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PD CONSULTING ASIA
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DOING BUSINESS IN INDONESIA
P D C O N S U L T I N G A S I A
PD CONSULTING ASIA
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FABRIKAM TECHNOLOGY INC . | INFO@FABRIKAM.COM
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SUMMARY
PD Consulting Asia developed this introductory report. We are a
public relations, digital advertising and public relations firm based in
Jakarta and London who help local, regional, and international brands
and businesses expand their business across Indonesia and the
Southeast Asia region at large.
When entering any new market, be it Indonesia or any other country,
it is vital to do your due diligence and market researching order to
make market entry successful.
While BritCham and the British Embassy can help you enter the
market and point you in the right direction with the right
connections, we provide market entry services at the next level to
both take the business forward and maintain business success for the
longer term. Sustained long term growth is our mantra.
This report introduces the Indonesian market and will help you
navigate some of the most common pitfalls. If you are interested in
retaining our consulting services on either a short-term project or
long-term retainer basis, please get in touch.
We provide the following services for British businesses making the
leap into Southeast Asia’s largest and most dynamic economy.
‱ Market entry consultancy, network, and setup services
‱ Stakeholder mapping and engagement, including government relations
‱ Public relations, digital advertising, graphic design, and social media
‱ Senior crisis and issues counsel and corporate communications
‱ Litigation and issues management
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BUSINESS
PRIORITIES
ADDED
PRIORITIES
EMPLOYEE
OPPORTUNITIES
ACHIEVING YOUR
GOALS

B U S I N E SS TI M E F RA M E S
M A RK E T E N TRY
M A RK E TI N G
PD CONSULTING ASIA
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PD Consulting Asia,
a boutique agency,
was setup
specifically to cater
to the needs of
businesses
entering the
Southeast Asian
marketplace
ASIA’S MOST
DYANMIC REGION
Today Southeast Asia makes up one of the world’s fastest growing and rapidly
developing economic centers. Asia is more than the story of the economic rise
of China and India. Southeast Asia is a road less travelled and less understood
by businesses, investors, and the public at large in the west.
Disparate and diverse, yet integrating rapidly, Southeast Asia and the
Association of Southeast Asian Nations (ASEAN) will become one of the largest
economic and trading blocs on earth in the decades ahead. The Chinese growth
story is slowing as the country matures. It also faces recession and a debt crisis.
China and Northeast Asia are also aging. India and South Asia have their own
developmental challenges. Southeast Asia is less discussed, yet it is a hugely
dynamic region, where change is afoot.
Not understanding Southeast Asia is not understanding the story of the ascent
of Asia and the evolution of the global economy. Leaders in business,
management and the public sector need economic and business insights to
help inform decision making and better understand today’s Southeast Asia and
PD Consulting Asia, a bespoke boutique agency, was setup specifically to cater
to these needs – western businesses entering Asia and Asian businesses
entering the west. We hope to help bridge the divide.
There is rich economic, trade, investment and business potential in Indonesia
and the region. Today, if we look at the ten countries of ASEAN in order of
economic size – Indonesia, Thailand, Malaysia, Singapore, the Philippines,
Vietnam, Myanmar (Burma), Cambodia, Laos, and Brunei – they form a diverse
family of countries but are integrating rapidly. They do more trade put together
between them today than the rest of world does with the whole of ASEAN.
Despite economic disparities, diverse cultures, languages, and ethnicities – this
family of nations and economic bloc share many similar threads of history and
evolving economic trends today. Businesses wanting to explore new growth
markets need to survive and thrive and we can help take you on that journey.
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THE FUTURE OF
SOUTHEAST ASIA
Business Trends
Southeast Asia is a magical and mysterious place, and a place where magical and mysterious events often happen –
even for hardnosed businesses and multinationals. From deep tropical rainforests to sky blue oceans, rings of
volcanoes, vast agricultural plantations, and magnetic fast-growing cities – this is Southeast Asia today. The place we
call Southeast Asia is a melting pot of cultures, religions, languages, and civilizations.
Although each country is distinct with its own history, culture and practices, modern day Southeast Asia is becoming
closer and more integrated as the decades roll on. The Association of Southeast Asian Nations or ASEAN is slowly
integrating ten disparate and diverse countries into one of the world’s major, fastest growing, and dynamic economic
centers. There has never been a better time to do business in Southeast Asia and the opportunity for business is now.
Southeast Asia today defines dynamism and growth. It is often put in the shadow of its giant Asian neighbors, China,
and India, but Southeast Asia is a critical global growth center and will become even more so as the emerging
economies of the region grow in economic and political power. ASEAN as a bloc is predicted to be the world’s fourth
largest economy by 2050.1
Today ASEAN is made up of ten established economies. In order of economic size, they are:
1. Indonesia
2. Thailand
3. Malaysia
4. Singapore
5. Philippines
6. Vietnam
7. Myanmar (Burma)
8. Cambodia
9. Brunei
10. Laos
These economies vary vastly in economic development and economic opportunity, but all are growing at rapid rates
and have a shared story of economic emergence. They, therefore, present a golden opportunity for businesses and
investors wanting to do business in one of the fastest-growing regions of the world.
Today Southeast Asia is a major hub for manufacturing and trade with a huge and growing middle class. As Southeast
Asia grows, it is now more important than ever for those outside the region to understand what makes the economies
and business environment of the region tick and to grasp the paradoxes, complexities, and contrasts of the region.
There is no hidden secret to doing business in Southeast Asia, but the dynamics of the region are quite specific and
quite unlike anywhere else in the world. Doing business in the region requires a huge amount of patience, persistence
and most critically – understanding.
1 https://www.mckinsey.com/industries/public-sector/our-insights/understanding-asean-seven-things-you-need-to-know
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Understanding Southeast Asia today means understanding contradiction and the elements that make up those
contradictions. Navigating through these challenges is critical to business success and is often where businesses fall
short – for the region is not a place that is easy to penetrate for business due to multiple layers of both political,
cultural, and regulatory challenges.
Furthermore, ASEAN is not an Asian European Union. The differences between ASEAN countries are huge. Indonesia is
the regional giant making up by far the largest portion of ASEAN’s GDP. Tiny Laos on the other hand is still at the initial
stages of development. The city state of Singapore is the regional hub of Southeast Asia, controlling and funneling
much of the investment that goes into the region and the headquarters of most regional and multinational companies
operating in the region. Singapore is a modern first world metropolis, whilst its neighbors still face major
developmental challenges, but these challenges should not deter business from exploring markets that offer rich
rewards for the right business and investment strategy.
Southeast Asia’s economic growth is accelerating rapidly, much more so than many other places in the world –
notably Europe and the United States and increasingly China, so for those brave enough to take the plunge, to dig in
and understand the dynamics of the region the rewards are rich indeed.
