Indonesia

Indonesia Overview - Indonesia, a country of 279.5 million people, is Southeast Asia's largest economy with a GDP of approximately $1.32 trillion USD in 2022. The economy has shown a strong rebound since contracting in 2020, exceeding the 2019 GDP. By the end of 2022, Indonesia’s economy grew by 5.3%, returning to its decade of growth above five percent. The government has focused on diversifying the economy and reducing barriers to doing business to propel the economy beyond middle-income status over the next generation. Indonesia is classified as a newly industrialized country and is a member of the G20. The country has made significant gains in poverty reduction, cutting the poverty rate by more than half since 1999, to under 10 percent in 2019 before the COVID-19 pandemic hit. The GDP growth is projected at 5.1 percent in 2022, supported by growing commodity exports and accommodative fiscal policy to weather the pandemic. Indonesia's economic planning follows a 20-year development plan, spanning from 2005 to 2025, segmented into 5-year medium-term development plans called the RPJMN (Rencana Pembangunan Jangka Menengah), each with different development priorities

Footnotes:
1 https://www.trade.gov/country-commercial-guides/indonesia-market-overview
3 https://www.worldbank.org/en/country/indonesia/overview
4 https://www.worldbank.org/en/news/press-release/2023/12/13/indonesia-economic-growth-to-ease-slightly-in-2024-as-commodity-prices-soften.

Economic Strengths of Indonesia

Abundant Natural Resources: Indonesia boasts rich deposits of minerals, oil, gas, and timber, forming the backbone of several key industries and generating significant export revenue. (Source: World Bank, 2023)
Large and Growing Domestic Market: With over 270 million people, Indonesia possesses a vast domestic market that presents significant opportunities for businesses across various sectors. (Source: World Bank, 2023)
Strategic Location: Situated between the Indian and Pacific Oceans, Indonesia serves as a vital trade hub, connecting major Asian economies and facilitating international commerce. (Source: Asian Development Bank, 2022)
Demographic Dividend: Indonesia's young and growing population offers a valuable pool of labor for various industries, potentially boosting productivity and economic growth. (Source: IMF, 2022)
Government Reform Efforts: Recent initiatives aimed at improving the regulatory environment, reducing corruption, and attracting foreign investment have shown promise in fostering a more conducive business climate. (Source: OECD, 2023)

Economic Weaknesses of Indonesia

Infrastructure Deficiencies: Inadequate infrastructure, including transportation networks, power grids, and logistics facilities, hinders efficient economic activity and raises transaction costs. (Source: World Bank, 2023)
High Income Inequality: A significant portion of Indonesia's wealth remains concentrated among a small elite, limiting the overall purchasing power and hindering inclusive economic growth. (Source: UNDP, 2022)
Bureaucracy and Corruption: Navigating complex administrative procedures and tackling corruption can be challenging for businesses, discouraging investment and stifling economic dynamism. (Source: Transparency International, 2022)
Vulnerability to External Shocks: The Indonesian economy is susceptible to fluctuations in global commodity prices, financial markets, and natural disasters, posing risks to stability and growth. (Source: IMF, 2022)
Skill Mismatch: While Indonesia has a large workforce, there is a gap between the skills available and those demanded by the evolving economy, potentially hindering productivity and labor market participation. (Source: Asian Development Bank, 2022)

Footnotes

Unless otherwise noted, the facts below come from the CIA Fact Book - https://www.cia.gov/the-world-factbook/countries/indonesia/#communications

Terrain	Value
Location	Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean
Percentage of English Spoken	30%
Population	279,476,346 (2023 est.)
High Tech Cities	Jakarta (Capital this could change), Bandung, Yogyakarta, Surabaya, Bali
Main Industries	petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewelry, and tourism
GDP	5.31% in 2022,
Government Type	presidential republic
Recent History	Value
Urbanization	58.6% of total population (2023)
Internet Connectivity	62% (2021 est.)
Moody's Credit Rating	Moody's affirms Baa2 ratings (2023)
Travel Advisory	Indonesia - Level 2: Exercise Increased Caution
Corporate Headquarters	Bank Central Asia (BCA) Bank Rakyat Indonesia (BRI) Bank Mandiri PT Astra International Tbk PT Telekomunikasi Indonesia Tbk (Telkom Indonesia) PT Unilever Indonesia Tbk PT Hero Supermarket Tbk PT Astra Honda Motor PT Freeport Indonesia PT Gudang Garam Tbk
NATO Member	No
Corruption Score	34/100
VAT Tax	11%