Indonesia has emerged as one of the fastest growing economies in the world. While the global economy struggles with high debt and unemployment, Indonesia achieved 6.3% GDP growth in 2012 due to resilient domestic consumption and increased foreign investment. However, bureaucracy, corruption and inadequate infrastructure remain key challenges. With a young population, growing middle class, and strategic location, Indonesia is well positioned to become a global economic powerhouse if it can address these issues and further develop its human resources and connectivity.

1. THE EMERGING INDONESIA
Prof. Firmanzah.,PhD
Pasar Malam Indonesia 2013
Den Haag – Netherland, 20-24 Maret 2013

2. Global outlook
GDP growth by region 2
8.0
6.0
4.0 4.2
GDP groth (% p.a)
3.0
2.0 2.3
1.6
0.0
-2.0
-4.0
-6.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
World North America Western Europe Asia & Australasia (incl Japan) Latin America
Source: Economic Intelligence Unit, March 2012
The global economy is on a narrow path of slow and fragile Oil and commodity prices remain high and will continue to
recovery. Many countries are struggling with a massive put further pressure on the global economy
debt burden and high unemployment persisting to bog
down their economies and hampering growth.

3. Global outlook
3.0% 2.2%
1.8% 1.9%
2.0%
1.0%
0.0%
2011 2012 2013
- 2016
2.0% 1.7%
1.3%
-0.3%
1.0%
0.0%
-1.0% 6.0% 4.3% 4.6%
3.5%
2011 2012 2013 - 4.0%
2016 2.0%
• Asia 6.0% 3.1 4.0
%
4.7
%
0.0%
%
• Australasia 4.0%
2.0%
2011 2012 2013 -
2016
• North Africa and Middle East 0.0%
2011 2012 2013 -
• Sub-Saharan Africa 2016
• Western Europe 4.5% 4.3% 4.2% 6.0% 4.4% 4.8%
3.8%
• and • North America 4.0% 3.6% 4.0%
• and • Latin America 3.5%
3.0%
2.0%
0.0%
2011 2012 2013 - 2011 2012 2013 -
2016 2016
Source: Economic Intelligence Unit, March 2012

4. INDONESIA 2012
Population 2012 257,5 million 60-65% productive age (15-60)
Logistic Performance Index Ranking 2010 --- 2012 75 --- 59
GDP 2012 8.241 trillion IDR = US $ 926 billion
GDP per capita 2012 US $ 3.562
GDP Growth 2012 6,3%
Transortation & Communication Construction Financial real estate Manufacture Agriculture
GDP Structure (6,6 %) (10,45 %) (7,26%) (23,94%) (14,44%)
Trade, hotels & restaurant Services Electricity, gas Mining
by sector 2012 (13,90%) (10,78%) (0,79%) (11,78%)
Transortation & Communication Construction Financial real estate Manufacture Agriculture
GDP Growth (9,8 %) (7,5 %) (7,15%) (5,73%) (3,97%)
by sector 2012 Trade, hotels & restaurant
(8,1 %)
Services
(5,24 %)
Electricity, gas
(6,4%)
Mining
(1,49%)
Private Consumption Expenditure Gross Domestic Fixed Capt. Formation Statistics Discrepantion
GDP Structure (54,56 %) (33,16%) (2,79%)
Government Consumption Expend. Export Import Change in stock
by expenditure 2012 (8,890%) (24,26 %) (25,81 %) (2,16%)
Foreign reserves – Feb 2013 US $ 105,2 billion
Poverty rate - Sept 2012 11,6 % (28,59 million)

5. The archipelago economy:
Unleashing Indonesia’s potential
McKinsey Global Institute,2012

6. GDP NOMINAL & PPP (2011)
Trillion
dollar club
Source: World Economic Outlook IMF, 2012

7.  An uptick in foreign direct investment (FDI) insulated the Indonesian economy from
the impact of slower export growth.
 FDI flows rose 23 percent in the fourth quarter of 2012 to $5.9 billion, pushing FDI in
2012 up 26 percent from the previous year to nearly $23 billion.

