2. What Indonesia meant
British - Indian islands, or Further India
Dutch - Islands Nederlands Indie, Dutch India’ or ‘Dutch
Indies
India meant simply what modern Europeans now refer to as
Southeast Asia.
3. History
1670-1900 - Dutch colonists bring the whole of Indonesia
under one government as the Dutch East Indies.
1942 - Japan invades Dutch East Indies.
1945 - The Japanese help independence leader Sukarno
return from internal exile and declare independence.
1949 - The Dutch recognize Indonesian independence after
four years of guerrilla warfare.
4. History 1950-1970
1950s - Maluku Island (Moluccas) declares independence
from Indonesia and fights an unsuccessful separatist war
1962 - Western New Guinea, or West Papua, held by the
Netherlands, is placed under UN administration and
subsequently occupied by Indonesian forces.
1965 - Hundreds of thousands of suspected Communists are
killed in a purge of leftists which
1966 - Sukarno hands over emergency powers to General
Suharto, who becomes president in March 1967.
1969 - West Papua formally incorporated into Indonesia,
becoming Irian Jaya Province.
5. History 1970-1999
1975 - Portugal grants East Timor independence.
1976 - Indonesia invades East Timor and incorporates it as a
province.
1998 - Protests and rioting topple Suharto; B J Habibie
becomes president.
1999 - Ethnic violence breaks out in Maluku. Free elections
are held in Indonesia.
6. History 2000
2000 - Two financial scandals dog the Wahid administration:
Buloggate (embezzled funds from the state logistics agency)
Bruneigate (missing humanitarian aid funds from the Sultan of Brunei). The
corruption case against former President Suharto collapses.
Irian Jaya separatists become more vocal in demanding a referendum.
2001 - Ethnic violence in Kalimantan as indigenous Dayaks force out
Madurese transmigrants. Mass political demonstrations by Wahid's
supporters and opponents. IMF stops further loans citing lack of
progress in tackling corruption.
2001 July - Parliament dismisses President Wahid over allegations of
corruption and incompetence. Vice President Megawati Sukarnoputri is
sworn in as his replacement, even as Wahid refuses to leave the
presidential palace.
7. History Cont.
2002 January - Indonesia inaugurates human rights court
2002 May - East Timor becomes independent.
2002 August - Constitutional changes are seen as a step
towards democracy. For the first time, voters will be able to
elect a president and vice president.
2004 First-ever direct presidential elections, Former
general Susilo Bambang Yudhoyono Wins
8. Obama Visits Indonesia
2010 -President Barack Obama
visits, hailing Indonesia as an
example of how a developing
nation can embrace democracy
and diversity.
2011- Three-month strike by
8,000 workers at copper and
gold mine owned by US company
Freeport-McMoran in the
province of Papua.
9. A statue of young Barack “Barry”
Obama in Indonesia.
10. Obama lived in
Indonesia from
ages 6-10
Attending school
in the Indonesian
language.
“The Future
Belongs to those
who believe in
the power of
their dreams”
18. Currency / Cost
$1 USD = 11,764.71 Rupiah (RP)
Apples (1kg) = 25,936.35 Rp
Tomato (1kg) = 9,864.97 Rp
Potato (1kg) = 11,343.25 Rp
Meal for 2, Mid-range Restaurant,
Three course =150,000.00 Rp = $12USD
New Minimum Wage Jakarta Set at IDR 2.4 Million ($213) per
20. Political System
Executive Branch
President & Vice President cabinet
5 year term, two term max
Legislative Branch
It has the power to set or change the Constitution and appoints (or
impeaches) the president
Consist of 550 member to draw up and pass laws, annual budget and etc.
Judicial Branch
General Court
Religious Court
Military Court
Administrative Court
Independent Supreme Court
2003-Constitutional Court
21. Marriage
Marriage Age:
Male 19, Females 16
Provision for marriage below minimum age is subject to
judicial discretion and parental consent
Marriage is considered monogamy,
Marriage Law does not prohibit polygamy for those
religions that allow it (Islam, Hinduism, Buddhism)
Permitted with consent of existing wife or wives
Judicial permission, by fulfilling conditions specified by law
Proof of financial capacity
Safeguards that husband will treat wives and children
equally;
Court inquiry into validity of reasons for wishing to contract
polygamous marriage
22. Education
•Only a third of Indonesian students
complete basic schooling.
•Less than half of the teachers
possess the minimum qualifications
to teach
•Teacher absenteeism around 20
percent.
•Many teachers work outside of the
classroom to improve their incomes.
•40% of the budget is siphoned off in
bribery or embezzlement.
