Plaza ABDA, Suite 19-D
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Phone: +62 21 5140.1519
Fax: +62 21 5140.1518
Below provides a profile of the Asia / Pacific regional market overall, and interesting facts and information about issues important to both Indonesia and foreign executives working in Indonesia.
From rolling coastal lowlands to interior mountains, with a higher number of active volcanoes than any other country on earth... from the exciting, multicultural capital of Jakarta to the enchanting island of Bali, one of the world's most popular tourist destinations... Indonesia is a country proud of its rich culture and hard-won independence. "Unity in Diversity" is the perfect motto or this archipelago nation, offering unrivaled cultural wealth and geographic variety. It is ideally situated between two booming economies, China and India. And it controls some of the busiest and most important shipping lanes in the world, at the crossroads of the Pacific and Indian Oceans. It's no wonder that Indonesia fared well during the recent global economic crisis, with an economy that stayed strong. It's a market based economy, but the government plays a significant role as the owner of nearly 200 enterprises.
Many experts believe that Indonesia is the next contender for BRICS status, along with Brazil, Russia, India, China, and South Africa -- the world's most significant emerging economies, projected to dominate the future. At present Indonesia is a member of the G-20. Strong domestic demand kept the country afloat during the global downturn, and is now growing faster than ever. In fact, Indonesia is less dependent on exports as compared to some of its neighbors, suggesting a resistance to global economic fluctuations. Indonesia's GDP per capita is consistently among the top in the region, including Singapore, Brunei, Malaysia, and Thailand. Automobiles, technology, electronics, appliances, and textiles and garments are just a few of the industries that have continuously high domestic demand. Service industries, such as banking and related financial industries, telecommunications, retail, hospitality, and airlines have also enjoyed ongoing strength. And the pharmaceutical industry in Indonesia has expanded ot keep up with demand.
The Indonesian GDP and central bank indices continue to grow, and the stock market is posting gains, even while US and European economies continue to struggle. This has attracted hordes of foreign investors. In response, banks are tightening rules on foreign-exchange holdings and other policies in order to curb price advances. Banks have also been hawkish on inflation, watching closely so as not to undermine consumer confidence and domestic spending.
As the economy grows, Indonesia has taken steps to ensure that its large youth population has the necessary skills. More than thirty percent of the entire population is between 19 and 24 years old, a tremendous resource. To this end, the Ministry of Education and the National Development Planning Board is revitalizing over 300 vocational training centers across the nation.
The government has also made a considerable investment to inspire entrepreneurship with a program that gives students two years to pass entrepreneurship courses in their universities and produce a proposal for a start-up business. In the second year of the program, more than 35,000 proposals were submitted. This new generation of executives and managers will inspire a spirit of creativity, innovation, and risk-taking that could take the economy further than ever imagined.
The heart of Indonesia is found in the capital city of Jakarta, the largest city in Southeast Asia and fourth most populous in the world. A sprawling metropolis, Jakarta is being targeted by global businesses looking to establish an Asian foothold. Smart companies are learning that Indonesia may be a low-cost alternative to doing business with China, where growth may be slowing and labor costs are increasing.
To welcome the influx of international business, real estate and infrastructure spending in Jakarta is increasing exponentially. The government has increased its focus and urgency on easing reforms and making a commitment to double spending on roads, ports, mass transit, and airports, and build additional power plants. And all of these vital projects will benefit allied industries including banking, cement and stell factories, road builders and operators, and all manner of construction.
As Indonesia approaches its highest investment grade rating in history, infrastructure improvements will literally ease the way to even higher ratings and increased foreign investment. So native Indonesian organizations are encountering keen competition from foreign companies looking to gain entry into this dynamic market. Boyden, with its established Jakarta office owned and managed by local executives -- and supported by global resources -- can be a perfect partner for any company looking to make the most of the vibrant Indonesian economy.
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