8. Economic Performance
( %) ( %) INFLATION RATE (% )
8 GDP GROWTH 16
7 6.9
6.3 6.5 6.3 12.1
6 12
5.2 5.8
5 4.5
8 8.2
4 7.0
4.0 6.65
3 5.8 5.54
5.1 4.61 4.5
3.7 3.79 3.65 3.97
4
2 3.4
3.56
2.8
1
0
0
Jan
Mar
Apr
Feb
Q.1
Q.2
Q.3
Q.4
Q.1
Q.2
Q.3
Q.4
Q.1
Q.2
Q.3
Q.4
Q.1
Q.2
Q.3
Q.4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
LOAN GROWTH RH % grow th ( %) BI RATE
since Jan 08 10
LH o/s in IDR-T
All & PB 9.3
2,500 250%
9
2,000 200% 8.5
1,500 150% 8 8.0
7.8
1,000 100%
7 7.0 6.75
500 50% 6.5
6
0 0% 6 5.75
Jan
Apr
Mar
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Feb
5
2008 2009 2010 2011 2012
Jan
Mar
Apr
Feb
Q.1
Q.2
Q.3
Q.4
Q.1
Q.2
Q.3
Q.4
Q.1
Q.2
Q.3
Q.4
Q.1
Q.2
Q.3
Q.4
May
All Growth all Growth PB
2008 2009 2010 2011 2012
Macro indicators  strong performance
Indonesia’s economy benefitted from resilient consumption spending in a fairly stable
domestic macroeconomic environment

9. …investment grade zone
one of the most
attractiveness country for
foreign investment
 Despite legal and
regulatory risks and
infrastructure
bottlenecks, Indonesia
remains a favored
destination for global
investors, owing to its
relatively high GDP growth
and large domestic market.

10. Indonesia GDP Growth
2001-2012

11. Demography dividend

12. Indonesia has shown economic contraction from 1997-98 crisis but
shown highly resistance from the 2008 global crisis
Source: IMF, CEIC

13. The Largest Economy in South East Asia
and one of fastest growing economies globally

14. The growing of middle class…….

15.  USD 1.8 trillion business opportunity..

16. Less dependency to US and EU

17. Indonesia Outlook 2013

18. Regional outlook 2013
• In 2013, global economic
growth is expected to be
3.75%, with growth estimated
to remain subdued in the US
(1.75%), the eurozone (0.5%)
and Japan (1%).China’s
economy is expected to grow
by between 7.5%-8.5%.

20. The top 3
Year 2012-2013 problems in
Indonesia
Bureaucracy inefficiency
Corruption
Infrastructure
Year 2011-2012
Corruption
Bureaucracy inefficiency
Infrastructure

21. BACKGROUND : HIGHER UNBANKED
• Financial Inclusion Index  Adult has account in formal financial sector
Central Asia &
Eastern
Middle East & Europe
High income North Africa
OECD and non-
OECD
42% 50%
East Asia &
92% Pacific
42%
South Asia INDONESIA
INDONESIA 19.6%
MALAYSIA 66.7%
Sub-Saharan
Africa 22% 20%
PHILIPINA
THAILAND
26.5%
77.7%
12%
VIETNAM 21.4% Latin America and
INDIA 35.2% Caribbean
CHINA
RUSIA
63.8%
48.2% 40%
BRAZIL 55.9%
Source : Worldbank, Global Financial Inclusion Index 2011

22. Engine of Economic development
HUMAN
HARD
RESOURCE
INFRASTRUCTURES
DEVELOPMENT
SOFT
INFRASTRUCTURES
ICT, Bureaucracy, re
gulation

23. Indonesia’s Frontline Global Connectivity
(Indonesia Economic Corridor)

24. THE EMERGING INDONESIA
Prof. Firmanzah.,PhD
Pasar Malam Indonesia 2013
Den Haag – Netherland, 20-24 Maret 2013