Highlights from The Report: Indonesia 2020
26 Jun 2020
Oxford Business Group has now launched The Report: Indonesia 2020. This 14th edition of the report contains comprehensive analysis of the business trends, opportunities and challenges in South-East Asia’s largest economy. The publication is being welcomed at a time of significant global uncertainty, as economies worldwide begin the cautious process of reopening their economies under the shadow of the Covid-19 pandemic.
Indonesia imposed a lockdown on the capital, Jakarta, from April 10. Safety measures included the shuttering of schools, offices and malls; a ban on gatherings of more than five people; and the reduction of operational hours for public transport. The world’s most populous Muslim nation also mandated the closure of mosques in the city, until early June when the capital began to reopen. The first loosening of restrictions permitted certain establishments – including places of worship, offices, restaurants and grocery stores – to reopen at 50% capacity. While some malls are expected to open mid-June, schools are to remain closed until the end of the month.
The pandemic arrived on the back of a strong performance for Indonesia’s economy, which had maintained a steady growth rate above 5% in 2019. Despite the general election and uncertainty surrounding trade relations between the US and China, the year was characterized by robust domestic consumption and ongoing efforts to reform policy and simplify investment procedures.
This latest report details the landmark omnibus bills proposed by the administration of President Joko Widodo, better known as ‘Jokowi’. These aim to streamline legislation, reduce bureaucracy and improve the investment environment. The publication also explores efforts to improve human capital development – one of the cornerstones of President Jokowi’s re-election campaign – and create a future-ready workforce from Indonesia’s population of 268m.
Indonesia’s digital economy has already attracted international attention, with four ‘unicorn’ start-ups valued over $1bn, plus one ‘decacorn’ that has surpassed the $10bn mark. The future looks set to be even more promising for the country’s burgeoning tech segment, as various homegrown companies have begun to expand beyond the border, while an increasing number of international services providers have selected Jakarta for their first cloud data centres in the region. The Report: Indonesia 2020 analyses the potential for financial technology players to meet the needs of the world’s fourth-largest unbanked population. In the current context, accelerating a shift to digital payment methods is just one example of the potential impact of Covid-19, as detailed within OBG’s latest publication.
With construction and infrastructure development outside of Jakarta on the horizon, including the decision to relocate the capital city to East Kalimantan, investors are increasingly looking beyond Java for promising opportunities. The report outlines President Jokowi’s $412bn investment plans to improve transport infrastructure across the archipelago, and evaluates how far these projects could help decrease logistics costs and create new employment opportunities.
Sourcing the necessary finance may pose a challenge as the global economy re-emerges from the Covid-19 pandemic. This will likely lead some projects and policy initiatives to be temporarily delayed, while the government diverts capital from infrastructure developments to aid the crisis response and recovery efforts.
Nevertheless, Indonesia’s strong foundations, including its burgeoning tech ecosystem, will help maintain momentum in the medium to long term. Meanwhile, the Jokowi administration’s commitment to ongoing reform looks set to continue to improve the ease of doing business and further enhance the appeal of South-east Asia’s largest economy for investment. Read The Report: Indonesia 2020 for an in-depth, on-the-ground analysis of these crucial topics, as well as incisive insights from key private and public sector players.
Click here to read The Report Indonesia: 2020
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