International Businesses (172)

1. Promoting and Attracting FDI
towards
Indonesian Tourism Industry

3. BorobudurtempleinCentralJavaisthelargestBuddhisttempleintheworld,
decoratedwith2,672reliefpanelsand504Buddhastatues.
5 Interesting Facts About
Indonesia

4. Indonesia has the second longest coastline in the world (over 54,000km)

5. The world’s largest flower, Rafflesia Arnoldi, weighs up to 7 kg (15 pounds)
and only grows on the island of Sumatra, Indonesia. Its petals grow to 0.5
meters (1.6 feet) long and 2.5 cm (1 inch) thick.

6. Lake Toba is the largest volcanic lake in the world. The lake’s supervolcanic
eruption that occurred 70,000 years ago was the largest known explosive
eruption on Earth in the last 25 million years. According to the Toba catastrophe
theory, it killed most humans living at that time.

7. The Grasberg mine, located near Puncak Jaya, is the largest gold mine and the
third largest copper mine in the world.

8. • Capital- Jakarta
• Shareland border with Papua NewGuinea, East Timorand the eastern
part of Malaysia.
• Neighboring countries-Singapore, Vietnam, Philippines.
• Indonesia has vast areas of wilderness that support the world's third
highest level of biodiversity. Thecountry has abundant natural resources
like oil and natural gas, tin, copper andgold.
• Agriculture mainly produces rice, palm oil, tea, coffee, cacao,medicinal
plants, spices and rubber.
• Indonesia’s major trading partners are Japan, the United States, China
and neighbors Singapore, Malaysia and Australia.
Indonesia Insights

9. Thelargest Muslim population in a country is in
Indonesia.87.2% of Indonesian population
identifying themselves as Muslim.
 Islam (87.2%)
 Protestantism (7.0%)
 Roman Catholicism (2.9%)
 Hinduism (1.7%)
 Buddhism (0.7%)
 Confucianism (0.05%)
 Others / Atheism / None (0.45%)
Religion
Borobudur temple

10. Languages
 Javanese
 Malay
Also, 700 others
languages
National language is :
‘Indonesian’

11. Traditional
Food
Nationalfood–NasiGoreng
Most famousfruit- Durian
Gadogado Krupuk
Padangcuisine
Indonesiancuisine

12. Culture
An avenue
of Tongkonannhouses in
a Torajann village.
‘Gamelan’ famous
musicinstrument .

13. Handicrafts
Indonesia is considered as the home of
worldhandicraft.
AnAsmat
Woodcarver
Asmat Shields.

14. ‘Peci’ Indonesian men’s Cap Girl’s dress Kebaya
National Uniform

15. Education
National education budget (2017)
IDR 416.1 trillion
USD 31.2 billion
Total 92.81%
Male 95.59%
Female 90.07%
Literacy

16. 78
14
46 48
62
38
0
10
20
30
40
50
60
70
80
90
Power Distance Individualism Masculinity Uncertainty
Avoidance
Long Term
Orientation
Indulgen
hofstede dimensions of Indonesia

17. Indonesialies between latitudes11°Sand6°N,andlongitudes95°Eand141°E.It is thelargest
archipelagic countryin theworld,extending 5,120kilometres(3,181mi) fromeast towestand
1,760 kilometres(1,094 mi) fromnorthtosouth
Geographic Location

18. Key
Resources
Cocoa
Tin
Coal
Natural Gas
Palm Oil
Rubber
Bauxite
Nickel
Gold

19. • Theeconomic history of Indonesia is shaped by its geographic location, its natural
resources, as well as its people.
• By the early 17th century, the Dutch East India Company, oneofthe earliest
multinational company in world's economic history, has established their base in
Indonesia.
• By the early 21st century, Indonesia rose to bethe largest economy in Southeast Asia, as
one of the emerging marketeconomies of the world, a memberofG-20 major
economies and classified as a newly industrialized country.
Economic Background

20. 62
63
64
65
66
67
68
69
70
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Timeline: 2006-
IndexPoint
Labor Participation

21. 6.24
5.7
5.5 5.5
5
5.2
5.4
5.6
5.8
6
6.2
6.4
2012 2014 2016 2017
Unemployment RateIndexPoint
Timeline:

22. 126.5 127 127.5 128 128.5 129 129.5 130 130.5
Jan, 2017
Apr, 2017
July, 2017
Oct, 2017
Consumer Price IndexTimeline:Jan,2017-Oct,2017
Index Points

23. Australian
32%
Chinese
16%
Japanese
8%
Malaysian
8%
South Korean
5%
Taiwanese
5%
French
5%
Singaporean
5%
British
5%
American
4%
German
4% Russian
3%
Percentage
of Visitors
Australian Chinese Japanese Malaysian South Korean Taiwanese

24. Adaro Energy, Unilever
Bank Mandiri, Bank Rakyat
Indonesia, Bank Central Asia,
Telekomunikasi Indoneisa
Domestic
Company
Foreign
Company

26. FFFDI Inflows by Country In 2016
31.70%
18.60%
9.20%
7.80%
singapore
Japan
China
Hong Kong

27. MaMain Invested Sectors in 2016
13.40%
10% 9.60% 9.50%
Machinery,
Metal and
Electronics
Chemical and
Pharmaceutical
Industry
Paper and print
industry
Mining

28. ECONOMICALLY
INTEGRATED
GROUP
INDONESIA
AFTA
ASEAN
AEC

29. Benefits of Economic Integrated Group
• Increase foreign multinational
factories.
• Increased export value.
Export
• Free trade.Import
• Increase banking system
durability.
• Increase banking intermediation.
Financial
sectors

30. • Increase of net export.Agriculture
• Expansion of steel market.
• Better procurement of
materials.
Construction
and
Infrastructure
• Free flow of skilled labor.Labor

31. Corruption Perception Index
Indonesiascored 37pointsoutof100onthe 2016CorruptionPerceptionsIndex reportedby
TransparencyInternational.
CorruptionIndexin Indonesiaaveraged25.28Pointsfrom1995until 2016,reachinganall time high
of37 Pointsin 2016andarecordlowof17 Pointsin 1999.

