Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

Chain links: Global retailers flock to the market in spite of stricter regulations

Although Indonesia’s retail sector was officially added to the government’s negative investment list in April 2014, thereby prohibiting foreign ownership of smallscale enterprises, foreign investment in large-scale operations – particularly in the fast-moving consumer goods (FMCG) segment – has seen a sharp rise in recent years. Most recently, global equity investor Warburg Pincus announced plans to invest $125m in a joint venture to build shopping malls across several Indonesian cities. The nation’s 250m-strong consumer base, expanding middle class, concurrent increase in urbanisation and considerable growth in domestic consumption all offer lucrative opportunities to retail investors and should underpin strong expansion in 2015. Chain Reaction In

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Pham Hong Hai-CEO-HSBC Vietnam

Indonesia’s e-commerce sales rising

E-commerce in Indonesia is expanding as retailers capitalise on a rising middle class, growing demand outside of Jakarta and a tech-savvy population embracing new sales and payment platforms. “It is important to start adopting social media as a stable part of our business strategy,” Henri Honoris, president-director of Modern Internasional, a retail operator and owner of the 7-Eleven franchise in Indonesia, told OBG. While challenges persist as a result of low banking and credit card penetration and an infrastructure deficit, investment in the sector has spiked in recent months in the wake of soaring demand, and future opportunities abound in mid-tier cities, development of new

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Pham Hong Hai-CEO-HSBC Vietnam

Indonesia expanding 4G LTE services

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Indonesia is slated to see its already sizeable base of mobile broadband subscribers expand in the coming years, with the recent rollout of 4G/long-term evolution (LTE) services by the country’s big three operators. That said, operators are facing challenges such as insufficient infrastructure, high capital expenditure requirements and limited available spectrum. The government’s recent move to base its telecoms licensing criteria on service provision, rather than the number of towers and base transceiver stations (BTS) a company owns, could also have a negative impact on revenues, at least in the early rollout of 4G LTE services. It could also prompt a wave of consolidation, ensuring

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George Richani-CEO-Al Ahli Bank of Kuwait

Government initiatives target wider broadband coverage in Indonesia

The government is moving to boost internet usage via an ambitious five-year broadband plan. Acting as one of the country’s first IT blueprints, the plan targets expanding internet access to the most remote rural areas, enhancing e-services across a number of sectors and improving network performance nationwide. The plan has been welcomed by citizens, especially those outside of Java, where infrastructure remains underdeveloped and internet access can be inconsistent at best, although telecoms companies expected to lead the broadband charge have raised questions regarding its viability. Delivering the right incentives and ensuring telecoms policies are designed to support quality service will be critical for the

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Chaim Zach-Managing Director and CEO-Agric International Technology and Trade; Kabiru Rabiu-Group Executive Director-BUA Group; and Aliyu Abbati Abdulhameed-Managing Director

Indonesia’s new regulations expanding opportunities for foreign property ownership

With the sector booming and many more projects still to come as part of Indonesia’s drive to boost its infrastructure, foreign companies are also looking to take a slice of the country’s construction pie. In the past, entering the local market was sometimes considered challenging, but today moves to boost foreign ownership limits and major regional changes are easing the path to the Indonesian market. A. H. Marhendra, president-director of realty firm Springhill Group, told OBG, “Foreign ownership of real estate in Indonesia is not as strict as many tend to believe. There are ways in which this can be possible, but it involves a

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Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

Collaboration between the state and private sector helping to finance construction projects in Indonesia

Despite the major war chest of state funding Indonesia’s government has assembled from fuel subsidy cuts and other revenue raisers, Jakarta is still short of meeting the financial targets necessary to fund its ambitious infrastructure roll out. Finding ways to bridge the gap is thus a key point of discussion in the state capital. That said, one major way to meet this challenge that has already been agreed upon is through the use of public-private partnerships (PPPs). Frameworks The importance of private sector development and

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Azzan Al Busaidi-CEO-Public Authority for Investment Promotion and Export Development (Ithraa)

Benefits and drawbacks to slowing development of shopping centres in Indonesia

Following concerns that a boom in the construction of retail malls was causing increased congestion, as well as threatening the livelihoods of many smaller retail operators, in 2011 Jakarta’s then-governor Fauzi Bowo initiated a moratorium on further mall building. Since then, this moratorium has been renewed by his successors. The freeze on mall development has had a major impact on the modern retail sector in Jakarta, with the supply of new mall space now reduced to a trickle. Indeed, the only entrant in 2014 was the Lippo Group’s St Moritz Mall, boosting Jakarta’s total modern retail space stock to 2.8m sq metres, according to global

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Mark Geilenkirchen-CEO-Port of Sohar

Indonesia’s affordable housing schemes providing a step up

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Unlike other global economies, Indonesia largely surfed over the 2008-09 financial crisis, with the economy bucking Western trends and going into a strong, expansionary mode – chalking up 6.5% GDP growth in 2011 and over 5% growth in the years since. This came in the wake of strong economic growth in the years prior to 2008 as well, leaving the Indonesian per capita income in 2013 at a level five times higher than it had been at the start of the new millennium. Budi Hadidjaja, president-director of Cowell Development, told OBG, “The construction of residential property has been one of the fastest-growing sectors in Indonesia’s

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Éric N’guessan-Managing Partner-EY Côte d’Ivoire

Transport infrastructure a key part of Medan’s development plans

The capital of North Sumatra, Medan, is the fourth most populous city in Indonesia and the largest city outside of Java. Located on the Deli River, which flows into the Straits of Malacca, its trading port has made it a strategic location for most of its history, as well as a gateway to the island of Sumatra. Remnants of architecture reflect Medan’s Dutch colonial past, with City Hall, an iconic water tower and the Titi Gantung bridge acting as reminders of a time when the city was called “the Paris of Sumatra”. These days, Medan is more like the most industrious city in Sumatra. Its

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Daniel Asare-Kyei-CEO-Esoko; Curtis Vanderpuije-CEO-ExpressPay; and Daniel Marfo-General Manager-Zipline Ghana

Altering Bandung’s landscape

The capital of West Java, Bandung, is cool. Not only does it sit at a high altitude and have low average temperatures – 700 metres above sea level and 23°C, respectively – it is also a centre for education, culture and technological innovation. Some 60% of Bandung’s 2.4m people are younger than 40 and they are the main drivers of the city’s so-called “creative economy”, as entrepreneurs in design, clothing, distribution outlets and, of course, music and film. Mission Possible Bandung’s mayor, Ridwan Kamil, is literally the architect of the city’s popularity. An award-winning architect, he was elected as an independent candidate in 2013, and

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