An Overlooked Region
Whilst the west has been busy focusing on the rise of China its implications for the new world order, Southeast Asia
has been quietly developing. Developing economically, socially, and culturally. It feels to those who have lived and
worked in Southeast Asia that the world has failed to notice the quiet rise of Asia’s other powers. This is worrying. The
west has increasingly become blind sighted by domestic populist issues at home and is missing the big picture – the
economic rise of the rest of Asia.
An inward-looking western world has failed to grasp the enormous opportunity that the rest of Asia, and particularly
Southeast Asia, present. The ASEAN trading bloc has a combined GDP of $2.8 trillion.2
ASEAN, as a bloc, is now the
world’s 5th
largest and Asia’s 3rd
largest economy.3
With a population of 630 million people and a land mass covering
more than 1.7 million square miles, the sheer scale of the region and the number of young working age people is
staggering.4
With its combined trade value, ASEAN is the fourth largest trading entity in the world after the European
Union, the United States and Japan.5
These figures are true today and ASEAN will continue to move up these rankings.
Put simply, not trading and doing business in ASEAN is to miss a golden opportunity. An opportunity that is taking
place right now.
Looking at Asia as a whole, the world is already Asian. Most people, and importantly young people, live in Asia today.
The demographics are not shifting, they have shifted. Economically, 40 percent of the global economy is already
centered in Asia, and this is set to rise.6
ASEAN has a larger population than the European Union or North America and
the third-largest labor force in the world, behind China and India.7
Whilst the west preoccupied with domestic issues, the divergence of Asia could not be starker. China’s ‘Belt and Road’
initiative is driving finance, infrastructure, expertise and – most presciently – influence, into Asia and across ASEAN.8
Another factor that ASEAN is enjoying is stability. There are no Brexits and Trump coups. Taken as whole, Southeast
Asia is enjoying stability that it is unprecedented. This geopolitical stability is driving consistent growth across the
countries that makeup ASEAN today.
2 https://www.aseanstats.org/
3 https://www.aseanstats.org/
4 https://asiamattersforamerica.org/what-is-asean
5 https://asean.org/?static_post=economic-achievement
6 The Future Is Asian: Commerce, Conflict and Culture in the 21st Century, Parag Khanna, Simon & Schuster, 2019
7 https://www.mckinsey.com/industries/public-sector/our-insights/understanding-asean-seven-things-you-need-to-know
8 https://eng.yidaiyilu.gov.cn/ztindex.htm
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It is vital to understand that ASEAN does not perform the same structured, legal, or standardized rules as the
European Union, but what is does do is encourage integration, trade and peace in a part of the world that has seen its
fair share of conflict and turmoil in the decades before.
The Future of Trade
Trade has become truly global and more importantly Asia is increasingly not only trading with the west in old style
production models but trading inward – ASEAN being a prime example of this as it grows in affluence. Intra-ASEAN
trade is the largest market for ASEAN total trade.9
ASEAN is becoming closer and increasingly integrated; this bodes well not just for the future of Southeast Asian
growth and stability but makes the disparate and diverse region more accessible for western businesses and
economies to trade with. Whilst a trade war is waging between the United States and China, ASEAN is quietly building
cooperative ties and bilateral agreements across the world – through its individual states and as a trading bloc. We
may well be seeing the emergence of Cold War 2.0, as the United States and China vie for influence around the world,
where these two global economic giants compete in terms of trade and technology.10
However, ASEAN is working to
bring down and align its trade barriers and practices, to make doing business across the region easier.
Today, ASEAN is the fourth-largest exporting region in the world, behind only the European Union, North America,
and China.11
Whilst Europe and the United States face relative stagnation, ASEAN is powering ahead. ASEAN’s total
GDP is now almost four and a half times the value it was in 2000.12
This is a huge untold growth story.
The Golden Opportunity
It is now time for the rest of the world to wake up to the potential of Southeast Asia and spend a little less time
focusing on the already well-established rise of China and India, and a little more time exploring the rest of rising Asia.
The right opportunities and right markets are in Southeast Asia today and ripe for businesses brave enough to take
the plunge into one of the world’s most dynamic regions. The future does not belong to those who wait and see, but
to those that grasp opportunities and look beyond their own shores and horizons.
Historical Dynamics of the Region
Early Trade
Southeast Asia has always been a focal point for global trade. Hundreds of years before European colonization, Indian
and Arab merchants cultivated trade ties with the region, trading in commodities and spices – from cloves to pepper
and nutmeg. A rich region of spices not only resulted in early trading links but helped develop the modern culture and
identity of Southeast Asia today. These Indian and Arab merchants also settled in Southeast Asia and brought with
them ideas such as Islam, Buddhism and Hinduism – forging the unique patchwork and melting pot of ethnicities and
religions we see in Southeast Asia today. A population that is Muslim in the southern parts of the region and Buddhist
in the north.
Colonialism
From a place full of kingdoms and ancient cultures came colonialism and the divisions and dividing lines that makeup
Southeast Asia today. As Europe developed it built global seafaring empires. European explorers originally came to
Southeast Asia from the early colonial settlements of South America. Spanish and Portuguese ships sailed from these
South American settlements across the Pacific and ‘discovered’ Southeast Asia and the rich variation of spices and
9 https://www.aseanstats.org/
10 https://www.abc.net.au/news/2019-03-06/us-and-china-locked-in-cold-war-2.0-historian-says/10873254
11 https://www.mckinsey.com/industries/public-sector/our-insights/understanding-asean-seven-things-you-need-to-know
12 https://www.aseanstats.org/
PD CONSULTING ASIA
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commodities that the region possessed. These early empires were soon supplanted by the growing global
superpowers from western Europe. First the Dutch, followed by the British and French.
Not content with just trading with Southeast Asia, the Europeans soon established commercial companies and
interests in the region. This eventually led to invasion and annexation of territories previously controlled by ancient
kingdoms and fiefdoms. The Dutch established the Dutch East Indies and seized controlled of what we now call
Indonesia, the British East India company established ports and territories across Malaya in what we now call Malaysia
and Singapore as well as Myanmar (Burma), the French established themselves in Indochina, taking control of what
we now call Vietnam, Cambodia and Laos and the Spanish took control of the Philippines, later to be supplanted by a
young United States. By the end of the 19th
century, every country in Southeast Asia was colonized except for
Thailand.
In terms of trade and shifts in the region’s economy, the economic effect of imperialism was a shift in the production
of commodities. The economics of modern-day Southeast Asia was shaped by this production drive, where for
example the rubber plantations of Malaysia, Indonesia, Vietnam and Cambodia, the tin mining of Malaya, the rice
fields of the Mekong Delta in Vietnam and Irrawaddy River delta in Myanmar (Burma) were a response to the market
demands of the European colonial powers.13
Cash crops for Europe rapidly shifted the economic dynamics of the
region. Not much has changed today.
