct Investment (FDI). In an UNTACD survey in 2007, Indonesia ranked among the top 15 most attractive countries for FDI. In addition, Indonesia’s rating on FDI performance and potential has seen steady improvement. This is consistent with the progressive improvement in perceptions of risks in Indonesia over the years, as show in the International Country Risk Guide. Furthermore, Indonesia is seems of having a large potential market and healthy business climate.
Indonesian Economic Outlook, 2008 – 20012
The overall forecast is for further improvement in the Indonesian economy in the coming five years with growth in the range of 7.4% to 8.0%. this projection assumes that world economic growth and volume of world trade remain strong alongside sustained high prices for oil and natural gas and non-oil commodities, relative stability in world and Indonesian monetary policy, robust fiscal conditions in Indonesia and rising inflows of FDI in Indonesia.
The major sources of this growth will be significant inflows of FDI stimulated by improvements in the investment climate with FDI reaching 1.5% of GDP in 2012, bringing the share of investments to about 30% of GDP that year. In addition, intraregional trade in the ASEAN and Asia-Pacific is predicted to become a significant source of economic growth in the medium-term. On the domestic front, disciplined monetary policy aimed at safeguarding macroeconomic stability and a continued fiscal stimulus will have a vital role in bolstering Indonesia’s medium-term economic prospects. The above economic growth forecast is clearly as improvement in the investment climate, empowerment of MSMEs, financial sector reform and improvement in infrastructure.
Investments
Generally, investment opportunity in Indonesia is available in abundance. However, certain investments under certain condition and circumstances are unavailable to investors. Therefore every potential investors must pay attention to Negative List of Investment (NLI). Which list investment opportunity that are not permissible.
Foreign Direst Investment (FDI) companies in Indonesia can be established in the form of 100% foreign ownership or in join venture between foreign and Indonesian parties and should be incorporated as an Indonesian limited liability company and domiciled in Indonesia.
To invest in Indonesia, an investor should first look at a so-called “Negative List of Investment (NLI)”. The list contains those business sectors that rare absolutely closed to all domestic as well as foreign investment and those fields of business closed to only foreign investments. The “regulated business sectors” refer to sectors which are still opened to investors if certain requirements are fulfilled, such as partnership with state-owned/local companies, cooperation with small business holders, and located in certain location. The special provisions/term for certain fields of business open to capital investments that must be observed by investment activities in Indonesia as stated in the Capital Investment Implementation Technical Guidance.
Foreign investment approval can be issued by the Investment Coordinating Board (BKPM) in Jakarta.
To apply for a new investment approval, foreign investment applicants are required to complete and submit two (2) copies of form Model I/PMA to BKPM.
Foreign investment approval application documents will then be evaluated in terms of their compliance with various in aspects such as sectoral policies and finance. If further clarifications are still required, a letter will be sent to the necessary additional data and information. Following the evaluation process, the Chairman of BKPM will issue the investment approval and the entire process would take a maximum of seven (7) working days, except for project still need a letter of recommendation from technical department concerned.
Upon the issuance of the investment approval, a foreign investment company can be legally established through the execution of the articles of incorporation in notary deed form.
ECONOMIC OUTLOOK & INDICATORS
Currency : Rupiah (Rp)
Exchange Rate : US$ 1 = Rp. 11.200,-
GDP (purchasing : $ 932.1 billion (2008)
Power parity)
GDP – real growth rate : 5.9% (2008)
GDP - per capita : $ 3,900 (2008)
GDP composition by sector : - Agriculture : 13.5%
- Industries : 18.6%
- Services : 39.3% (2005)
Inflation Rate : 10.5% (2008)
(consumer price)
Main industries : petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber , food products, and tourism.
Industrial growth rate : 2.8% (2008)
Agriculture products : rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra, poultry, beef, pork, eggs.
Exports : $ 141 billion f.o.b (2008)
Exports commodities : oil and gas, plywood, textiles, rubber, electrical appliances.
