Indonesia is the world’s third largest democracy, largest Muslim-majority country, and the eighth-largest economy by purchasing power.
Indonesia is Southeast Asia’s largest economy with a GDP of USD 1,015 billion in 2017 (USD), ranking 8th in the world based on purchasing power parity, and averaging over 5% growth over the last decade.
The Indonesian consumer is ranked as one of the most confident in the world, and approximately 50% of Indonesia’s 262 million citizens are under the age of 30.
Expansion in the retail, health, education, telecom and financial services sector have boomed in the last few years. Emerging opportunities include palm oil, biofuel processing, clean energy and technology to improve local production capacity, and potentially cold storage and fish processing equipment and services.
The business environment in Indonesia is challenging, with Indonesia ranked 72 out of 190 countries in the Ease of Doing Business 2018 report by the World Bank. U.S. firms encounter complex bureaucratic and regulatory requirements which make it time-consuming to enter the market. Although significant anti-corruption measures have been undertaken by the Indonesian government, corruption remains a concern for many businesses looking to operate within Indonesia. Indonesia ranked 96th on Transparency International’s Corruption Perceptions Index 2017.
MISC INVESTMENT FACTS
It possesses the world’s greatest marine biodiversity and its second greatest terrestrial biodiversity. Indonesia also borders the South China Sea, which has the world’s busiest sea lanes -- over $5 trillion in cargo and as much as 50 percent of the world’s oil tankers pass through the South China Sea every year.
A competitive and expanding banking market offers significant opportunities for IT and banking equipment, software and technology providers.
The Government of Indonesia has announced its intention to increase electricity generation by 35,000 MW by 2019. It is not going to meet that goal but growth in power generation projects, conventional and renewable, and including IPPs, is expected to continue for the next decade.
Treaties & Agreements
The United States and Indonesia meet regularly under the 1996 bilateral Trade and Investment Framework Agreement (TIFA). Under the TIFA, Indonesia and the United States work to address bilateral issues and coordinate on regional and multilateral issues
The United States and Indonesia initiated in 2010 a Comprehensive Partnership to foster consistent high-level engagement on democracy and civil society, education, security, climate, maritime, energy, and trade issues, among others. Based on its success, in 2015 the two countries upgraded the relationship to the U.S.-Indonesia Strategic Partnership, extending cooperation to issues of regional and global significance.