World War 2
The history books often overlook Southeast Asia when discussing what was truly a global war. It was not just Europe
that suffered from the occupation of the Nazi regime but Asia from the invasion of Imperial Japan. As the European
powers retreated from Southeast Asia to fight a bloody and protracted war in Europe against the Nazi regime,
Imperial Japan filled a power vacuum, invading most of Southeast Asia right down from Myanmar (Burma) at the top
to Indonesia at the bottom. The Japanese originally encouraged the development of nascent independence
movements to fight for freedom from the colonial empires of Europe. However, the Japanese soon occupied Thailand,
Vietnam, Myanmar (Burma), Malaysia, the Philippines and Indonesia proving that Imperial Japan’s talk of freedom
and independence was a self-serving ploy.
Imperial Japan was one of the most brutal empires to set foot in Southeast Asia. The Japanese Shƍwa occupation
regime committed unparalleled acts of violence, such as the Manila massacre and the implementation of a system
of forced labor, where in Indonesia millions died because of famine and forced labor during the Japanese occupation.
Independence Movements
As the Allied western powers pushed back and eventually defeated Imperial Japan in Southeast Asia and brought
WW2 to a close, the seed of independence and nationalism was already sown. Southeast Asia was not prepared to
return to colonial rule after hundreds of years of repression and subjugation and the ‘independence’ that was granted
by the retreating Japanese. The Japanese showed that the western powers could be defeated. From the end of WW2
in 1945, to 1957, independence movements across Southeast Asia eventually forced out the colonial powers. During
this period of nationalist struggle, all Southeast Asia gained independence turning to democracy or constitutional
monarchy.
The Cold War
The Cold War brought conflict to Vietnam, Cambodia and Laos and the deaths of hundreds of thousands as the United
States fought a war of futility against a Vietnamese people desperate for independence more so than communist
ideology. The Cold War was not just fought in Vietnam but across Southeast Asia, as communist movements were
brutally suppressed either directly by or with the support of western powers.
13 A History of the Global Economy: 1500 to the Present, Joerg Baten, Cambridge University Press, 2016
PD CONSULTING ASIA
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Proxy wars and insurgencies backed by the United States and Soviet Union plagued the region for much of 1960s and
1970s.14
Struggles between communist and anti-communist factions took place across the region, most famously in
Vietnam, but also in Malaysia and Indonesia. After the Vietnam War and the defeat of the United States by the
Vietcong, Vietnam was united under communism with Laos also becoming communist. Cambodia also became
communist and suffered under the Khmer Rouge’s genocidal regime of communism in the late seventies, where the
killing fields took place in 1975. Indonesia also had a strong communist party, which was influential under Indonesia’s
fist president and independence leader Sukarno. In 1965, however the Indonesian military purged thousands of
suspected communists and millions were killed under Suharto.
After independence, Myanmar (Burma) enjoyed almost fifteen years of democracy. This was before a military coup
installed a repressive, brutal and highly isolationist authoritarian government up until 2011, when a series of political
and economic reforms took place and the release of pro-democracy leader Aung San Suu Kyi. Today the junta are back
in charge and Myanmar is once again isolated and cut off from much of the rest of the region and the global economy.
Doing business in Myanmar is particularly testing.
During the second half of the 20th
century, Southeast Asia as a whole faced economic turmoil, poverty, social and
ethnic unrest, and political struggle. By the 1980s, economic and political conditions had improved, and the region
began to develop rapidly, however this was not to last.
The Asian Financial Crisis
In July 1997, East and Southeast Asia experienced the worst financial crisis in the region’s history. Fears of a global
economic meltdown were sparked by what by 1997 was an interconnected region and a global economy that was by
this point truly connected to Asia – globalization of finance led to fears of financial contagion across the world.
The Asian Financial Crisis started in Thailand with the collapse in value of the Thai baht when the Thai government
was forced to float the baht due to a lack of foreign currency to support its currency peg against the United States
dollar. Thailand had acquired significant foreign debt that made the country effectively bankrupt even before its
currency collapsed. The contagion started in Thailand where both the country’s national bank and commercial
interests had taken on non-performing loans and investments in unproductive ventures. Capital flight from Southeast
Asia then took place, beginning a regional, Asian and global chain reaction where money was pulled out of Asia –
hence the Asian Financial Crisis. This showed the weak fundamentals in which Southeast Asia’s rapid growth was
based – the period of crony capitalism could not be sustained.
As the crisis spread across Southeast Asia, currencies began to collapse, stocks and assets crashed in value and private
debt shot up. Indonesia and Thailand were, and continue to be, the biggest economies in the region and therefore
were most affected by the crisis. Laos, Malaysia and the Philippines were also affected, whereas tiny Brunei and
Singapore, were less exposed. Vietnam was also less affected, but the totality of the crisis meant that economic
confidence and demand was lost throughout the region.
ASEAN’s four biggest economies saw foreign debt-to-GDP ratios rocket from 100 percent to 167 percent, and then
above 180 percent during 1993-1996 during the peak of the crisis.15
Whereas Southeast Asia had seen large inflows of
foreign investment as economies gradually opened up in the decades of the 1980s and seemingly had sound fiscal
policies, the International Monetary Fund (IMF) was forced to step in to initiate a $40 billion rescue package to
stabilize the currencies of Thailand and Indonesia, the two economies hit hardest by the crisis.
Although a global economic crisis was averted, Southeast Asia did not escape unscathed. The huge slump in the
Indonesian economy led to widespread rioting after sharp price increases due to a drastic devaluation of the rupiah.
After thirty years of authoritarian New Order rule, Indonesian President Suharto was forced to step down in May
1998. Other economies in Southeast Asia saw huge slumps in growth, the Philippines seeing growth drop to around
14 The War of the World: History's Age of Hatred, Niall Ferguson, Penguin, 2009
15 https://www.adb.org/publications/key-indicators-developing-asian-and-pacific-countries-2003
PD CONSULTING ASIA
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zero. The developed city state of Singapore was relatively insulated from these shocks but due to trade and
investment inflows between Malaysia and Indonesia, it too saw economic decline.
The Asian Economic Miracle
A positive impact of the Asian Financial Crisis on the region was that the countries of Southeast Asia had to work
towards greater financial stability and oversight, leading to the robust financial systems that now much of Southeast
Asia enjoy today. Unlike the rest of the world, when the west experienced its own fiscal crisis in the United States and
Europe in 2008, Southeast Asia was left unscathed. Recession or relative economic decline in today’s west is also not
true in the east. Southeast Asia had been gradually improving its financial and fiscal position for a decade. In the
aftermath of the Asian Financial Crisis, the economies of Southeast Asia maintained high interest rates to attract
foreign investors back into the region and to those seeking a high rate of return. The region experienced high inflows
of investment and a huge increase in asset prices. During the same period, the economies of Thailand, Malaysia,
Indonesia, Singapore experienced high growth rates of around 8–12 percent of GDP during the late 1980s and early
1990s. This huge achievement is widely known today as the Asian Economic Miracle.
