Business & Industry

Oct 1, 2016

INDONESIA IN THE WORLD BANK RANKING DOING BUSINESS

In South-East Asia, between the Pacific and Indian oceans, and between Malaysia and Papua New Guinea, is Indonesia, a very large country, occupying the 15th place worldwide, with 260 million inhabitants spread across 17,500 islands, of which Sumatra and Java stand out.

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More than half of the Indonesian territory is covered in forests and natural parks, representing, like Amazonia, in Brazil, one of the largest areas of environmental protection on Earth. This feature has not prevented Indonesia to develop and to increase its urbanization degree, being that the capital, Jakarta, located at the Java island, has approximately 18.2 million inhabitants in the metropolitan area.

Indonesia has a balanced economy, with more than 100 billion dollars in exchange reserves, an inflation rate of only 6 per cent, and the Public Debt is only 27 per cent of GDP (Gross Domestic Product), thus allowing the country to keep the investment grade rating. The GDP dimension places Indonesia in 9º place among the world's largest economies, exporting more than 150 billion dollars, thus becoming the 30th largest exporting country. Oil, rubber, palm oil, and machinery are the main products that are exported to countries such as Japan, United States of America, China, Singapore, and India.

One of the big advantages of Indonesia is tourism, which this year should increase at a rate of 15 per cent, because the natural beauties of this country attract more than 8 million tourists yearly, predominantly Australians, Japanese, Chinese, and, naturally, Indonesians, given the proximity, but Europeans and Americans as well, fascinated by quality tourist centres, with the world-renowned Bali as one of the principal "exponents".

The region of Bali, with more than three million inhabitants, is a predominant Hindu area in a mainly Muslim country, which shows that this is a country of peaceful coexistence, where it is possible to benefit from pleasant holidays, with all the comfort, and in a friendly and paradisiac ambiance. Although Bali is the better known international reference, there are many other regions in Indonesia that bring in a lot of tourism, especially young people attracted by the tropical climate, the good waves for surfing, scuba-diving in the corals, as well as the food, and the people´s sympathy and warmth. Furthermore, tourists find here the opportunity to know better an Asiatic culture with diversified, special, and genuine features.  

Tourism is of great importance, especially to create employment, showing that Indonesia is organized for welcoming those who visit it, and travel from far away to benefit from this "sanctuary" of the Nature. There are numerous worldwide travel agencies that organize trips for thousands of tourists who want to know Indonesia, its landscapes, and ancient sites, and have a deeper understanding of the culture of the peoples that live in such welcoming islands.

However, Indonesia is not only attractive because Nature. Its economic strength attracts the interest of investors from other continents, mainly for the oil exploration and the production of rubber, textiles, and machinery. The GDP per capita of Indonesia reached USD 11,000 (in terms of power purchase parity), which classifies it as the 15th among Asiatic countries, and 10th in the ranking "Doing Business", of the World Bank, for the region. Taiwan, Japan, Singapore, South Korea, Thailand, Malaysia, and China, among others, are ahead of Indonesia in this ranking.

Independent from Holland since 1949, this country was kept under military dictatorship for some years. As the largest Muslim state, today the country lives in democracy, and it is a member of several important international organizations, such as OPEC (Organization of the Petroleum Exporting Countries), ASEAN (Association of Southeast Asian Nations), and G20, being a partnership of the major countries, and a relevant voice in the big international issues, especially those related with Asia and the Pacific. Its growing political prestige, weight, and economic autonomy have placed Indonesia as a reference among other countries, mainly in Asia, due to its social stability, good public management practices, and growing integration of less favoured segments of the population. In Indonesia several languages are spoken, however, "Indonesian" is the official language, but there is fluency in English within the entrepreneurial community, which facilitates the negotiation of international contracts. Besides, the Government has been adopting incentives for foreign investment, and is the 25th country to attract and support foreign direct investment in various sectors.

Being a highly populated country, with social and political stability, and taking advantage of a favourable geostrategic situation within South East Asia, many international groups look at Indonesia as an ideal location for the installation of industries, and services, having in mind the increasing degree of ongoing economic and customs integration in the free economic zone that is ASEAN.

Your VIP Partner is always attentive to the potential growth of countries that deserve more attention due to the business and investment opportunities that are being created, and it is not possible to ignore the opportunities of this leading country in the Asian continent.

In this territory, the priorities are to ameliorate infrastructures (energy and transports), housing, agriculture, and fishing, as well as the promotion of urban development, the construction of hotels and resorts, the reinforcement of social integration, and the reduction of poverty of the more fragile classes living in remote areas.

It is important to mention that active investors in the country consider that, although complex, Indonesia is an attractive destination for investments. For an objective analysis of the current situation, and for appreciating opportunities, it is recommended to hire specialized consultants or banks with a deep knowledge of the region.

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