27. Doing Business
Time is considered limitless in Indonesia
Indonesians do not hurry, but rather see hurrying as impolite.
They are generally not punctual, but expect foreigners to be on
time.
Do what is achievable rather than follow rigid schedules.
Flexibility and patience are critical to success. Things change
with time, and nothing is predictable.
Drawn-out bargaining and negotiation is assumed and
encouraged.
Foreigners must be patient and prepared for a slow process.
Lengthy discussions must occur in order to develop respect in
the relationship.
49. Economy – Poverty adjusted
The Indonesian government defined the poverty line at a
monthly per capita income of 233,740 rupiah or
approximately USD $25 ($0.83/day).
Applying the poverty threshold used by the World Bank, of
population living on less than USD $1.25 a day
($37.50/month) as poor, the percentages of the population
living in poverty will rise significantly.
According to the World Bank, the Indonesian population
that lives on less than USD $2 a day, 2009 rises to 50.6% of
the population
A large proportion of the Indonesian population is
in fact near poor.
53. Future Prospects
Business Environment – Government Efforts
Equal treatment of domestic and foreign investors
Shortening the length of time to do business
Allowing foreign investors to employ expatriates in some
positions
Right of foreign investors to repatriate profit as: dividends,
reduction of capital, liquidation payments, royalties or
technical fees
Granting tax facilities based on numbers of local employees
54. Future Prospects
Economy dynamics
Far more diversified economy than one would think
from being on the outside.
Strong macroeconomic position
16th
economy in the world,
Inflation falling to single digits
Government Debt to GDP ratio far better than a lot of
advanced economies.
55. Future Prospects
Young population
Urban proportion of the population is increasing
improving individual incomes.
90 million additional consumers entering the market
The second strongest spending-power in the world
after China.
56. Future Prospects – Tail Winds
The Rise of Asian Consumer
Urban Population Increase
Working Population Growth
Tech driven and digital technology proliferation
production flexibility
efficiency
communication
Faster, Cheaper, Better products and services
58. Future Prospects – Head Winds
Productivity Requirements to maintain 7% growth
Uneven distribution of growth across the dominion
and rising inequality.
Infrastructure and resource constraints
59. Future Growth - Recommendations
Tackle each challenge methodically,
With clear strategy,
As a long term effort that extends over a number
of administrations and
As a national rather than political effort.
60. Future Growth - Recommendations
Boost productivity
To work with sense of urgency in removing barriers
to competition.
Telecommunication and Broad Band internet. Reaching the
market of products and services avoiding physical barriers
Mitigate the barriers to higher productivity.
Financial Services: Simplify present regulation
Retail Trade: Limit areas of protectionism
Transportation: Address the aging and often nonexistent
infrastructure
61. Future Growth - Recommendations
Rapid increase of the affluent middle classes of India, China,
and domestically
High demand for food and agricultural products
Study ways of boosting the productivity in agriculture and fishing
industry.
The required increase in productivity in agriculture has
to reach 60% from 3tons per farmer to five tons in 2014.
Utilizing more modern and efficient methods of farming
instead of deforestation.
More efficient cultivation of the land rather
than increasing the available land.
62. Future Growth - Recommendations
High demand for food and agricultural products (Cont.)
Three fronts in the area of agriculture productivity.
o Boost yields.
o Shift production to more profitable crops.
o Reduce waste in the process of handling the
products though out the supply chain.
63. Future Growth - Recommendations
Rapid urbanization and high demand for energy,
rough materials, water and other critical to growth
resources.
Work in the area of intelligent resource
allocation.
Expand the network of water supply that is safe
and adequate.
Address basic sanitation with priorities in areas that
have very high population densities.
64. Future Growth - Recommendations
High demand for energy resources
Take advantage of unconventional energy
sources.
Geothermal Energy
Biofuels
Biomass
Strive to modernize conventional energy
source utilization.
Estimated savings by 2030 to be as high as 15%.
65. Future Growth - Recommendations
Significant size of skilled labor force requirements
To maintain 7% growth demand for skilled labor
from todays 55 million in 2030 need to become
113 million.
Increasing the female participation to the work force
It is the view of the World Bank and others that by 2030
Indonesia will face a 9 million workforce shortfall.
66. Future Growth - Recommendations
Teaching standards must improve
Investment in buildings and teaching material
Designing curriculum that will address future
demands in skills.
67. Conclusions
Indonesia is the 16th
-largest economy in the world
It has 45 million members of the consuming class
53% of the population resides in cities
The urban population is responsible for 73% of GDP
There are 55 million skilled workers in the Indonesian
economy
There is a $500 billion market opportunity in
Consumer services
Agriculture and Fisheries
Resources
Education