Business and Investment Progress in Indonesia

Indonesia with its 260 millions people yet potential market is a perfect place to do business. However, it is not the easiest place to start it. Last year the World bank ranked Indonesia in 91 place for Doing Business Index. The biggest obstacle to pursue business in the biggest archipelago is due to the administration issues, particularly to attain all of the business licences and permits. Although the great will of the President to reform the administration of the country, nevertheless the reality of today is unsatisfying. Thus, it is still necessary to have an excellent network with business actors and government, moreover for the foreign actor. Despite these actual difficulties, it clearly does not discourage the flow of foreign investment to Indonesia that increased 13,2 % from 2016. Therefore, the government of Indonesia would endorse the foreign investment by simplification to deregulation.

The Impact of Maritime Policy of Jokowi

The radical change of Indonesian economy under Jokowi’s government is due to his priority for making Indonesia a global maritime power. This transformation from agriculture to maritime base on the biggest archipelago potentials. For instance, The strait of Malacca only carrying about 40 percent of the world’s trade, more than 50,000 merchant ships ply the waterway every year. First step taken by the government is to maximize the maritime security. Secondly,  one of the key objective of Jokowi is enhancing inter-island connectivity and upgrading port infrastructure within the Indonesian archipelago, which encompasses thousands of islands and spans almost 6 million square kilometers. Many of these islands remain unconnected which means that those islands obliged to be self-sufficient economies, not contributing to or benefitting from national economic production and distribution processes. Thus, this policy has a great impact to Indonesian economy.

The Tip of the Iceberg of Indonesian E-commerce

by FC IMD

E-commerce is not only happening but also predicted by some experts to replace entirely the traditional commerce. In the country where more then half of the population is the active internet users (133 million people), e-commerce is not only a potential but a pressing need. While the consumers of e-commerce in Indonesia grow about 20% per year, the growth of the e-commerce activity reminds much lower with 5% per year. Hence, it seems that Indonesia has only exploited the tip of the Iceberg and still unexplored the bigger bummock of it that will make Indonesia the next e-commerce giant. However, it is predicted that in 5 to 10 years the small and medium business in Indonesia will 100% go online. This small and medium bussiness / Usaha Kecil Menegah (UKM) contribute up to 2% per year of Indonesian economic growth, therefore the growth of e-commerce is essential to support Indonesian government objective to be the middle income country by 2025.    go to website..

Infrastructure : The key of Indonesia’s Economic Progress

by FC IMD

As one of the most dynamic country in Southeast Asia, with around 5% of growth a year, Indonesia needs to improve its infrastructure development in order to support this dynamic. The recent priorities of the Indonesian government is to construct a road in Papua, the electricity power engine in Borneo and the train rail in Sulawesi. For those projects, the government estimates 5.300 billion IDR investment and only 30% of the financing will come from the national budget. Indeed, Indonesian government need private and foreign investment to finalized this infrastructure project in 2020. Under Joko Widodo regime, Indonesia is creating the biggest Infrastructure project of all time. Thus, it is a chance for the investors to increase their investment values in the country.

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