Exports partners : Japan, Singapore, China, United States, Thailand, Australia, South Korea, India and Saudi Arabia.
Imports : $ 114.3 billion f.o.b (2008)
Imports commodities : machinery and equipment, chemicals, fuels and foodstuffs
Imports partners : Singapore, China, Australia, Thailand, Japan, Saudi Arabia, South Korea, Malaysia and United States.
Indonesia has experienced a major transformation in the past decade. Today with its stable socio-political system and a strong commitment to democracy, the country has witnessed a growing influx of foreign investment into the country. Such a trend is expected to continue at a brisker pace in the coming years. This is supported by the present government’s relentless effort to constantly realise investment potential as well as review and make necessary changes on politicise and regulations that may hinder or even slow the investment process. Such revisions are hoped to promote greater realisation and boost the investment climate further, ultimately the nation’s economic growth. Hence, now is the appropriate time to invest in Indonesia which promises and presents abundance of attractive business opportunities.
On the domestic front, while Indonesia is able to maintain macroeconomic stability, higher, better quality growth continues to be hampered by the array of structural problems such as the investment climate, infrastructure, productivity and competitiveness. Part of this is explained by the post-crisis structure of the Indonesian economy, supported more by consumption and exports while investment has had a much less significant role. Te lack of recovery in investment is demonstrated by the diminishing share of investment to GDP, particularly in key sectors of the Indonesian economy such as manufacturing, agriculture and mining. In all of this, inflation behaved differently before and after the crisis with considerably increased volatility in the post-crisis period. This condition of lower post-crisis period. This condition of lower post-crisis economic growth alongside slightly higher inflation is an indication of supply-side constraints impacting aggregate supply, rendering the Indonesian economy more sensitive to price pressures.
In spite of the problems describe above, international investors generally see promise in the business outlook and Indonesia is still regarded an attractive venue for Foreign Direct Investment (FDI). In an UNTACD survey in 2007, Indonesia ranked among the top 15 most attractive countries for FDI. In addition, Indonesia’s rating on FDI performance and potential has seen steady improvement. This is consistent with the progressive improvement in perceptions of risks in Indonesia over the years, as show in the International Country Risk Guide. Furthermore, Indonesia is seems of having a large potential market and healthy business climate.
Indonesian Economic Outlook, 2008 – 20012
The overall forecast is for further improvement in the Indonesian economy in the coming five years with growth in the range of 7.4% to 8.0%. this projection assumes that world economic growth and volume of world trade remain strong alongside sustained high prices for oil and natural gas and non-oil commodities, relative stability in world and Indonesian monetary policy, robust fiscal conditions in Indonesia and rising inflows of FDI in Indonesia.
The major sources of this growth will be significant inflows of FDI stimulated by improvements in the investment climate with FDI reaching 1.5% of GDP in 2012, bringing the share of investments to about 30% of GDP that year. In addition, intraregional trade in the ASEAN and Asia-Pacific is predicted to become a significant source of economic growth in the medium-term. On the domestic front, disciplined monetary policy aimed at safeguarding macroeconomic stability and a continued fiscal stimulus will have a vital role in bolstering Indonesia’s medium-term economic prospects. The above economic growth forecast is clearly as improvement in the investment climate, empowerment of MSMEs, financial sector reform and improvement in infrastructure.
Investments
Generally, investment opportunity in Indonesia is available in abundance. However, certain investments under certain condition and circumstances are unavailable to investors. Therefore every potential investors must pay attention to Negative List of Investment (NLI). Which list investment opportunity that are not permissible.
Foreign Direst Investment (FDI) companies in Indonesia can be established in the form of 100% foreign ownership or in join venture between foreign and Indonesian parties and should be incorporated as an Indonesian limited liability company and domiciled in Indonesia.
To invest in Indonesia, an investor should first look at a so-called “Negative List of Investment (NLI)”. The list contains those business sectors that rare absolutely closed to all domestic as well as foreign investment and those fields of business closed to only foreign investments. The “regulated business sectors” refer to sectors which are still opened to investors if certain requirements are fulfilled, such as partnership with state-owned/local companies, cooperation with small business holders, and located in certain location. The special provisions/term for certain fields of business open to capital investments that must be observed by investment activities in Indonesia as stated in the Capital Investment Implementation Technical Guidance.