A Lasting Legacy
It is only in the last two decades that Southeast Asia has really started to enjoy an era of overall peace and economic
stability, although it is important to note that some localized peripheral conflicts remain to this day.16
This can
sometimes make investment challenging in conflict prone areas which is why risk mapping is vital. It is also no
coincidence that this decade has seen the rapid development of the region, for geopolitical stability goes hand in hand
with economic prosperity. Today ASEAN is a mix of democracies, semi-democracies, and authoritarian regimes.
Colonial rule struggles for independence, war, and conflict, and a hugely scarring Asian Financial Crisis, where the
major economies of Southeast Asia were forced to take loans from the western dominated IMF and World Bank, have
permanently altered and shifted the attitudes of Southeast Asia today. The economic policies of each country are
universally highly nationalistic, protectionist and willing to use state intervention to move economic progress forward.
Considering the hundreds of years of subjugation and suffering this should not come as a surprise and is why we see
this tendency across the region to this day. Businesses need to check their privilege and understand history before
complaining to loudly. Soft approaches work better than publicly shaming governments.
Indonesia: The Regional Economic Giant
Indonesia is a regional and global giant. The archipelago nation spans 3,000 miles from east to west across the
equator, with a population of 260 million people dispersed across 17,000 diverse islands. It is the largest country and
economy in Southeast Asia, dwarfing its regional neighbors in scale. Indonesia is seldom discussed in western media,
short of earthquakes and natural disasters that are common for a country located in the so called ‘Ring of Fire’ due to
the numerous volcanoes that are in the country. What the west is missing is Indonesia’s modernization.
Today Indonesia is the world’s 10th
largest economy in terms of purchasing power parity, the world’s third largest
democracy and a member of the G20 and UN Security Council. It is also the world’s largest Muslim majority country –
not the world’s largest Muslim country, which is misnomer often repeated. There are many religions and ethnic
groups that make up modern Indonesia and the ‘Unity in Diversity’ mantra that is the country’s guiding principle is
reflective of the challenge that Indonesia faces in keeping a hugely disparate country unified.
Indonesia’s economy is diverse. From fast growing digital, technology and service sectors in the glitzy-mega mall
capital city, which is Jakarta, to booming tourism in areas such as Bali, to the palm and paper plantations of Sumatra,
to agriculture, mining, and oil and gas spread across the archipelago, these are all industries that makeup modern
Indonesia’s economy. The key to Indonesia’s growth, and tellingly much of Southeast Asia, is a rapidly rising middle
16 Blood and Silk: Power and Conflict in Modern Southeast Asia, Michael Vatikiotis, W&N, 2017
PD CONSULTING ASIA
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class. Domestic consumption alone is a huge growth driver for Indonesia’s economy and is fueled by the fourth-
biggest middle class in the world.
Indonesia has undertaken a massive infrastructure building drive as well as a focus on industrialization to gradually
shift the country away from a reliance on commodities and towards industrialized manufacturing. The country is
already a major textile manufacturer and this trend towards greater industrialization is set to continue as the country
develops further. Beyond this, Indonesia is already home to four tech start-ups valued at above $1 billion, going to
show that technology and the creative industries are now well and truly contributing to the economy as it
modernizes. Western businesses can make use of tech and creative partnerships for growth.
Indonesia is also slowly beginning to open protected sectors to foreign investors, meaning new business opportunities
are coming online. Overall, the archipelago nations’ massively growing middle class, strategic geographical position,
and human capital development agenda are laying the foundations for strong and continued economic growth into
the future. The same story applies to the rest of the region.
Untapped Potential: Opportunities by Sector
There is business and investment potential in every sector across Southeast Asia. From banking to healthcare and
beyond, there are boundless opportunities, however the major investment and growth needs of a disparate region in
the coming decades are reflective of the developmental convergence that was discussed in the previously.
Each country or market are different in economic development, and therefore each market has different
opportunities for business, however taking a macro-overview of trends, patterns and the future, there are some
standout sectors that provide untapped potential.
1. Infrastructure
2. Digital
3. Manufacturing
4. Energy
5. Services / Creative Industries
6. Consumer Goods
Top Business Tips
One Region, Different Country Dynamics – don’t enter the region with the same approach as you would in the EU or
USA
Agility – the need to be flexible to respond to fast changing and fast-moving markets, development in emerging
economies, trends etc. Companies that are most successful are fast moving, responsive to change and think about
connectivity across the region.
People – the importance of community relations and human capital, cultural sensitivity
Relationships – networks and relationships are critical in ASEAN from choosing trusted and non-corrupt business
partners to government to regulators
Competition – the resistance and entrenched interests of existing businesses and interests.
Example:
‱ 1 percent of Thais own 58 percent of Thailand’s wealth
‱ 1 percent of Indonesians own almost 50 percent of its wealth
‱ 25 families in the Philippines own more wealth than 75 million Filipinos
PD CONSULTING ASIA
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Invest for the Long Term
The Long Game
Long-term investments and incremental progress are the key to success. There is a need to be persistent to work
through the bureaucratic barriers. Be prepared to fail. Exploring what works and what doesn’t isn’t an exact science in
Southeast Asia. A lot of consumer data doesn’t exist and if it does it’s out of date due to the rapid rate of change and
development. The will to persist amidst a challenging business environment is critical. There are little low hanging
fruits or short-term gains to be had. Patience is critical.
The Elephant in the Room
Endemic corruption and entrenched interests from local business to government figures. Ease of Doing Business
reports and rankings can be accessed online demonstrating these challenges. Invest and do business with caution and
due your due diligence.
PD CONSULTING ASIA
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About PD Consulting Asia
Tell your story in Southeast Asia
We help companies and governments tell their story in Southeast Asia. Experts in
public relations, content development, digital & design, corporate & public affairs
with a network of agencies across the region.
Industry
Public Relations and Communications Services
Specialties
Public Relations, Corporate Affairs, Public Affairs, Advertising, Digital, and Design
About the Author
Edward Parker
Managing Director, PD Consulting Asia
Edward has now spent over a decade living and working in Southeast Asia as a
consultant, advising some of the world’s biggest multinational companies. He has
lived and worked in both Jakarta, Indonesia and Yangon, Myanmar (Burma) and has
travelled and worked extensively across the region. He has written for The Diplomat
magazine and much of the regional press in Southeast Asia. He holds a First-Class
Honours degree in International Relations and Politics from the University of
Sheffield. He is an expert in issues and crisis management as well as navigating
business challenge, from regulatory issues to market entry.