32. Beneficial Foreign Direct Investment Policies
 Equal treatment of domestic investors andforeign investors. However, there are
limitation on investment in certain strategic sectors or in reserved to develop local
small and medium business players.
 To shorten the length of time required todo business in Indonesia, a one-stop
integrated serviceis beingdeveloped both by the central government and
regional government to simplify the licensing process.

33.  A foreign investor is giventhe right to employ expatriates in certain positions by
obtaining the proper permit and fulfilling the obligation toimprove skills and expertise
of local manpower through training.
 Foreign investor is given the right to employexpatriates in certain positions by
obtaining the proper permitand fulfilling the obligation to improve skills and
expertise of local manpower through training.
 TheIndonesian government will not perform nationalization of foreign investments
unless based onthe Law. In the case ofnationalization, the government shall
providecompensation based on marketvalue.
Beneficial Foreign Direct Investment Policies

34. The Indonesian government ensures the right of foreign investors to repatriate
profit from Indonesia which can be in the form of payment of dividend,
reduction of capital, payment liquidation proceeds or payment of royalties or
technicalfees.
Certain investment facilitiessuchas taxfacilities can be granted based on
certain investment criteria. Examplesinclude absorbing a large number of
manpower, includedin high priority scale business, infrastructure
development
Beneficial Foreign Direct Investment Policies

35.  Not all types of business are openfor foreign investors.Presidential Regulation No.
36/2010 has been issued tostipulate the lines of business open and closed to foreign
investors (Negative List of Investment/NLI).
 A certain privilege is given to investors from ASEAN countries wherethe NLI, based on
ASEAN agreement,can provide a higher shareholding percentage comparedto
investors from othercountries.
 TheNLI will bereviewed everythree years to accommodatethe recent business
updates. As of the beginning of 2012, goverment has set out a policy for a minimum
investment ofIDR10,000,000,000 oran amount equivalent toUS$1,075,000 (using
1US$ = IDR9,300)
Restrictions of
Foreign Direct Investment Policies

36. Why to Invest in Indonesia?
 Indonesia is home to the world’s fourth largest population with around half of its
residents under the age of 30
 Indonesia has outpaced its regional neighbors in recent years, with its economy
having averagedover 5percentannual growth since 2000
 Indonesia’s GNI percapita was over USD10,500 in 2015, considerably higher than
the average for lower middle income nations (around USD6,000). This is bringing
significant changestoconsumer spending, saving andcapital formation patterns

37.  Indonesiahasdeveloped astabledemocraticsystemofgovernment anda market-basedeconomy
thatis relatively open toforeigninvestment andparticipation
 The IndonesianGovernmentcommitted historicallyhigh levels ofinvestment in
economicandsocialinfrastructurein 2016.
 Indonesiaboastsone ofthe region’s mostrapidlyexpandingmiddle-classes,withpurchasingpower
forecasttogrow strongly.

39. Indonesia Tourism Opportunity
With increasing numbers of foreign visitor arrivals (both tourists and foreign
businessmen) in combination with +5 percent GDP growth and investment growth,
there is growing demandfor hotels, condominium hotels (which combine features of
apartments and hotels), as well as conferences and exhibition venues.
If thegovernment targetofwelcoming 20 million foreign visitorsby2020is
indeedachieved then thereis plentyofneed forinvestment in thecountry's
hospitalityindustry
Moreover, the ASEAN Economic Community(AEC), whichwill see its birth at the end of 2015,
implies intensifying trade relations in the ASEAN region(resulting inmore demand for hotel
accommodations etc).

40. In 2015 the Indonesian government granted an additional 45 countries visa-
free access to Indonesia (Presidential Regulation no.69/2015 on Exemptions
of Visit Visa) in an attempt to boost the tourism industry.
Meanwhile, the government also introduced a new regulation on yacht and cruise ships.
This new regulation lifts cabotage rights for international cruises and yachts, meaning
that international cruise liners can now lift and disembark passengers in 5 Indonesian
seaports: Tanjung Priok (Jakarta), Tanjung Perak (Surabaya), Belawan (Medan), Soekarno-
Hatta (Makassar) and Benoa (Bali). Previously, only Indonesian-flagged ships were
allowed by law to lift and disembark passengers in Indonesian waters.

41. Risks
Athough Indonesia harbors great attractions for tourists - beautiful countryside,
interesting cultures & historical remnants, beaches, nightlife (Jakarta and Bali),
and much more - the country fails to attract a large number of foreign tourists..
Yes, Indonesia may achieve its target of welcoming 10 million foreign visitors in 2015, but
this figure is considerably lower than the number of tourists that visit neighboring peers
Singapore (15 million) or Malaysia (27 million). Indonesia is not less beautiful nor less
interesting than its neighbors

42. Recommendations
Environmental
Sustainability
ProtectionofEndangeredSpecies StoppingDeforestations
WorldEconomicForum'sTravel & Tourism
CompetitivenessReport
Intra& InterIsland
Connectivity
SecurityandSafety
English Speakers