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INDONESIA - COUNTRY BRIEF


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Indonesia is located in Southeast Asia, straddling the equator between Asia and Australia, and between the Pacific and Indian Oceans as well. It is the largest archipelagic country in the world. More than eighty percent of its area is seas and oceans, and of its land area of 1.9 sq km, nearly 5% consist of lakes and rivers. Indonesia lies between latitudes 110S and 60N, and longitudes 950E and 1410E. In terms of land area, it is the 16th largest country in the world. Indonesia shares land borders with Malaysia on the island of Borneo, Papua New Guinea on the island of Papua, and East Timor on the island of Timor. Indonesia shares maritime borders across narrow straits with Singapore and Malaysia, and across seas with the Philippines to the north and Australia to the south, as well as with India (i.e. Andaman & Nicobar Islands territory) to the northwest. Read more on http://www.indonesia.travel/en/facts/about-indonesia

Interactive Map of Indonesia http://www.indonesia.travel/en/map

Indonesia is the fourth most populous country in the world, home to more than 259 million people in 2016. More than eighty-seven percent of its population is Muslim, making Indonesia the largest Muslim country in the world. The nation is highly diverse, however, having more than 300 ethnic groups and speaking in more than 700 ethnic languages and dialects. Read more on http://www.tradexpoindonesia.com/travel/indonesia

According to the constitution, there are six organs of state. Sovereignty in Indonesia is vested in the people, who exercise their will through the People's Consultative Assembly (MPR). Full executive authority is vested in the president, who is elected by and responsible to the MPR. Legislative power is shared with the House of People's Representatives (DPR). The president is advised by the Supreme Advisory Council, whereas the State Audit Board exercises financial oversight. At the apex of the judicial system is the Supreme Court. Read more on http://countrystudies.us/indonesia/84.htm

Indonesia, being the largest economy in South East Asia, has been growing standing over the last few years mostly due to high domestic consumption and growth in exports of manufactured products and commodities. Indonesia has been a WTO member since 1 January 1995 and a member of GATT since 24 February 1950.  More on Indonesia's participation in the WTO https://www.wto.org/english/tratop_e/tpr_e/tp378_e.htm  and Trade Policy of Indonesia https://www.wto.org/english/tratop_e/tpr_e/s278_e.pdf Indonesia is also a member of the Group of Twenty (G20), the Association of Southeast Asian Nations (ASEAN), Organization of Islamic Cooperation (OIC), OPEC and other intergovernmental organizations.

Indonesia within the Association of Southeast Asian Nations (ASEAN)
ASEAN was established on 8 August 1967 in Bangkok by the five original member countries: Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Laos and Myanmar on 23 July 1997, and Cambodia on 30 April 1999. The ASEAN Declaration https://cil.nus.edu.sg/rp/pdf/1967 ASEAN Declaration-pdf.pdf states that the purposes of the Association are:
(1) to accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous community of Southeast Asian nations
(2) to promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries in the region and adherence to the principles of the United Nations Charter Read more on ASEAN Community and Indonesia's role on http://www.aseancenter.org.tw/upload/files/20140528.pdf

GDP Structure
Indonesia is the largest economy in South East Asia http://www.euromonitor.com/indonesia/country-factfile. Industry accounts for the largest share of GDP (46.5 percent of total GDP). Within industry, the most important is manufacturing, which has been one of the main growth engines (24 percent of total output). Mining and quarrying accounts for 12 percent, construction for 10 percent and electricity, gas and water supply for 0.75 percent. Services constitute 38 percent of total GDP. Within services, the most important are: trade, hotel and restaurants (around 14 percent of GDP); transport and communication (7 percent of GDP); finance, real estate and business services (7 percent of GDP) and government services (6 percent). Agriculture accounts for the remaining 15 percent. Read more on  http://www.tradingeconomics.com/indonesia/gdp-growth-annual Considering full year of 2015, the GDP grew by 4.79 percent, fractionally above expectations of a 4.75 percent expansion but marking the slowest growth since 2009. Read more on  http://www.tradingeconomics.com/articles/02052016025009.htm