Please contact us if you would like to know more about the service offerings we can provide. We provide bespoke
market entry business briefs as well as short- and long-term project consultancy, public affairs advisory and
marketing communications services.
Send our team a message on LinkedIn and connect with us here
Follow PD Consulting on LinkedIn here

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Doing Business in Indonesia 2022

  • 1. PD CONSULTING ASIA | 1 DOING BUSINESS IN INDONESIA P D C O N S U L T I N G A S I A
  • 2. PD CONSULTING ASIA | 2 FABRIKAM TECHNOLOGY INC . | INFO@FABRIKAM.COM
  • 3. | 3 SUMMARY PD Consulting Asia developed this introductory report. We are a public relations, digital advertising and public relations firm based in Jakarta and London who help local, regional, and international brands and businesses expand their business across Indonesia and the Southeast Asia region at large. When entering any new market, be it Indonesia or any other country, it is vital to do your due diligence and market researching order to make market entry successful. While BritCham and the British Embassy can help you enter the market and point you in the right direction with the right connections, we provide market entry services at the next level to both take the business forward and maintain business success for the longer term. Sustained long term growth is our mantra. This report introduces the Indonesian market and will help you navigate some of the most common pitfalls. If you are interested in retaining our consulting services on either a short-term project or long-term retainer basis, please get in touch. We provide the following services for British businesses making the leap into Southeast Asia’s largest and most dynamic economy. ‱ Market entry consultancy, network, and setup services ‱ Stakeholder mapping and engagement, including government relations ‱ Public relations, digital advertising, graphic design, and social media ‱ Senior crisis and issues counsel and corporate communications ‱ Litigation and issues management
  • 4. | 4
  • 5. | 5 BUSINESS PRIORITIES ADDED PRIORITIES EMPLOYEE OPPORTUNITIES ACHIEVING YOUR GOALS
 B U S I N E SS TI M E F RA M E S M A RK E T E N TRY M A RK E TI N G
  • 7. | 7 PD Consulting Asia, a boutique agency, was setup specifically to cater to the needs of businesses entering the Southeast Asian marketplace ASIA’S MOST DYANMIC REGION Today Southeast Asia makes up one of the world’s fastest growing and rapidly developing economic centers. Asia is more than the story of the economic rise of China and India. Southeast Asia is a road less travelled and less understood by businesses, investors, and the public at large in the west. Disparate and diverse, yet integrating rapidly, Southeast Asia and the Association of Southeast Asian Nations (ASEAN) will become one of the largest economic and trading blocs on earth in the decades ahead. The Chinese growth story is slowing as the country matures. It also faces recession and a debt crisis. China and Northeast Asia are also aging. India and South Asia have their own developmental challenges. Southeast Asia is less discussed, yet it is a hugely dynamic region, where change is afoot. Not understanding Southeast Asia is not understanding the story of the ascent of Asia and the evolution of the global economy. Leaders in business, management and the public sector need economic and business insights to help inform decision making and better understand today’s Southeast Asia and PD Consulting Asia, a bespoke boutique agency, was setup specifically to cater to these needs – western businesses entering Asia and Asian businesses entering the west. We hope to help bridge the divide. There is rich economic, trade, investment and business potential in Indonesia and the region. Today, if we look at the ten countries of ASEAN in order of economic size – Indonesia, Thailand, Malaysia, Singapore, the Philippines, Vietnam, Myanmar (Burma), Cambodia, Laos, and Brunei – they form a diverse family of countries but are integrating rapidly. They do more trade put together between them today than the rest of world does with the whole of ASEAN. Despite economic disparities, diverse cultures, languages, and ethnicities – this family of nations and economic bloc share many similar threads of history and evolving economic trends today. Businesses wanting to explore new growth markets need to survive and thrive and we can help take you on that journey.
  • 8. | 8 THE FUTURE OF SOUTHEAST ASIA Business Trends Southeast Asia is a magical and mysterious place, and a place where magical and mysterious events often happen – even for hardnosed businesses and multinationals. From deep tropical rainforests to sky blue oceans, rings of volcanoes, vast agricultural plantations, and magnetic fast-growing cities – this is Southeast Asia today. The place we call Southeast Asia is a melting pot of cultures, religions, languages, and civilizations. Although each country is distinct with its own history, culture and practices, modern day Southeast Asia is becoming closer and more integrated as the decades roll on. The Association of Southeast Asian Nations or ASEAN is slowly integrating ten disparate and diverse countries into one of the world’s major, fastest growing, and dynamic economic centers. There has never been a better time to do business in Southeast Asia and the opportunity for business is now. Southeast Asia today defines dynamism and growth. It is often put in the shadow of its giant Asian neighbors, China, and India, but Southeast Asia is a critical global growth center and will become even more so as the emerging economies of the region grow in economic and political power. ASEAN as a bloc is predicted to be the world’s fourth largest economy by 2050.1 Today ASEAN is made up of ten established economies. In order of economic size, they are: 1. Indonesia 2. Thailand 3. Malaysia 4. Singapore 5. Philippines 6. Vietnam 7. Myanmar (Burma) 8. Cambodia 9. Brunei 10. Laos These economies vary vastly in economic development and economic opportunity, but all are growing at rapid rates and have a shared story of economic emergence. They, therefore, present a golden opportunity for businesses and investors wanting to do business in one of the fastest-growing regions of the world. Today Southeast Asia is a major hub for manufacturing and trade with a huge and growing middle class. As Southeast Asia grows, it is now more important than ever for those outside the region to understand what makes the economies and business environment of the region tick and to grasp the paradoxes, complexities, and contrasts of the region. There is no hidden secret to doing business in Southeast Asia, but the dynamics of the region are quite specific and quite unlike anywhere else in the world. Doing business in the region requires a huge amount of patience, persistence and most critically – understanding. 1 https://www.mckinsey.com/industries/public-sector/our-insights/understanding-asean-seven-things-you-need-to-know
  • 9. PD CONSULTING ASIA | 9 Understanding Southeast Asia today means understanding contradiction and the elements that make up those contradictions. Navigating through these challenges is critical to business success and is often where businesses fall short – for the region is not a place that is easy to penetrate for business due to multiple layers of both political, cultural, and regulatory challenges. Furthermore, ASEAN is not an Asian European Union. The differences between ASEAN countries are huge. Indonesia is the regional giant making up by far the largest portion of ASEAN’s GDP. Tiny Laos on the other hand is still at the initial stages of development. The city state of Singapore is the regional hub of Southeast Asia, controlling and funneling much of the investment that goes into the region and the headquarters of most regional and multinational companies operating in the region. Singapore is a modern first world metropolis, whilst its neighbors still face major developmental challenges, but these challenges should not deter business from exploring markets that offer rich rewards for the right business and investment strategy. Southeast Asia’s economic growth is accelerating rapidly, much more so than many other places in the world – notably Europe and