Investing in Indonesia’s new political landscape

Investing in Indonesia's new political landscape

The election of Joko Widodo has marked an inflection in Indonesian politics which could also bring new solutions for its infrastructure needs, endemic corruption and growing inequalities. This report provides some perspectives on how to approach business and investment in this new Indonesia.

For a more comfortable reading, it is quite suggested to open the report in full screen!

Investing in the new Indonesia – summary

Preface – page 1

Author biographies – page 2

1. Reform or conform: Indonesia’s political landscape – page 3

Jack Hewson, contributing editor, The Economist Intelligence Unit

  • Much to do – page 3
  • Mind the gap – page 4
  • Widening gap – page 4
  • Policy obstacles – page 5

2. Promoting policy certainty, unlocking investment potential – page 7

Wijayanto Samirin, co-founder and managing director of Paramadina Public Policy Institute, and economic advisor to Vice President Jusuf Kalla

  • Unlocking Indonesia’s potential – page 7
  • Inward FDI – page 7
  • Proper policy process – page 8
  • Lack of policy applicability – page 8
  • Foreign ownership – page 9
  • Maximum foreign ownership limits, % – page 9
  • Regulation – page 10
  • The next five years – page 11

3. Regulation and economic nationalism in Indonesia: The investment impact – page 13

Keith Loveard, senior analyst, Concord Consulting

  • Encouraging signs? – page 13
  • Nationalism is beyond Indonesia’s means – page 14
  • The mineral ore export ban – page 14
  • The new administration’s policy direction – page 15
  • Factors beyond central government control – page 16

4. Indonesia’s logistics services sector: The key to boosting growth potential – page 17

Josephine Bassinette, manager, operations and portfolio, World Bank Indonesia

  • Dwelling on it – page 18
  • Invest or unblock – page 19
  • Can the prices be the same in Java and in Papua? – page 20
  • What then for the fisherman? – page 21

5. Moving up the value chain: the rise of Indonesian manufacturing – page 23

Destry Damayanti, executive director, Mandiri Institute

  • Manufacturing has not kept up – page 23
  • De-industrialization by the numbers – page 23
  • Three strategies to improve manufacturing – page 24
  • Legislating change – page 25
  • Two challenges to reviving manufacturing – page 26

6. Working towards a sustainable future for Indonesia’s rural economy – page 27

Steve Rhee, programme officer, natural resources, Ford Foundation

Presentation from February 2015 by the Economist Intelligence Unit

Leave a Reply

Your email address will not be published.