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Analysis

Seizing momentum: Shortcomings in infrastructure supply are gradually being addressed
OBG
plus

The government is addressing challenges relating to a lack of high-quality infrastructure by encouraging public-private partnerships (PPPs). Infrastructure investment has lagged in recent years, averaging 3-4% of GDP since 2000, well down on the 7% or more from before the Asian financial crisis in the late 1990s. While recent years have seen some spikes, notably in 2009 and 2010, when infrastructure…

Analysis

Opportunities abound: Encouraging private sector investment in the sector
OBG
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Financing the infrastructure sector is a major challenge for Indonesia. The government simply does not have the financial muscle to fund all of the necessary infrastructure projects on its own. According to the Ministry of Public Works, Indonesia requires $192bn of infrastructure investment between 2010 and 2014. The government and state-owned enterprises can only provide around $56bn, so the private…

Analysis

Thorny issue: The rise of smartphones has left one major player seeking to adapt
OBG
plus

The rise of the smartphone has dealt a blow to the fortunes of BlackBerry globally, and it has been hit especially hard in Indonesia. The country was traditionally one of the best markets for the company. BlackBerry’s market share in the country went from less than 10% to almost half the market in two years to 2011. It has now dropped down to about 20%, and is still falling. While the collapse…

Analysis

Towers of strength: Capital-intensive segment could be set to pay off in the coming years
OBG
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Businesses supporting and on the periphery of Indonesia’s telecoms market have been active over the past year as the sector evolved and grew. Firms selling mobile phones or owning and operating base transceiver station (BTS) towers have taken on partners, made significant investments and formed new ventures. These businesses are now in a perfect position to capture growth in telecoms services. Growth According…

Analysis

The promised land: Difficulties around land acquisition remain a significant challenge
OBG
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Investors will risk capital on long-term projects only when they expect to capture adequate returns from their investments. However, they will only do that if they can forecast, with some certainty, the length of time it will take to complete such projects. Since 1993, the Indonesian government has promulgated various regulations on land acquisition hoping this will encourage investors to make long-term…

Analysis

A full plate: The government is working to maintain reliable supplies of rice
OBG
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As the primary food staple for the vast majority of Indonesians, maintaining a reliable supply of rice remains a social and economic priority for the government as a growing domestic population continues to drive demand. In spite of being one of the world’s leading rice producers, the country has been forced to rely on imports to make up the shortfall from domestic production. In 2011 and 2012 the…

Analysis

Getting their hands dirty: Tourism villages and ecotourism expansion
OBG
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Throughout 2014, the Ministry of Tourism and Creative Economy will begin establishing 561 tourism villages in 19 regions across the archipelago, and aim to expand to 1400 in the coming years. An effort to engage the public more directly with tourism, localise sector earnings and maximise authenticity of the tourist’s experience, the ministry will invest RP75m-100m ($75, 000-100,000) in each of the…

Analysis

In need of a boost: Supporting creative industries to improve sector growth
OBG
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As concerns grow that an over-reliance on resource-related exports could see Indonesia repeat the boom-bust cycle of its past, the country is being encouraged to accelerate moves to diversify its economy away from commodities and towards areas such as the creative industries. Two major fashion events, Jakarta Fashion Week and Indonesia Fashion Week, are helping showcase Indonesia’s creative capacity,…

Analysis

Growing interest: The private sector is set to become more involved in the industry
OBG
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While the Indonesian government works to build a universal health care system for its citizens, the private sector is active too. It is sitting on the sidelines waiting to see if the government programme makes sense from a business point of view, but it is still actively building up its capacity and expertise. Private health provision in Indonesia is quickly evolving and could become internationally…

Analysis

Hairpin turns: The road to educational reform has been winding
OBG
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Indonesia has a sizeable higher education system, encompassing some 92 public universities and 3000 colleges. The country has tried a number of different structures in an attempt to make these institutions both financially strong and effective in educating people regardless of economic background. So far, at least, it has not found the right mix of public control and private participation. Measured…