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Indonesia Business
Indonesia Business Overview - TravelPuppy.com
Indonesia Economy

One World Bank official described the catastrophic breakdown of the Indonesian economy in 1997 as ‘The most dramatic economic collapse anywhere in the past five decades’. By 1998, economic output in Indonesia had declined by more than 12 % and the national currency, the Rupiah, lost over 80 % of its value. The financial crash occurred after more than 10 years of uninterrupted growth at between 8 and 10 % annually. In January 1998, the International Monetary Fund was forced into providing its largest-ever financial rescue package, US$ 43 billion, in order to avoid total economic collapse.

Since 2000 Indonesia has experienced a steady annual growth of around 4 %. Inflation hovers at around 7 %, and unemployment remains high at 11 % of the workforce. Only limited measures have been taken to deal with the structural problems which previously plagued the economy. The Suharto old system of ‘crony capitalism’ still is present, and reforms to the country’s financial system have yet to be effected.

Thirty years earlier, as economic expansion began in earnest after the upheavals of the mid-1960's, Indonesia was far less developed than several of its neighbours. However, it was able to exploit its large mineral resources as a foundation on which to build an industrial economy. Natural gas and oil are the most significant raw materials produced by Indonesia; it is 1 of the largest exporters of liquefied natural gas. It is also the 2nd largest producer of tin and extracts huge quantities of other metals and metal ores (bauxite, gold, copper, silver, and nickel) as well as coal and rubber. Much of the processing of these products is done within Indonesia.

The agricultural sector (including forestry and fishing) is significant but more as a source of employment rather than for its contribution to the economy, it accounts for half the work force. The service sector has grown rapidly from the beginning of the 1980's and tourism has become a major industry and an important source of foreign exchange.

Communications, transport, financial services and international freight traffic also made significant contributions. The manufacturing industry, which developed from non-existence in 1965 to its mid-1990's position of providing 1 quarter of economic output. This sector received most of the attention from the Government (as well as outsiders) and announced the country's arrival as a fully fledged ‘Asian Tiger’ economy. Despite the high profile of the aerospace, vehicle and electronics industries, Indonesia’s manufacturing success is rooted in less glamorous areas such as food processing, textiles, tobacco and timber products.

The majority of Indonesia’s trade is conducted within the region, especially with Japan (which accounts for approximately 1 quarter of total trade), Korea, Singapore, Australia and China (including Hong Kong). Outside the region, Germany and the United States of America are its major trading partners.

Business

Business should be conducted through a local agent and tends to be slow. Visiting business cards are widely used. It is customary to shake hands and give a slight bow with the head on meeting and taking leave. Printed materials should be in English, and prices should be quoted in US Dollars as well as Pounds Sterling.

Private office hours: Monday-Friday 08:00-16:00 or 09:00-17:00.

Government office hours: Monday-Thursday 08:00-14:30, Fridays 08:00-12:00.

Commercial Information

The following organisation can offer information and advice:

Kamar Dagang dan Industri Indonesia (KADIN) (Indonesian Chamber of Commerce and Industry)

Address: 3rd-5th Floors, Chandra Building, Jalan M H Thamrin 20, Jakarta 10350

Telephone: (21) 324 000

Facsimile: (21) 315 0241).

Conferences and Conventions

The Balai Sidang Jakarta Convention Centre can hold up to 5,000 people. For assistance in organising a conference or convention in Indonesia, contact the Directorate-General of Tourism or the Indonesia Tourism Promotion Board or a representative IPTO office (see Contact section).
Useful travel links
Business-Indonesia information on business in Indonesia
Business Online Indonesia Business Online web site
Doing Business doing business in Indonesia