Foreign Trade
Indonesia recorded a USD375.6 million trade surplus in May of 2016, down sharply from a USD1,141 million surplus reported a year earlier and below market estimates of a USD680 million. In April 2016, trade surplus was downwardly revised to USD662.3 million http://www.kemendag.go.id/en/economic-profile
Sales declined to Japan (-9.43 percent to USD1.01 billion), the US (-5.26 percent to USD1.21 billion), Australia (-33.25 percent to USD239.7 percent), South Korea (-10.84 percent to USD394.5 million) and Taiwan (-26.42 percent to USD250.2 million). In contrast, outbond shipments rose to ASEAN countries (+0.11 percent to USD2.34 billion, the EU countries (+1.04 percent to USD1.23 billion), China (+4.56 percent to USD 1.09 billion) and India (+20.11 percent to USD1.00 billion)  http://www.kemendag.go.id/en/perdagangan-kita/commodity-profile
Balance of Trade in Indonesia averaged 760.76 USD Million from 1960 until 2016, reaching an all time high of 4641.92 USD Million in December of 2006 and a record low of -2329.13 USD Million in July of 2013. Read more on http://www.tradingeconomics.com/indonesia/balance-of-trade

Total Balance of Trade of Indonesia 2011-2016  http://www.kemendag.go.id/en/economic-profile/indonesia-export-import/indonesia-trade-balance
Indonesia | Economic Indicators  http://www.tradingeconomics.com/indonesia/indicators and  http://www.kemendag.go.id/en/economic-profile/economic-indicators

The National Strategic Indicators  http://www.bps.go.id/QuickMap?id=0000000000

Indonesia Infrastructure spend was equivalent to 6.4% of GDP in 2014. The new administration's infrastructure programme is expected to accelerate spending before 2019, peaking at 7.7% of GDP in 2017. As the Indonesian economy matures, infrastructure spend in Indonesia will likely account for a slightly lower proportion of GDP, falling to 5.3% by 2025. Indonesia's share of regional and global infrastructure spend is expected to remain broadly stable throughout the forecast period, at around 4% and 2% respectively. The period of 2015 to 2019 – and potentially beyond – is likely to be a game-changing era for Indonesia's infrastructure sector. Read more on  http://www3.bkpm.go.id/en/investment-opportunities/infrastructure
and https://www.pwc.com.au/asia-practice/publications/pwc_outlook_-_unblocking_the_pipeline_of_infrastructure_projects_c.pdf

Indonesia Monetary Policy Review as of April 2016
To achieve the overriding monetary policy objective that is to maintain the stability of the rupiah, Bank Indonesia has opted for a working framework known as the Inflation Targeting Framework (ITF). This framework was formally adopted in July 2005, and replaces the previous monetary policy using base money as the monetary policy target. http://www.bi.go.id/en/publikasi/kebijakan-moneter/tinjauan/Documents/Monetary Policy Review April 2016.pdf

Monetary Policy Report Quarter IV 2015 
http://www.bi.go.id/en/publikasi/kebijakan-moneter/tinjauan/Documents/Monetary Policy Report Quarter IV 2015.pdf

Indonesia Government Budget Value 2006-2016  http://www.tradingeconomics.com/indonesia/government-budget-value
State Budget (billion rupiahs), 2007-2015  http://www.bps.go.id/linkTabelStatis/view/id/1178
Government Budget and Realization (billion rupiahs), 2007 – 2014  http://www.bps.go.id/linkTabelStatis/view/id/1180

Indonesia Foreign Direct Investment 2010-2016  http://www.tradingeconomics.com/indonesia/foreign-direct-investment
and  http://www.indonesia-investments.com/id/news/todays-headlines/foreign-direct-investment-into-indonesia-grows-19.2-in-2015/item6408