Foreign investment approval can be issued by the Investment Coordinating Board (BKPM) in Jakarta.
To apply for a new investment approval, foreign investment applicants are required to complete and submit two (2) copies of form Model I/PMA to BKPM.
Foreign investment approval application documents will then be evaluated in terms of their compliance with various in aspects such as sectoral policies and finance. If further clarifications are still required, a letter will be sent to the necessary additional data and information. Following the evaluation process, the Chairman of BKPM will issue the investment approval and the entire process would take a maximum of seven (7) working days, except for project still need a letter of recommendation from technical department concerned.
Upon the issuance of the investment approval, a foreign investment company can be legally established through the execution of the articles of incorporation in notary deed form.
ECONOMIC OUTLOOK & INDICATORS
Currency : Rupiah (Rp)
Exchange Rate : US$ 1 = Rp. 11.200,-
GDP (purchasing : $ 932.1 billion (2008)
Power parity)
GDP – real growth rate : 5.9% (2008)
GDP - per capita : $ 3,900 (2008)
GDP composition by sector : - Agriculture : 13.5%
- Industries : 18.6%
- Services : 39.3% (2005)
Inflation Rate : 10.5% (2008)
(consumer price)
Main industries : petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber , food products, and tourism.
Industrial growth rate : 2.8% (2008)
Agriculture products : rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra, poultry, beef, pork, eggs.
Exports : $ 141 billion f.o.b (2008)
Exports commodities : oil and gas, plywood, textiles, rubber, electrical appliances.
Exports partners : Japan, Singapore, China, United States, Thailand, Australia, South Korea, India and Saudi Arabia.
Imports : $ 114.3 billion f.o.b (2008)
Imports commodities : machinery and equipment, chemicals, fuels and foodstuffs
Imports partners : Singapore, China, Australia, Thailand, Japan, Saudi Arabia, South Korea, Malaysia and United States.
ECONOMY & T R A D E
Indonesia has experienced a major transformation in the past decade. Today with its stable socio-political system and a strong commitment to democracy, the country has witnessed a growing influx of foreign investment into the country. Such a trend is expected to continue at a brisker pace in the coming years. This is supported by the present government’s relentless effort to constantly realise investment potential as well as review and make necessary changes on politicise and regulations that may hinder or even slow the investment process. Such revisions are hoped to promote greater realisation and boost the investment climate further, ultimately the nation’s economic growth. Hence, now is the appropriate time to invest in Indonesia which promises and presents abundance of attractive business opportunities.
On the domestic front, while Indonesia is able to maintain macroeconomic stability, higher, better quality growth continues to be hampered by the array of structural problems such as the investment climate, infrastructure, productivity and competitiveness. Part of this is explained by the post-crisis structure of the Indonesian economy, supported more by consumption and exports while investment has had a much less significant role. Te lack of recovery in investment is demonstrated by the diminishing share of investment to GDP, particularly in key sectors of the Indonesian economy such as manufacturing, agriculture and mining. In all of this, inflation behaved differently before and after the crisis with considerably increased volatility in the post-crisis period. This condition of lower post-crisis period. This condition of lower post-crisis economic growth alongside slightly higher inflation is an indication of supply-side constraints impacting aggregate supply, rendering the Indonesian economy more sensitive to price pressures.
In spite of the problems describe above, international investors generally see promise in the business outlook and Indonesia is still regarded an attractive venue for Foreign Direct Investment (FDI). In an UNTACD survey in 2007, Indonesia ranked among the top 15 most attractive countries for FDI. In addition, Indonesia’s rating on FDI performance and potential has seen steady improvement. This is consistent with the progressive improvement in perceptions of risks in Indonesia over the years, as show in the International Country Risk Guide. Furthermore, Indonesia is seems of having a large potential market and healthy business climate.
