Embassy of the Republic of Indonesia in Pretoria 949 Francis Baard Street, Hatfield, Arcadia, Pretoria-South Africa Indonesian Trade Promotion Centre ITPC Johannesburg
Structure of Presentation Country Overview Bilateral Trade Opportunity Investment Opportunity
1. Country Overview
What Do You Know about Indonesia? Source: http://www.gocomics.com
Indonesia 1. 4 th Most Populous Country in The World 2. Population of more than 262m People 3. 17,504 Islands 4. One of the Largest Economy in the World 5. Top Investment Destinations 6. Young Population Median Age of 29 Years Old 7. Recognition from reputable international rattings agency
INDONESIA MACROECONOMIC PERFORMANCE IN THE PAST FEW YEARS Macroeconomic indicators have improved significantly Indonesia successfully maintaining the growth momentum in 2017 1 AN INVESTMENTGRADE COUNTRY 5.6% GDP growth (% yoy) Current Account Deficit (% togdp) Latest rating and outlook Feb-17 : Upgraded from Stable to Positive 5.0% 4.8% 2013 2014 2015 5.0% 5.1% 2016 2017F -1.80% -2.65% -1.65% -2.03% -3.19% -3.09% 2012 2013 2014 2015 2016 3Q17 May-17 : BBB- from BB+ Dec-17 : BBB from BBB- 8.1% Inflation (%) 8.4% 3.0% 3.4% 3.6% Trade balance (Usd bn) 7.67 9.42 (2.20) (4.07) 12.02 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Source: Statistic Indonesia
Improvement in inequality ratio and competitiveness 2 Indonesian Government continues to lower inequality ratio and improve competitiveness index Unemployment Rate 2012 5.94 % 5.61% Rank 50 2017-18 2012 2014 2017 0.406 0.393 DwellingTime 2014 Rank 36 6.94 days Tanjung Priok Port Source: BPS, BI, WorldBank,BKPM Energy Subsidy Poverty Rate 2016 Global Competitiveness Index 2012-13 Gini Ratio 2016 2014 11.7% 10.7% Investment Realization 2017 2014 2016 <3 days 463.2 612.8 In IDR tn 3.24% 2017 0.86% Ratio to GDP Electrification ratio 2014 2017 81.5% 93.1%
Global Growth Over the next 3 (three) years (2017-2019), it is estimated that $75 trillion global economy will expand by another $6.5 trillion in size. Here are the top-5 economies that will generate that growth (%): Source: WEF (https://www.weforum.org/agenda/2017/10/these-countries-are-leading-the-way-on-growth)
20 19 18 17 16 15 14 13 12 11 10 20 19 18 17 16 15 14 13 12 11 10 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 Rank of GDP GDP rank 2016 (Billions of US dollars) GDP rank 2016, PPP based (Billions of US dollars) United States China Japan Germany United Kingdom France India Italy Brazil Canada Korea, Rep. Russian Federation Spain Australia Mexico Indonesia Turkey Netherlands Switzerland Saudi Arabia 4,940 3,478 2,648 2,465 2,264 1,859 1,796 1,530 1,411 1,283 1,237 1,205 1,047 932 864 777 669 646 11,199 18,624 China United States India Japan Germany Russian Federation Brazil Indonesia United Kingdom France Italy Mexico Turkey Korea, Rep. Saudi Arabia Spain Iran, Islamic Rep. Canada Thailand Australia 8,718 5,267 4,041 3,397 3,147 3,037 2,828 2,774 2,324 2,280 1,941 1,832 1,760 1,693 1,605 1,598 1,167 1,129 21,451 18,624 Source: World Bank, World Development Indicators online, downloaded on January 15, 2018.
