Trade & Investment
From The Report: Indonesia 2018
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Consistent, robust economic growth, a 255m-strong population and a favourable position as South-east Asia’s largest economy have driven Indonesia to become an increasingly important actor in global trade. The country’s trade with the US and China has recorded double-digit growth in recent years, and it stands as the largest market for intra-ASEAN investment, with middle-class expansion and a steady rise in domestic consumption expected to keep it at the forefront of the ASEAN trade agenda.

This chapter contains interviews with Thomas Lembong, Chairman, Indonesia Investment Coordinating Board; and Shinta Widjaja Kamdani, CEO, Sintesa Group.

Articles from this Chapter

Overview

Opening doors: New bilateral trade deals and efforts to improve the business climate are likely to lead to rising foreign direct investment
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Consistent, robust economic growth, a 260m-strong population and a favourable position as South-east Asia’s largest economy have driven Indonesia to become an increasingly important actor in global trade. The country’s trade with the US and China has recorded double-digit growth in recent years, and it stands as the largest destination for intra-ASEAN investment, with middle-class expansion and a steady rise in domestic consumption expected to keep it at the forefront of the ASEAN trade…

Interview

Gaining traction: Thomas Lembong, Chairman, Indonesia Investment Coordinating Board, on recent market trends
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Interview: Thomas Lembong How can Indonesia continue attracting investment? THOMAS LEMBONG: Investors make their decisions based on future trends rather than current snapshots, so it is important to improve our long-term outlook. I am confident that Indonesia is moving towards modernisation, rationalisation and internationalisation, and will continue on this trajectory in the coming years. There will certainly be setbacks, but it’s becoming increasingly clear that Indonesia is steadily making…

Analysis

At issue: Ratings upgrades are set to invigorate bond activity
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Sovereign bond issuance is set to accelerate in Indonesia, after global ratings agency Standard & Poor’s (S&P) became the last of the big three international ratings agencies to upgrade its sovereign credit rating to investment grade. The country has made notable progress in improved budgeting practices, cutting spending and launching a bold, broadly successful tax amnesty programme which should significantly augment revenue realisation in the years to come. Its balance of payments…

Analysis

It takes two: A number of significant bilateral agreements are under discussion
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Although Indonesia had announced plans to join the Trans-Pacific Partnership (TPP), a free trade agreement (FTA) encompassing 12 Pacific Rim economies, US withdrawal from the trade pact in late 2016 has pushed the country to refocus its FTA priorities. Trade authorities are now pursuing bilateral deals with actors including the EU, US and Australia. New trade agreements offer the country considerable opportunity to improve export revenue growth, and authorities have made rapid progress towards…

Interview

A shared direction: Shinta Widjaja Kamdani, CEO, Sintesa Group, on increasing collaboration between the government and the private sector
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Interview: Shinta Widjaja Kamdani How do you rate the current level of economic cooperation between the public and private sectors? SHINTA WIDJAJAKAMDANI: We have reached a new partnership level in terms of working with the government. I think the government has recognised the need for business to be involved in creating policy. It is also important for businesses to be involved at the executive level. This administration really believes that what is happening on the ground is important,…

Analysis

Steady progress: Enhancing the business environment remains crucial to attract further investment
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In an effort to push Indonesia’s annual GDP growth to a targeted 7%, President Joko Widodo has announced plans to improve the country’s position in the “Doing Business” report published by the World Bank, with the goal of reaching 40th position globally. Following a bold reform programme aimed at liberalising the economy and reducing investment barriers, Indonesia rose 19 spots to 72nd position in the 2018 survey, recording improvements in multiple categories, including paying taxes,…

Analysis

Fast route: New links between ASEAN countries will reduce transport costs and benefit trade flows
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Indonesia is cementing strong and growing trade ties with the Philippines, following the opening of a new roll-on/roll-off (ro-ro) route, a flagship trade link aiming to boost regional connectivity, reduce travel times and costs, and support ASEAN Economic Community (AEC) integration. The new route offers significant benefits to both countries, and should be an important catalyst for new AEC and bilateral trade growth. BACKGROUND: The ASEAN Highway Network, or the ASEAN Ro-Ro Initiative,…