Analysis

Making it work: The government is setting up agencies to encourage investment
OBG
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National leaders have zeroed in on public-private partnership (PPP) deals as their vehicle of choice for building the infrastructure needed to power economic growth. The PPP structure is fairly new, and is often relied on by governments that do not want to incur large debts by borrowing the complete cost of a project. ISSUES: Indonesia has yet to see a PPP through to completion. Many rural areas…

Analysis

Greater connectivity: Building partnerships with the private sector for increased infrastructure development
OBG
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The government is pressing ahead with its liberalisation drive to upgrade physical infrastructure and reduce the cost of doing business for the nation’s dynamic private sector. The Regional Long-Term Development Plan, (Rencana Pembangunan Jangka Menengah, RPJM), running from 2005 to 2024 in a succession of fiveyear strategies, provides the umbrella for developing and integrating the four main…

Analysis

Plug in, switch on: The market for electronics is growing quickly
OBG
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Both manufacturing and retail is growing in Indonesia, due to a burgeoning domestic market and increasing cost competitiveness. But to make the sector competitive with rivals from ASEAN and other Asian countries, the government needs to improve the investment regime. “The country’s overall atmosphere for investment is positive, garnering the attention of a number of electronics manufacturers…

Analysis

On the market: Several developers are listed on the Indonesia Stock Exchange
OBG
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Not all of Indonesia’s leading developers are publicly traded, but at present there are 21 stocks listed in the property, real estate and construction sector on the main trading board at the Indonesia Stock Exchange. This, alongside several other factors, means the outlook for 2011 is good. The group’s performance has been slightly less robust than that of the overall market in the first half…

Analysis

Liberalised but protected: Shipping law introduces new cabotage rules and welcomes private sector participation
OBG
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The year 2011 marks the implementation of the 2008 shipping law, a far-reaching reform of maritime transport that provides space for private sector participation in infrastructure development. Yet the rules also include a degree of protection in that they require domestically flagged vessels to ship goods across the archipelago. “There is a clear dichotomy in the law: while it protects the interests…

Analysis

Roadrunners: Buying an automobile is an option for increasing numbers of citizens
OBG
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With demand growing for all kinds of vehicles, Indonesia’s automotive sector is fast becoming a major international player. As economic expansion puts more money in people’s pockets and bank lending becomes open to an increasing numbers of citizens, vehicle sales look set to continue a rapid rise for many years to come. Meanwhile, Indonesia’s international status as an automotive centre is…

Analysis

Outside looking in: Reforms to laws could see foreign investment bolster the economy
OBG
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Real estate professionals in Indonesia are convinced that one of the biggest things the government could do to juice the market is to lift restrictions on foreign ownership. Several such limitations in existence have put a lid on market returns and growth potential, they say. It is a tough call. Foreign ownership of real estate assets, particularly in prime locations such as central Jakarta, Bali’s…

Analysis

Putting it all together: Cement companies are preparing for significant growth
OBG
plus

There should be major growth for the foreseeable future in Indonesia’s cement market, as the country ramps up an infrastructure-building drive, addresses a housing shortage and attempts to match demand in one of the world’s most populous countries. Per capita consumption was about 165 kg in 2010, which is low compared to other developing markets – it is about 1000 kg annually in China and…

Analysis

On the move: Addressing bottlenecks in the competitive logistics industry
OBG
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Strong domestic market growth has been a boon to Indonesia’s logistics industry. Although the concept of “just-in-time” may seem inappropriate given congestion levels, the sector has grown on average 7.7% annually over the past seven years, showing its resilience to the recent global economic crisis. If the government is successful in improving the nation’s hard and soft infrastructure,…

Analysis

Rise in the skies: Increasing airport capacity as passenger numbers grow
OBG
plus

Domestic passengers have been the main drivers of growth in air transport for the past decade – more than 52m Indonesians were expected to fly domestically in 2011, around half of which on a single low-cost operator, Lion Air, which also runs Wings Air. Sustained competition in the low-cost segment has continued to keep rates low, while rising disposable income levels are set to sustain growth…