10 8 INDONESIA ECONOMIC OUTLOOK IN 2018 economic growth projected to rise higher in 2018, supported by the continuity of growth momentum across all sectors World Advanced economies Emerging market and developing economies Indonesia 10 8 6 6 4 4 2 0 6.38 2010 6.17 2011 6.03 2012 5.56 2013 5.01 2014 4.88 2015 5.03 2016 5.07 2017p 5.40 2018p 2 0 2018 macroeconomic i ndicators GDP Growth (%) 5,4 Exc. Rate (IDR/USD) 13.400 Oil Price US$/ barrel 4,8 Gas Lifting (thousand BOPD) Inflation (%) YoY 3,5 Int. Rate (%) 5,4 Oil Lifting ( thousand BOPD) 800 1.200
112,494 35,770 Indonesia is also expected to have a growing digital infrastructure going forward Fiber Optic Network (km) 126,545 136,835 44,650 64,670 64,670 153,600 158,840 64,802 76,724 81,895 86,665 88,930 99,340 85,420 39,022 103,289 54,895 BTS numbers 129,033 78, 689 152,191 101,865 175,127 128,002 46,398 48,394 50,344 50,326 50,326 85,946 HotspotWi-Fi 212,275 246,253 362,121 479,121 11 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Domestic (Km) International (Km) 2G 3G/4G Number of Regency / City that are connected with fiber optic Number Homes passed Fiber to the Home (mn) 128 107 90 74 57 379 400 424 440 457 6.6 9.4 15.5 17.2 19.8 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 ource: Statistic Indonesia Fiber Optic Satelite
Digital Economy Basis POPULATION INTERNET USER SOCIAL MEDIA USER MOBILE SUBSCRIPTION ACTIVE HANDPHONE USER 262.0 m 132.7 m 106.0 m 371.4 m 92.0 m Sumber: We Are Social: Digital in 2017-Southeast Asia 30
Population and Social Media World rank As of Population 4 th 2018 Active users 4 th April 2017 Active users 3 rd May 2016 Active users 4 th Q4 2016
Conducive Environment Underpinning Strong Growth Fundamentals
2. Bilateral Trade Opportunity
Indonesia - South Africa Relations Indonesia and South Africa have been enjoying cordial relations in the last couple of years. Both have signed Plan of Action 2017-2021 for the Implementation of the Joint Declaration on a Strategic Partnership for a Peaceful and Prosperous Future between the Government of Indonesia and the Government of South Africa
Both are are endowed with natural resources and have capacity to expand economic cooperation in various sectors such as infrastructure, energy, manufacturing, and services. Source of cartoon : www.dreamstime.com
Indonesia South Africa Trade Performance (Non-oil and Gas) 1,800.00 1,600.00 1,400.00 1,200.00 1,000.00 800.00 600.00 400.00 200.00 - Source: Ministry of Trade of the Republic of Indonesia, 2017 2012 2013 2014 2015 2016 Jan-Jul 2016 In US$ millions Jan-Jul 2017 EKSPOR 1,650.30 1,270.08 1,379.08 665.62 727.63 429.43 398.02 IMPOR 660.44 623.57 477.43 230.64 289.71 153.24 214.41 NERACA PERDAGANGAN 989.86 646.52 901.65 434.98 437.92 276.19 183.61 Indonesia and South Africa total trade is decreasing in the last 5 years. The highest export from Indonesia to South Africa recorded for US$ 1,650 millions in 2012. Indonesia is having a trade surplus with South Africa for US$ 183.6 millions for Jul 2017 period. Still a lot of room of opportunities to increase Indonesia s export to South Africa.
Indonesia s Export Products to South Africa 2016 period 1 Palm oil - USD 166,80 juta (24,48%) 2 Jewelry - USD 118,68 juta (17,42%) 3 Passenger Cars - USD 40,05 juta (5,88%) 4 Palm Kernel - USD 23,64 juta (3,47%) 5 Natural Rubber - USD 22,42 juta (3,29%)
Indonesia s Import products from South Africa 2016 period 1 Chemical Wood Pulp - USD 113,79 juta (41,70%) 2 Gold - USD 28,81 juta (10,56%) 3 Ferrous Waste and Scrap - USD 13,05 juta (4,78%) 4 Copper - USD 12,53 juta (4,59%) 5 Pears - USD 10,47 juta (3,84%)
Indonesian Companies Looking For Partnership in South Africa Food and Beverage Industry Coffee Industry Tyre Products High Voltage Cable Automotive Spareparts Textile products T-shirt Shoes Company Batik Shirt Cleaning products Spices Furniture And many others.
Indonesia is willing to participate in Business Gathering dan Instore Promotion Festival and Trade exhibition Getaway Show Save Date - Big Event : Trade Expo Indonesia (October 2018 - Jakarta, Indonesia) Indonesia Africa Forum (commencement on 10-11 April 2018 and will be organized annually in Bali Indonesia) Source of cartoon: http://www.globaltimes.cn
FUTURE TRADE COOPERATION During the 3 rd JTC (Joint Trade Commission) both country have agreed to conduct a joint feasibility study in having Preferential Trade Agreements with SACU (Botswana, Swaziland, Namibia, Lesotho, and South Africa). Cooperation Initiatives between Indonesia and South Africa to establish Indonesia - SACU (Southern Union Custom African) Preferential Trade Agreement needs to be realized to improve trade performance between the two countries.
