Analysis

Natural wonders: Komodo National Park set to drive tourism growth in the region
OBG
plus

After welcoming 8.8m visitors in 2013, Indonesia’s tourism industry is set for further expansion in 2014, bolstered by growing foreign investment in hotel construction. While Bali and Jakarta typically receive most international visitors, the pristine and unique province of East Nusa Tenggara (ENT) is also slated to see its visitor arrivals and regional infrastructure grow, bolstered by the increasing…

Analysis

The main events: Building on strengths in a key high-value niche
OBG
plus

After hosting a number of international events, following the launch of a new national strategy to develop business tourism, Indonesia is becoming a choice destination for the meetings, incentives, conferences, and exhibitions (MICE) segment. Jakarta, Bali and emerging regional centres have expanded facilities to meet demand, with the Ministry of Tourism and Creative Economy (MTCE) designating 2013…

Analysis

Alternate channel growth: Mobile payment systems promise to expand the sector’s reach
OBG
plus

As banks seek to increase efficiency while expanding their reach, Bank Indonesia’s (BI) push towards mobile payments systems holds potential in a country whose under-banked population is spread over some 6000 inhabited islands and is largely rural. Mobile payments hold the promise of cutting costs, expanding access and driving banks’ fee revenue. While telecoms operators’ e-wallet initiatives…

Analysis

Potential risks: Anti-corruption measures may affect private business decisions
OBG
plus

People say that all is fair in love and war, and based on recent examples, it would appear that this true of business in Indonesia as well. There are currently criminal proceedings against at least three big corporations in Indonesia, including Chevron Pacific Indonesia – relating to an allegation of corruption in the firm’s bioremediation projects (“Chevron bioremediation case”); Indosat Mega…

Analysis

Supporting SMEs: Efforts are being made to improve access for smaller businesses
OBG
plus

Accounting for some 91% of employment, 57% of GDP and 20% of exports by value in 2012, according to Bank Indonesia (BI) statistics, micro, small and medium-sized enterprises (MSMEs) form the backbone of Indonesia’s economy. Yet the predominantly informal nature of such companies has constrained their access to funding and scope for growth. Although lending to the segment accounted for roughly 18.63%…

Overview

A crucial time: Parliamentary and presidential elections are set for 2014
OBG
plus

With the year ahead set to see the much-anticipated election of a new president and new national and regional legislatures, 2014 will likely be a time of great political activity in Indonesia. Some 15 parties (three just local to Aceh) will contest for the votes of approximately 175m potential voters, 67m of whom will be casting a ballot for the first time. The elections may also give rise to a new…

Overview

Islands of diversity: A melting pot of cultures and ethnic groups, the nation holds a significant regional role
OBG
plus

While the Republic of Indonesia is less than seven decades old in its current form, the South-east Asian nation of more than 17,500 islands has had a much longer history under other names. In fact, the name “Indonesia” was first used in 1850 by British anthropologist James Richardson Logan as he referred to the extensive group of islands widely known as the Indian or Malayan Archipelago. History Archaeological…

Overview

In it for the long term: Investors are committing to the country for the long haul
OBG
plus

A significant actor in global trade and investment, and a member of the G20 group of the world’s largest economies, Indonesia has achieved a strong record of attracting foreign direct investment (FDI) and rebalancing its trade patterns toward high-growth markets. The authorities have developed new markets for exports while encouraging investment in import-substitution industries. Their key priorities…

Overview

Tighten up: The authorities are taking the opportunity to enact structural reforms
OBG
plus

Following a decade of averaging 6% growth per year, Indonesia’s economy faced both external and internal challenges in 2013. The world’s 16th-largest economy with GDP of Rp8242trn ($824bn) in 2012, which is a fourfold increase in a decade, and the fourth-most populated with 247m citizens, Indonesia has strong fundamentals for long-term growth. While the sharp reversal of foreign portfolio investment…

Overview

Eye on the long term: While the markets are vulnerable to shifts in global risk appetite, the fundamentals supporting growth remain strong
OBG
plus

Over the past decade, Indonesia’s capital markets have gone from strength to strength, buoyed by the commodities super-cycle, sustained economic growth and a resilient domestic consumption story. Long dominated by foreign institutional investment, they remain vulnerable to shifts in global emerging market risk appetite. “We are still in the structural bull market that started in 2003,” Erwan…