121024 aibc murdoch university


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A presentation delivered in Perth on the bilateral business relations between Indonesia and Australia.

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121024 aibc murdoch university

  1. 1. • Population: 241 million• Land area: 1.9 million square km (25% of Australia)• 17,500 islands• 300 ethnic groups 2
  2. 2.  Population: 140 million, thereof approx. 90 million ethnic Javanese (largest ethnic group in Southeast Asia). Size: 126.700 km2 (50% the size of New Zealand). 1000-km northern route (great post road/groote postweg) constructed by Governor General Herman Daendels in 1808 – 1810 in the service of France the island’s main artery to date that produces 26% of Indonesia’s economy. Center of power and economy since colonial times. Javanese culture dominant, particularly during President Soeharto’s 32-year reign. 3
  3. 3. “Doing Business in Indonesia 2010” – The World Bank and IMF 4
  4. 4. “Lowy Institute Indonesia Poll 2012: Shattering Stereotypes, Public Opinion and Foreign Policy” – Fergus Hanson 5
  5. 5. POLITICAL Governments WILL Political Attitude GOAL: Policies and GOOD OF Strategies COMMUNITY(“Negotiating Mining Agreements: Past, Present and Future Trends,” Danièle Barberis, 1998) 6
  6. 6. 1. The economy shall be 2. Sectors of production organized as a common that are important for theendeavor based upon the country and affect the life principles of the family of the People shall be system controlled by the State 3. The land, the waters and the natural riches contained therein shall be controlled by the State and exploited to the greatest benefit of the people 7
  7. 7. Year Era Economy1945-1950 Revolution (War Non-existent against the Dutch)1950-1957 Proto-democracy In shambles Guided Democracy In ruins –1957-1966 (Revolution Ch. 2) inflation 650% Excellent: 7- 8%1966-1998 New Order growth Reformation – seeds1998-2005 of democracy In the Doldrums Respectable: 6%2005- now Nascent Democracy + growth 8
  8. 8. SECTOR PROSPECTS CHARACTERISTICS SECTORS Automotive, cigarettes, High growth, Servicing retail consumers cement, leasing, low risk directly and indirectly pharmaceuticals, packaging, air transport Heavily regulated, strong Infrastructure: toll roads, High growth, parliament roles, need electricity, ports, tap water high risk government guarantees High potential, Palm oil, rubber, cocoa Exported commodities low risk Heavily regulated, legal Oil & gas, mining High potential, uncertainty, regional high risk autonomy issues Low growth, Trade, insurance Steady “annuity” business low risk Low growth, Labor-intensive, competing Textiles, shoes, toys, low-end high risk with China, India and Vietnam electronics“Indonesia: The Road Ahead,” Fauzi Ichsan (June 2005) 9
  9. 9. 7 10
  10. 10. BANKING INSURANCE FMCGANZ, HSBC, CIMB, CIGNA, Prudential, Unilever, Arnott’s, P Commonwealth Manulife, Allianz hillip Morris, BAT LOGISTICS TECHNOLOGY TRAVELSchenker, DHL, Mae Axiata, RIM, Siemen Air Asia, Accor rsk s, GE Group, Aston Group AUTOMOTIVE Toyota (market share > 50%), Honda, Mercedes 11
  11. 11. It definitely is, but you cando (good) business inIndonesia withoutpromoting and resorting tobribery or being otherwiseinvolved in corruption. 12
  12. 12. Middle class group: 50 million + 27th biggest exporter in 2010 Inflation 5.4% (2011)Economic growth in 2011 6.5% - 2012 revised downward to 6.3%Size of economy : US$ 846 billion in 2011, projected to be a trillion dollar economy in 2014 16th largest economy in the world 13
  13. 13. Jakarta Double track Airport served railway 52.4 millionGrowth of air between passengers intravel in 2011 Jakarta – 2011 22% Surabaya ready in 2013 800 new pilots needed Accor to double annually US$ 2 billion number of commuter line from airport – hotels to 100 by 1200 air Jakarta traffic end 2015 operational controllers 2014 needed Aston Hotels Mobile to add 73 newNew car sales telephone hotels (20 in 2012 subscriptions in thereof thisprojected at 1 Q1/2012 255 year) to million units million numbers existing 45 14
  14. 14. • 16th-largest economy in the • 7th-largest economy in the world world • 45 million members of the • 135 million members of the consuming class consuming class • 53% of the population in cities • 71% of the population in cities producing 74% of GDP producing 86% of GDP • 55 million skilled workers in • 113 million skilled workers the Indonesian Economy needed • $0.5 trillion market opportunity • $1.8 trillion market opportunity in consumer in consumer services, agriculture and services, agriculture and fisheries, resources, and fisheries, resources, and education education(“The archipelago economy: Unleashing Indonesia’s Potential – Executive Summary” – McKinsey Global Institute, September 2012) 15
  15. 15. MYTH # 1 MYTH # 2 MYTH # 3 MYTH # 4 MYTH # 5 The Economic Indonesia Resources Growth has Indonesian growth follows are the come mainly Economy is centres on export- economy’s from an unstable Jakarta driven model main driver expanding for growth workforce Indonesia The fastest The main Indonesia’s Indonesia’s had the growing drivers of economy is productiv- lowest urban growth are becoming ity gain has volatility centers are domestic more come in cities with advanced, mostly economic more than consumpt- so its large from growth 2 million ion and endow- improve- compared people services. ments of ment within to OECD (Medan, Ba natural sectors and and BRIC ndung, Bo resources not at the countries. gor and no longer expense of Surabaya). drive econ. employ- developmt. ment.(“The archipelago economy: Unleashing Indonesia’s Potential – Executive Summary” – McKinsey Global Institute, September 2012) 16
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  17. 17. Menara Karya, 10th Floor Suite HJl. HR Rasuna Said Blok X-5 Kav. 1-2 Jakarta 12950 – INDONESIA T: +6221 5794 4694 F: +6221 5794 4696 info@kiroyan-partners.com www.kiroyan-partners.com