3. Investment Opportunity
Indonesia is open for investment for various stream of industry
INDONESIA : INVESTMENT DESTINATION OF CHOICE Economist: Indonesia rounds out the top five of Asian economies that can look forward to increased investment (January 2018)* China India Indonesia Vietnam Singapore Australia HongKong Thailand South Korea Japan Philippines Malaysia Myanmar Taiwan 18.2 20.2 30.6 30.1 28.8 28.7 28 26.6 24.7 24.3 36.9 44.1 47.1 69.4 0 10 20 30 40 50 60 70 80 Source: The Economist Asia Business Outlook Survey2018
INDONESIA : INVESTMENT DESTINATION OF CHOICE AD: Indonesia is listed as the top 5 prospective investment destination in the world (June 2017)** United States(1) 4 0 China(2) 36 India(3) 20 Indonesia(8) 11 Thailand (14) 11 Brazil(7) 9 United Kingdom 7 (4) Germany(5) 7 Mexico (7) 7 Philippines (9) 6 Spain(25) 5 Vietnam(14) 4 Singapura (18) Canada (18) Australia (13) 3 4 4 0 5 10 15 20 25 30 35 40 45 Source: United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2017 % of executives responding (x) = 2016 ranking
Positive Global Perception
INDONESIAN GOVERNMENT VERY COMMITED TO CREATE STABLE AND GOOD INVESTMENT CLIMATE Ease Of Doing Bussiness (EODB) Score Consistently Improve Innovation Institutions Infrastructure Efforts To Improve Investment Climate Business Sophistication Macroeconomic Environment Market Size Health and Primary Technological Readiness Higher Education and Training Financial Market Development Labour Market Efficiency Goods Market Efficiency 2015 2016 2017
Improving Investment Realizations
INFRASTRUCTURE DEVELOPMENT REMAINS FOCAL FOCUS OF THE GOVERNMENT SOME GOVT PRIORITIES FOR 2018 Road Building Targeted: 865 km Irigation Development Targeted: 781 km Electrification Ratio Targeted: 95,15 % % Development of Subsidised Apartments Targeted:13.405 unit
Infrastructure development is aimed to enhancen Nation s competitiveness Some targets has been achieved and supported regional development 3 Infrastructure 2014 2016 Target 2019 Toll Road Surabaya-Mojokerto Soekarno Hatta Airport 3 1. Generator Capacity (GW) 20.7 59.6 86.6 2. Electricity Consumption(kWh) 843 956 1,200 3. Crossing Port Development(unit) 210 322 275 4. National Road (km) 38,570 45,715 45,59 5. New Road (Cumm, km) - 1.071 2 2,650 Completed Dec-2017 Mobile Power Plan Arunin Nanggo Aceh Darusalam Completed Aug-2016 Trans Papua Road 6. Toll Road (Cumm, km) 807 983 1,807 7. Railway double track (km) 5,434 5,647 8. Seaport non commercial(unit) 278 488 9. New Airport(unit) - 15 8,692 450 15 Completed June 2016 Soekarno Hatta Railway Completed May 2017-3,900 km Tapaleo Airport 10. DevelopmentPort support sea toll (unit) - 24 24 ource: Halftime Evaluation of RPJMN 2015-2019 Completed Jan-2017 Completed May-2017
Indonesia National Strategic Projects (PSN)
4 Priority Sectors between Indonesia and South Africa Financial Institutions Pharmaceutical Products Strategic Industry Maritime Industry
Indonesia Offers A Promising Future For Business, Don't Wait Too Long!!!, Do a business with or Invest In Indonesia As Soon As Possible
Embassy of the Republic of Indonesia Thank You 949 Francis Baard Street, Hatfield, Arcadia 0083, Pretoria Republic of South Africa Phone : +27 123 423 350 Fax. : +27 123 423 369 Email : info@indonesia-pretoria.org.za Website : www.indonesia-pretoria.org.za OR http://pretoria.kemlu.go.id Indonesian Trade Promotion Centre ITPC Johannesburg Forum Building, 7 th Floor 2 Maude Street, Sandown Sandton Johannesburg Gauteng Republic of South Africa Phone : +27 11 884 6240 Fax. : +27 11 884 6242 Email : itpc@itpcjohannesburg.com OR info@itpcjohannesburg.com Website : www.itpcjohannesburg.com