Indonesian Economic Outlook, 2008 – 20012
The overall forecast is for further improvement in the Indonesian economy in the coming five years with growth in the range of 7.4% to 8.0%. this projection assumes that world economic growth and volume of world trade remain strong alongside sustained high prices for oil and natural gas and non-oil commodities, relative stability in world and Indonesian monetary policy, robust fiscal conditions in Indonesia and rising inflows of FDI in Indonesia.
The major sources of this growth will be significant inflows of FDI stimulated by improvements in the investment climate with FDI reaching 1.5% of GDP in 2012, bringing the share of investments to about 30% of GDP that year. In addition, intraregional trade in the ASEAN and Asia-Pacific is predicted to become a significant source of economic growth in the medium-term. On the domestic front, disciplined monetary policy aimed at safeguarding macroeconomic stability and a continued fiscal stimulus will have a vital role in bolstering Indonesia’s medium-term economic prospects. The above economic growth forecast is clearly as improvement in the investment climate, empowerment of MSMEs, financial sector reform and improvement in infrastructure.
Investments
Generally, investment opportunity in Indonesia is available in abundance. However, certain investments under certain condition and circumstances are unavailable to investors. Therefore every potential investors must pay attention to Negative List of Investment (NLI). Which list investment opportunity that are not permissible.
Foreign Direst Investment (FDI) companies in Indonesia can be established in the form of 100% foreign ownership or in join venture between foreign and Indonesian parties and should be incorporated as an Indonesian limited liability company and domiciled in Indonesia.
To invest in Indonesia, an investor should first look at a so-called “Negative List of Investment (NLI)”. The list contains those business sectors that rare absolutely closed to all domestic as well as foreign investment and those fields of business closed to only foreign investments. The “regulated business sectors” refer to sectors which are still opened to investors if certain requirements are fulfilled, such as partnership with state-owned/local companies, cooperation with small business holders, and located in certain location. The special provisions/term for certain fields of business open to capital investments that must be observed by investment activities in Indonesia as stated in the Capital Investment Implementation Technical Guidance.
Foreign investment approval can be issued by the Investment Coordinating Board (BKPM) in Jakarta.
To apply for a new investment approval, foreign investment applicants are required to complete and submit two (2) copies of form Model I/PMA to BKPM.
Foreign investment approval application documents will then be evaluated in terms of their compliance with various in aspects such as sectoral policies and finance. If further clarifications are still required, a letter will be sent to the necessary additional data and information. Following the evaluation process, the Chairman of BKPM will issue the investment approval and the entire process would take a maximum of seven (7) working days, except for project still need a letter of recommendation from technical department concerned.
Upon the issuance of the investment approval, a foreign investment company can be legally established through the execution of the articles of incorporation in notary deed form.
ECONOMIC OUTLOOK & INDICATORS
Currency : Rupiah (Rp)
Exchange Rate : US$ 1 = Rp. 11.200,-
GDP (purchasing : $ 932.1 billion (2008)
Power parity)
GDP – real growth rate : 5.9% (2008)
GDP - per capita : $ 3,900 (2008)
GDP composition by sector : - Agriculture : 13.5%
- Industries : 18.6%
- Services : 39.3% (2005)
Inflation Rate : 10.5% (2008)
(consumer price)
Main industries : petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber , food products, and tourism.
Industrial growth rate : 2.8% (2008)
Agriculture products : rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, copra, poultry, beef, pork, eggs.
Exports : $ 141 billion f.o.b (2008)
Exports commodities : oil and gas, plywood, textiles, rubber, electrical appliances.
Exports partners : Japan, Singapore, China, United States, Thailand, Australia, South Korea, India and Saudi Arabia.
Imports : $ 114.3 billion f.o.b (2008)
Imports commodities : machinery and equipment, chemicals, fuels and foodstuffs
Imports partners : Singapore, China, Australia, Thailand, Japan, Saudi Arabia, South Korea, Malaysia and United States.
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