the United States and increasingly China, so for those brave enough to take the plunge, to dig in and understand the dynamics of the region the rewards are rich indeed. An Overlooked Region Whilst the west has been busy focusing on the rise of China its implications for the new world order, Southeast Asia has been quietly developing. Developing economically, socially, and culturally. It feels to those who have lived and worked in Southeast Asia that the world has failed to notice the quiet rise of Asia’s other powers. This is worrying. The west has increasingly become blind sighted by domestic populist issues at home and is missing the big picture – the economic rise of the rest of Asia. An inward-looking western world has failed to grasp the enormous opportunity that the rest of Asia, and particularly Southeast Asia, present. The ASEAN trading bloc has a combined GDP of $2.8 trillion.2 ASEAN, as a bloc, is now the world’s 5th largest and Asia’s 3rd largest economy.3 With a population of 630 million people and a land mass covering more than 1.7 million square miles, the sheer scale of the region and the number of young working age people is staggering.4 With its combined trade value, ASEAN is the fourth largest trading entity in the world after the European Union, the United States and Japan.5 These figures are true today and ASEAN will continue to move up these rankings. Put simply, not trading and doing business in ASEAN is to miss a golden opportunity. An opportunity that is taking place right now. Looking at Asia as a whole, the world is already Asian. Most people, and importantly young people, live in Asia today. The demographics are not shifting, they have shifted. Economically, 40 percent of the global economy is already centered in Asia, and this is set to rise.6 ASEAN has a larger population than the European Union or North America and the third-largest labor force in the world, behind China and India.7 Whilst the west preoccupied with domestic issues, the divergence of Asia could not be starker. China’s ‘Belt and Road’ initiative is driving finance, infrastructure, expertise and – most presciently – influence, into Asia and across ASEAN.8 Another factor that ASEAN is enjoying is stability. There are no Brexits and Trump coups. Taken as whole, Southeast Asia is enjoying stability that it is unprecedented. This geopolitical stability is driving consistent growth across the countries that makeup ASEAN today. 2 https://www.aseanstats.org/ 3 https://www.aseanstats.org/ 4 https://asiamattersforamerica.org/what-is-asean 5 https://asean.org/?static_post=economic-achievement 6 The Future Is Asian: Commerce, Conflict and Culture in the 21st Century, Parag Khanna, Simon & Schuster, 2019 7 https://www.mckinsey.com/industries/public-sector/our-insights/understanding-asean-seven-things-you-need-to-know 8 https://eng.yidaiyilu.gov.cn/ztindex.htm
  • 10. PD CONSULTING ASIA | 10 It is vital to understand that ASEAN does not perform the same structured, legal, or standardized rules as the European Union, but what is does do is encourage integration, trade and peace in a part of the world that has seen its fair share of conflict and turmoil in the decades before. The Future of Trade Trade has become truly global and more importantly Asia is increasingly not only trading with the west in old style production models but trading inward – ASEAN being a prime example of this as it grows in affluence. Intra-ASEAN trade is the largest market for ASEAN total trade.9 ASEAN is becoming closer and increasingly integrated; this bodes well not just for the future of Southeast Asian growth and stability but makes the disparate and diverse region more accessible for western businesses and economies to trade with. Whilst a trade war is waging between the United States and China, ASEAN is quietly building cooperative ties and bilateral agreements across the world – through its individual states and as a trading bloc. We may well be seeing the emergence of Cold War 2.0, as the United States and China vie for influence around the world, where these two global economic giants compete in terms of trade and technology.10 However, ASEAN is working to bring down and align its trade barriers and practices, to make doing business across the region easier. Today, ASEAN is the fourth-largest exporting region in the world, behind only the European Union, North America, and China.11 Whilst Europe and the United States face relative stagnation, ASEAN is powering ahead. ASEAN’s total GDP is now almost four and a half times the value it was in 2000.12 This is a huge untold growth story. The Golden Opportunity It is now time for the rest of the world to wake up to the potential of Southeast Asia and spend a little less time focusing on the already well-established rise of China and India, and a little more time exploring the rest of rising Asia. The right opportunities and right markets are in Southeast Asia today and ripe for businesses brave enough to take the plunge into one of the world’s most dynamic regions. The future does not belong to those who wait and see, but to those that grasp opportunities and look beyond their own shores and horizons. Historical Dynamics of the Region Early Trade Southeast Asia has always been a focal point for global trade. Hundreds of years before European colonization, Indian and Arab merchants cultivated trade ties with the region, trading in commodities and spices – from cloves to pepper and nutmeg. A rich region of spices not only resulted in early trading links but helped develop the modern culture and identity of Southeast Asia today. These Indian and Arab merchants also settled in Southeast Asia and brought with them ideas such as Islam, Buddhism and Hinduism – forging the unique patchwork and melting pot of ethnicities and religions we see in Southeast Asia today. A population that is Muslim in the southern parts of the region and Buddhist in the north. Colonialism From a place full of kingdoms and ancient cultures came colonialism and the divisions and dividing lines that makeup Southeast Asia today. As Europe developed it built global seafaring empires. European explorers originally came to Southeast Asia from the early colonial settlements of South America. Spanish and Portuguese ships sailed from these South American settlements across the Pacific and ‘discovered’ Southeast Asia and the rich variation of spices and 9 https://www.aseanstats.org/ 10 https://www.abc.net.au/news/2019-03-06/us-and-china-locked-in-cold-war-2.0-historian-says/10873254 11 https://www.mckinsey.com/industries/public-sector/our-insights/understanding-asean-seven-things-you-need-to-know 12 https://www.aseanstats.org/
  • 11. PD CONSULTING ASIA | 11 commodities that the region possessed. These early empires were soon supplanted by the growing global superpowers from western Europe. First the Dutch, followed by the British and French. Not content with just trading with Southeast Asia, the Europeans soon established commercial companies and interests in the region. This eventually led to invasion and annexation of territories previously controlled by ancient kingdoms and fiefdoms. The Dutch established the Dutch East Indies and seized controlled of what we now call Indonesia, the British East India company established ports and territories across Malaya in what we now call Malaysia and Singapore as well as Myanmar (Burma), the French established themselves in Indochina, taking control of what we now call Vietnam, Cambodia and Laos and the Spanish took control of the Philippines, later to be supplanted by a young United States. By the end of the 19th century, every country in Southeast Asia was colonized except for Thailand. In terms of trade and shifts in the region’s economy, the economic effect of imperialism was a shift in the production of commodities. The economics of modern-day Southeast Asia was shaped by this production drive, where for example the rubber plantations of Malaysia, Indonesia, Vietnam and Cambodia, the tin mining of Malaya, the rice fields of the Mekong Delta in Vietnam and Irrawaddy River delta in Myanmar (Burma) were a response to the market demands of the European colonial powers.13 Cash crops for Europe rapidly shifted the economic dynamics of the region. Not much has changed today. World War 2 The history books