indonesia richard rothman senior commercial officer u.s. embassy - jakarta
TRANSCRIPT
IndonesiaIndonesia
Richard RothmanSenior Commercial Officer
U.S. Embassy - Jakarta
GeographyGeography•Archipelago of 17,000 Islands•Size of United States•Located in South East Asia
Indonesia
Facts and FiguresFacts and Figures
Population
Diversity
4th Largest Country in the World
230 Million
300 Dialects; 5 Main Religions
IndonesiaIndonesia
• 1995 Era of the Big Emerging Markets
• 1997 Asian Financial Crisis
• 1998 Era of Economic & Political Reforms
• 2004 Election of Susilo Bambang Yudhoyono
Indonesia Historical PerspectiveIndonesia Historical Perspective
Indonesia TodayIndonesia Today
Security Situation
Political Conditions
Economic Performance
Assessing the Commercial Environment:Assessing the Commercial Environment:
Security Conditions ImprovingSecurity Conditions Improving
• Security Situation:
October 12, 2002 Bali Bombings Kill 202
August 5, 2003 Marriott bombing
September 2004 Australian Embassy Bombing
October, 2005 Bali Bombings Kill 23
2006 No Bombing
Political ConditionsPolitical Conditions
1998 Financial Crisis prompts Suharto’s resignation; VP B.J. Habibie becomes President
1999 Democratic Elections Held Abdurrachman Wahid
becomes President
2001 Abdurrachman Wahid impeached;VP Megawati becomes President
2004 First Democraticly Elected Government; SBY becomes President
Key Economic IndicatorsKey Economic Indicators•GDP Growth: 2006 = 5.8%
2005 = 5.6% 2004 = 4.8%
Per capita GDP 2006 = $ 1,430Per capita GDP 2005 = $ 1,233
•Purchasing Power Parity = $3,800 (2006, estimated)
•Inflation Rate: 2007 = 6.10%, target 2006 = 6.60%
2005 = 17.11% (Fuel prices) 2004 = 6.40%
•Exchange Rate: 2007 = Rp9,300 to US$1.00, estimated2006 = Rp9,166 to US$1.002005 = Rp9,810 to US$1.002004 = Rp8,600 to US$1.00
Key Economic IndicatorsKey Economic Indicators
Purchasing Power Parity = $3800
GDP Growth
4.80%
5.60% 5.80%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
Year
GDP Growth
GDP Growth 4.80% 5.60% 5.80%
2004 2005 2006
Per
cent
age
Key Economic IndicatorsKey Economic Indicators
Per capita GDP
$1,233.0
$1,430.0
$1,100.0
$1,150.0
$1,200.0
$1,250.0
$1,300.0
$1,350.0
$1,400.0
$1,450.0
Year
Per capita GDP
Per capita GDP $1,233.0 $1,430.0
2005 2006
US
$
Key Economic IndicatorsKey Economic Indicators
Consumer price inflation
17.11%
6.60%6.40% 6.10%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Year
Consumer price inflation
Consumer priceinflation
6.40% 17.11% 6.60% 6.10%
2004 2005 2006 2007
Per
cent
age
Key Economic IndicatorsKey Economic Indicators
Exchange rate
Rp9,810
Rp9,166
Rp8,600
Rp9,300
Rp7,800
Rp8,000
Rp8,200
Rp8,400
Rp8,600
Rp8,800
Rp9,000
Rp9,200
Rp9,400
Rp9,600
Rp9,800
Rp10,000
Year
Exchange rate
Exchange rate Rp8,600 Rp9,810 Rp9,166 Rp9,300
2004 2005 2006 2007
Rup
iah
to U
S$1
.00
11.97%
16.41%
6.72%
10.13%
35.41%
4.97%4.70%5.97%
3.72%
U.S. - Indonesia TradeU.S. - Indonesia Trade
• In 2005, U.S. was the 4th Largest Source of Indonesian imports after Japan, Singapore and China
USA
Other countries combined
Japan
Singapore
China
Malaysia
ThailandSaudi Arabia South Korea
16%
45%
4%5%
8%
10%
12%
U.S. - Indonesia TradeU.S. - Indonesia Trade
In 2006, Indonesian Imports from USA = $3.08 Billion
Machinery
Misc Grain
Cotton
AircraftElectrical
Soap/Wax Etc
Others
7%
6%5% 11%
23%
9%6%
33%
U.S. - Indonesia TradeU.S. - Indonesia Trade
In 2006, Indonesian Exports to USA = $13.40 Billion
Other
Fish & Shellfish Natural rubber and similar gums
Apparel & Household Goods
Manufactured Goods Classified
Chiefly by Material
Sporting and camping apparel, footwear and gear
Furniture, household items,
baskets
Television receivers, vcr's & other video equip
2006 U.S. Exports to Indonesia $3.08 billionU.S. Imports from Indonesia $13.40 billionU.S. Deficit $10.32 billion
2005 U.S. Exports to Indonesia $3.05 billionU.S. Imports from Indonesia $12.02 billionU.S. Deficit $8.97 billion
2004 U.S. Exports to Indonesia $2.67 billion
U.S. Imports from Indonesia $10.81 billionU.S. Deficit $8.14 billion
U.S. Trade Balance with IndonesiaU.S. Trade Balance with Indonesia
U.S. Trade Balance with Indonesia
$2.67 $3.05 $3.08
$10.81 $12.02
$13.40
$8.14
$8.97
$10.32
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
Year
U.S Exports to Indonesia