Investment Climate of Indonesia
Indonesia, with its abundant natural resources, young and technically trained work force, burgeoning domestic market, improving investment climate and a higher global profile, is undoubtedly attractive to foreign investors. Foreign investments are made by investors from various countries in various business fields such as mining and energy, financial industries, plantation, telecommunication, media and other sectors. Read more on FDI Overview on http://transasialawyers.com/publicfiles/N2-MelliDarsa-E.pdf  Following Indonesia's economic resilience during and after the global financial crisis, the government is going to continue reforming investment climate to make a safe and attractive investment destination. Read more on 
http://www3.bkpm.go.id/en/investing-in-indonesia/reasons-to-invest-in-indonesia
The investment of foreign capital is now regulated by Law No 25 of 2007 on Investment, which in general provides free inflow of foreign investment being subject only to certain restrictions. Foreign and domestic investors are treated equal in most fields. Incentives to FDIs are further governed by laws and regulations and investment guarantees.
Investment Guide http://www.roedl.com/fileadmin/user_upload/Documents/Regionenbroschueren/2012_neu/investment-guide_indonesia_Roedl-Partner-eng.pdf

The Indonesian Government, giving high priority to nationwide economic and social development, has drafted a number of ambitious objectives that should be reached by the year 2025:
- National LongTerm Development Plan (RPJPN)
http://www.indonesia-investments.com/projects/government-development-plans/national-long-term-development-plan-rpjpn-2005-2025/item308
- National Medium-Term Development Plan 2010-2014 (RPJMN 2010-2014) is the second phase of implementation of the 2005-2025 National Long-Term Development Plan (RPJPN)
http://www.indonesia-investments.com/projects/government-development-plans/national-medium-term-development-plan-rpjmn-2010-2014/item307
- Master Plan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) for 2011-2025 years, which recognizes that higher and sustainable economic expansion requires the country to diversify sources of growth, accelerate infrastructure development, close the development gap between eastern and western regions, improve the quality of human resources, manage rapid urbanization, as well as cope with climate change  http://www.indonesia-investments.com/projects/government-development-plans/masterplan-for-acceleration-and-expansion-of-indonesias-economic-development-mp3ei/item306
Converging Development Agendas: Nawa Cita, RPJMN and SDGs 
http://www.id.undp.org/content/indonesia/en/home/library/mdg/converging-development-agendas---nawa-cita--rpjmn-and-sdgs.html

Tourism in Indonesia  http://www.indonesia.travel/en
Indonesia Travel Guide
Indonesia's unique and cultural heritage, shaped over the centuries by Arabic, Chinese, Indian, Malay, and European influences, has long been attracting visitors from around the world. This cultural fusion is evident everywhere and has shaped both the country's architecture and its diverse visual and performing arts. More on Indonesia Travel Guide: http://www.indonesia-travel-guide.com/


Indonesia Top Tourist Destinations
Indonesia has very beautiful natural wealth. Because of its natural beauty that Indonesia has become a tourist destination that is much coveted by both local and international travelers from around the world. More on Indonesia Top destinations http://www.indonesia-tourism.com/

Travel and Tourism Competitiveness Report 2015 for Indonesia http://www3.weforum.org/docs/TT15/WEF_Indonesia.pdf

Indonesia Tourism Statistics 2011-2016
Tourist Arrivals in Indonesia averaged 730406.80 from 2011 until 2016, reaching an all time high of 915334 in December of 2014 and a record low of 548821 in January of 2011.
http://www.tradingeconomics.com/indonesia/tourist-arrivals

Number of Foreign Visitor Arrivals to Indonesia by Country of Residence, 2002-2014 
http://www.bps.go.id/linkTabelStatis/view/id/1388

 

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Economic Affairs

Embassy of the Republic of Indonesia in Kyiv, accredited for Georgia and Republic of Armenia

August 10, 2016