often overlook Southeast Asia when discussing what was truly a global war. It was not just Europe that suffered from the occupation of the Nazi regime but Asia from the invasion of Imperial Japan. As the European powers retreated from Southeast Asia to fight a bloody and protracted war in Europe against the Nazi regime, Imperial Japan filled a power vacuum, invading most of Southeast Asia right down from Myanmar (Burma) at the top to Indonesia at the bottom. The Japanese originally encouraged the development of nascent independence movements to fight for freedom from the colonial empires of Europe. However, the Japanese soon occupied Thailand, Vietnam, Myanmar (Burma), Malaysia, the Philippines and Indonesia proving that Imperial Japan’s talk of freedom and independence was a self-serving ploy. Imperial Japan was one of the most brutal empires to set foot in Southeast Asia. The Japanese Shƍwa occupation regime committed unparalleled acts of violence, such as the Manila massacre and the implementation of a system of forced labor, where in Indonesia millions died because of famine and forced labor during the Japanese occupation. Independence Movements As the Allied western powers pushed back and eventually defeated Imperial Japan in Southeast Asia and brought WW2 to a close, the seed of independence and nationalism was already sown. Southeast Asia was not prepared to return to colonial rule after hundreds of years of repression and subjugation and the ‘independence’ that was granted by the retreating Japanese. The Japanese showed that the western powers could be defeated. From the end of WW2 in 1945, to 1957, independence movements across Southeast Asia eventually forced out the colonial powers. During this period of nationalist struggle, all Southeast Asia gained independence turning to democracy or constitutional monarchy. The Cold War The Cold War brought conflict to Vietnam, Cambodia and Laos and the deaths of hundreds of thousands as the United States fought a war of futility against a Vietnamese people desperate for independence more so than communist ideology. The Cold War was not just fought in Vietnam but across Southeast Asia, as communist movements were brutally suppressed either directly by or with the support of western powers. 13 A History of the Global Economy: 1500 to the Present, Joerg Baten, Cambridge University Press, 2016
  • 12. PD CONSULTING ASIA | 12 Proxy wars and insurgencies backed by the United States and Soviet Union plagued the region for much of 1960s and 1970s.14 Struggles between communist and anti-communist factions took place across the region, most famously in Vietnam, but also in Malaysia and Indonesia. After the Vietnam War and the defeat of the United States by the Vietcong, Vietnam was united under communism with Laos also becoming communist. Cambodia also became communist and suffered under the Khmer Rouge’s genocidal regime of communism in the late seventies, where the killing fields took place in 1975. Indonesia also had a strong communist party, which was influential under Indonesia’s fist president and independence leader Sukarno. In 1965, however the Indonesian military purged thousands of suspected communists and millions were killed under Suharto. After independence, Myanmar (Burma) enjoyed almost fifteen years of democracy. This was before a military coup installed a repressive, brutal and highly isolationist authoritarian government up until 2011, when a series of political and economic reforms took place and the release of pro-democracy leader Aung San Suu Kyi. Today the junta are back in charge and Myanmar is once again isolated and cut off from much of the rest of the region and the global economy. Doing business in Myanmar is particularly testing. During the second half of the 20th century, Southeast Asia as a whole faced economic turmoil, poverty, social and ethnic unrest, and political struggle. By the 1980s, economic and political conditions had improved, and the region began to develop rapidly, however this was not to last. The Asian Financial Crisis In July 1997, East and Southeast Asia experienced the worst financial crisis in the region’s history. Fears of a global economic meltdown were sparked by what by 1997 was an interconnected region and a global economy that was by this point truly connected to Asia – globalization of finance led to fears of financial contagion across the world. The Asian Financial Crisis started in Thailand with the collapse in value of the Thai baht when the Thai government was forced to float the baht due to a lack of foreign currency to support its currency peg against the United States dollar. Thailand had acquired significant foreign debt that made the country effectively bankrupt even before its currency collapsed. The contagion started in Thailand where both the country’s national bank and commercial interests had taken on non-performing loans and investments in unproductive ventures. Capital flight from Southeast Asia then took place, beginning a regional, Asian and global chain reaction where money was pulled out of Asia – hence the Asian Financial Crisis. This showed the weak fundamentals in which Southeast Asia’s rapid growth was based – the period of crony capitalism could not be sustained. As the crisis spread across Southeast Asia, currencies began to collapse, stocks and assets crashed in value and private debt shot up. Indonesia and Thailand were, and continue to be, the biggest economies in the region and therefore were most affected by the crisis. Laos, Malaysia and the Philippines were also affected, whereas tiny Brunei and Singapore, were less exposed. Vietnam was also less affected, but the totality of the crisis meant that economic confidence and demand was lost throughout the region. ASEAN’s four biggest economies saw foreign debt-to-GDP ratios rocket from 100 percent to 167 percent, and then above 180 percent during 1993-1996 during the peak of the crisis.15 Whereas Southeast Asia had seen large inflows of foreign investment as economies gradually opened up in the decades of the 1980s and seemingly had sound fiscal policies, the International Monetary Fund (IMF) was forced to step in to initiate a $40 billion rescue package to stabilize the currencies of Thailand and Indonesia, the two economies hit hardest by the crisis. Although a global economic crisis was averted, Southeast Asia did not escape unscathed. The huge slump in the Indonesian economy led to widespread rioting after sharp price increases due to a drastic devaluation of the rupiah. After thirty years of authoritarian New Order rule, Indonesian President Suharto was forced to step down in May 1998. Other economies in Southeast Asia saw huge slumps in growth, the Philippines seeing growth drop to around 14 The War of the World: History's Age of Hatred, Niall Ferguson, Penguin, 2009 15 https://www.adb.org/publications/key-indicators-developing-asian-and-pacific-countries-2003
  • 13. PD CONSULTING ASIA | 13 zero. The developed city state of Singapore was relatively insulated from these shocks but due to trade and investment inflows between Malaysia and Indonesia, it too saw economic decline. The Asian Economic Miracle A positive impact of the Asian Financial Crisis on the region was that the countries of Southeast Asia had to work towards greater financial stability and oversight, leading to the robust financial systems that now much of Southeast Asia enjoy today. Unlike the rest of the world, when the west experienced its own fiscal crisis in the United States and Europe in 2008, Southeast Asia was left unscathed. Recession or relative economic decline in today’s west is also not true in the east. Southeast Asia had been gradually improving its financial and fiscal position for a decade. In the aftermath of the Asian Financial Crisis, the economies of Southeast Asia maintained high interest rates to attract foreign investors back into the region and to those seeking a high rate of return. The region experienced high inflows of investment and a huge increase in asset prices. During the same period, the economies of Thailand, Malaysia, Indonesia, Singapore experienced high growth rates of around 8–12 percent of GDP during the late 1980s and early 1990s. This huge achievement is widely known today as the Asian Economic Miracle. A Lasting Legacy It is only in the last two decades that Southeast Asia has really started to enjoy an era of overall peace and economic stability, although it is important to note that some localized peripheral conflicts remain to this day.16 This can sometimes make investment challenging in conflict prone areas which is why risk mapping is vital. It is also no coincidence that this decade has seen the rapid development of the region, for geopolitical stability goes hand in hand with economic prosperity. Today ASEAN is a mix of democracies, semi-democracies, and authoritarian regimes. Colonial rule struggles for independence, war, and conflict, and a hugely scarring Asian Financial Crisis, where the major economies of Southeast Asia were forced to take loans from the western dominated IMF and World Bank, have permanently altered and shifted the attitudes of Southeast Asia today. The economic policies of each country are universally highly nationalistic, protectionist and willing to use state intervention to move economic progress forward. Considering the hundreds of years of subjugation and suffering this should not come as a surprise and is why we see this tendency across the region to this day. Businesses need to check their privilege and understand history before complaining to loudly. Soft approaches work better than publicly shaming governments. Indonesia: The Regional Economic Giant Indonesia is a regional and global giant. The archipelago nation spans 3,000 miles from east to west across the equator, with a population of 260 million people dispersed across 17,000 diverse islands. It is the largest country and economy in Southeast Asia, dwarfing its regional neighbors in scale. Indonesia is seldom discussed in western media, short of earthquakes and natural disasters that are common for a country located in the so called ‘Ring of Fire’ due to the numerous volcanoes that are in the country. What the west is missing is Indonesia’s modernization. Today Indonesia is the world’s 10th largest economy in terms of purchasing power parity, the world’s third largest democracy and a member of the G20 and UN Security Council. It is also the world’s largest Muslim majority country – not the world’s largest Muslim country, which is misnomer often repeated. There are many religions and ethnic groups that make up modern Indonesia and the ‘Unity in Diversity’ mantra that is the country’s guiding principle is reflective of the challenge that Indonesia faces in keeping a hugely disparate country unified. Indonesia’s economy is diverse. From fast growing digital, technology and service sectors in the glitzy-mega mall capital city, which is Jakarta, to booming tourism in areas such as Bali, to the palm and paper plantations of Sumatra, to agriculture, mining, and oil and gas spread across the archipelago, these are all industries that makeup modern Indonesia’s economy. The key to Indonesia’s growth, and tellingly much of Southeast Asia, is a rapidly rising middle 16 Blood and Silk: Power and Conflict in Modern Southeast Asia, Michael Vatikiotis, W&N, 2017
  • 14. PD CONSULTING ASIA | 14 class. Domestic consumption alone is a huge growth driver for Indonesia’s economy and is fueled by the fourth- biggest middle class in the world. Indonesia has undertaken a massive infrastructure building drive as well as a focus on industrialization to gradually shift the country away from a reliance on commodities and towards industrialized manufacturing. The country is already a major textile manufacturer and this trend towards greater industrialization is set to continue as the country develops further. Beyond this, Indonesia is already home to four tech start-ups valued at above $1 billion, going to show that technology and the creative industries are now well and truly contributing to the economy as it modernizes. Western businesses can make use of tech and creative partnerships for growth. Indonesia is also slowly beginning to open protected sectors to foreign investors, meaning new business opportunities are coming online. Overall, the archipelago nations’ massively growing middle class, strategic geographical position, and human capital development agenda are laying the foundations for strong and continued economic growth into the future. The same story applies to the rest of the region. Untapped Potential: Opportunities by Sector There is business and investment potential in every sector across Southeast Asia. From banking to healthcare and beyond, there are boundless opportunities, however the major investment and growth needs of a disparate region in the coming decades are reflective of the developmental convergence that was discussed in the previously. Each country or market are different in economic development, and therefore each market has different opportunities for business, however taking a macro-overview of trends, patterns and the future, there are some standout sectors that provide untapped potential. 1. Infrastructure 2. Digital 3. Manufacturing 4. Energy 5. Services / Creative Industries 6. Consumer Goods Top Business Tips One Region, Different Country Dynamics – don’t enter the region with the same approach as you would in the EU or USA Agility – the need to be flexible to respond to fast changing and fast-moving markets, development in emerging economies, trends etc. Companies that are most successful are fast moving, responsive to change and think about connectivity across the region. People – the importance of community relations and human capital, cultural sensitivity Relationships – networks and relationships are critical in ASEAN from choosing trusted and non-corrupt business partners to government to regulators Competition – the resistance and entrenched interests of existing businesses and interests. Example: ‱ 1 percent of Thais own 58 percent of Thailand’s wealth ‱ 1 percent of Indonesians own almost 50 percent of its wealth ‱ 25 families in the Philippines own more wealth than 75 million Filipinos
  • 15. PD CONSULTING ASIA | 15 Invest for the Long Term The Long Game Long-term investments and incremental progress are the key to success. There is a need to be persistent to work through the bureaucratic barriers. Be prepared to fail. Exploring what works and what doesn’t isn’t an exact science in Southeast Asia. A lot of consumer data doesn’t exist and if it does it’s out of date due to the rapid rate of change and development. The will to persist amidst a challenging business environment is critical. There are little low hanging fruits or short-term gains to be had. Patience is critical. The Elephant in the Room Endemic corruption and entrenched interests from local business to government figures. Ease of Doing Business reports and rankings can be accessed online demonstrating these challenges. Invest and do business with caution and due your due diligence.
  • 16. PD CONSULTING ASIA | 16 About PD Consulting Asia Tell your story in Southeast Asia We help companies and governments tell their story in Southeast Asia. Experts in public relations, content development, digital & design, corporate & public affairs with a network of agencies across the region. Industry Public Relations and Communications Services Specialties Public Relations, Corporate Affairs, Public Affairs, Advertising, Digital, and Design About the Author Edward Parker Managing Director, PD Consulting Asia Edward has now spent over a decade living and working in Southeast Asia as a consultant, advising some of the world’s biggest multinational companies. He has lived and worked in both Jakarta, Indonesia and Yangon, Myanmar (Burma) and has travelled and worked extensively across the region. He has written for The Diplomat magazine and much of the regional press in Southeast Asia. He holds a First-Class Honours degree in International Relations and Politics from the University of Sheffield. He is an expert in issues and crisis management as well as navigating business challenge, from regulatory issues to market entry. Please contact us if you would like to know more about the service offerings we can provide. We provide bespoke market entry business briefs as well as short- and long-term project consultancy, public affairs advisory and marketing communications services. Send our team a message on LinkedIn and connect with us here Follow PD Consulting on LinkedIn here