U.S Imports from Indonesia
U.S. Deficit
U.S Exports toIndonesia
$2.67 $3.05 $3.08
U.S Imports fromIndonesia
$10.81 $12.02 $13.40
U.S. Deficit $8.14 $8.97 $10.32
2004 2005 2006
U.S. Trade Balance with IndonesiaU.S. Trade Balance with Indonesia
In B
illi
on
Indonesia Leads ASEAN Region Indonesia Leads ASEAN Region for Export Success in FY 2007for Export Success in FY 2007
71
2620 18
12 9
0
10
20
30
40
50
60
70
80
90
100
Total Export Success FY 2007
FY 2007 Export Success Report for ASEAN Countriesas of February 21, 2007
Indonesia 71
Vietnam 26
Malaysia 20
Singapore 18
Philippines 12
Thailand 9
1
Top Ten US Exporting States Top Ten US Exporting States to Indonesia - 2005to Indonesia - 2005
TN6% LA
6%
IL7%
WA10%
TX13%
CA17%Others
28%
GA3%
NY3%
NC3% VA
4%
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
16,000.00
18,000.00
1998 1999 2000 2001 2002 2003 2004 2005 2006
Million USD
Total Every Country
US
Foreign Direct Investment Foreign Direct Investment Approval in IndonesiaApproval in Indonesia
As
of J
anua
ry 2
007
Year
13
,63
5.0
0
56
5.8
0
10
,89
4.3
0
14
2.8
01
6,0
14
.90
23
6.3
01
5,2
01
.90
87
.70
9,9
55
.40
46
8.5
0
14
,27
8.1
02
11
.70
10
,41
5.6
01
33
.30
13
,57
9.2
0
91
.20
13
,88
9.4
01
33
.20
Top 10 Things to Know about Top 10 Things to Know about Doing Business in IndonesiaDoing Business in Indonesia
1 Need an Agent» Required by Law» Needs Government Permit
» Familiar with U.S. Business Practices
2 Most Business People Speak English
3 State Owned Enterprises = 40% Market Activities
4 Corruption
5 Problems With Contract Enforceability
6 IPR Violations (2005 Piracy $253 Million)
7 Deteriorating Infrastructure
8 Active Foreign Business Community
Continued...Continued...
Top 10 Things to Know about Top 10 Things to Know about Doing Business in IndonesiaDoing Business in Indonesia
9 U.S. Government Agencies Who Can Assist You:
–U.S. Embassy (Commercial Service, ECON)
–Trade Development Agency, EXIM bank, OPIC
10 Secretary Rice signed waiver for Indonesia – January 2006
FMS and Direct Sales of Defense and Security Equipment allowed
•Licensing requirements still apply, as always
Continued...Continued...
Top 10 Things to Know about Top 10 Things to Know about Doing Business in IndonesiaDoing Business in Indonesia
Market OpportunitiesMarket Opportunities
• Strong Demand• Imported Products $187.4 Million in 2006• U.S. Market share : 10-15%• Sizeable Police Budget:
2005 Credit export: $64.71 Million
State Budget: $1.1 Billion
2006 State Budget: $1.6 Billion
Security & Safety:
Anasia Silviati
• Power Shortage in 2005, demand increase 8%/year
Imported Products Over $688 Million (Estimated)
13 Future Projects - Demand for Subcontracts
• Oil and Gas Investment
$7.7 Billion in 2006
U.S. Products $200 Million in 2005
15 New Blocks Offered in 2006
Market OpportunitiesMarket OpportunitiesEnergy:
Anasia Silviati
Market OpportunitiesMarket Opportunities
• Market size is estimated $4 billion in 2006
• U.S. Share of import market estimated at 15%
• Growth rate is forecasted at 30 – 40%
• Imports accounted for 90% of market
• Cellular operators invest $1.9 billion in 2006
• Best prospect: Cellular System, 3G Software, Network Management Systems, Cellular HandSets
Telecommunication Equipment and Services
Kalung Riang
Market OpportunitiesMarket OpportunitiesIndustrial Chemicals :
• Dependence on imports of chemicals
– Total imports in 2006: $8.1 Billion
– U.S. Market Share : 5%
– Jan-July 2006: $101.6 Million In Foreign Direct Investment
• Major players: USA, Japan, Germany,
China and South Korea
• Promising sub-sectors:
– Organic chemicals (HS 29)
– Plastic products & raw materials (HS 39)
Anasia Silviati
Market OpportunitiesMarket OpportunitiesEnvironmental Technologies:
• The market estimated at $23 million and projected to grow by 10 percent in 2006.
• Major issues: Deforestation, Water Pollution, Sewage, Air Pollution, and Smoke and Haze from Forest Fires.
• The U.S. is strong in pumps and water treatment chemicals.
• U.S. exports to Indonesia = $10 million in 2005.
• Main suppliers are USA and Japan.
Aulia Rochaini
• Opened to foreign investment in 1998
• Sales in 2006 predicted to reach $5.4 billion
• Most foreign investment is in the hypermarket sector
• Foreign retailers account only 8 percent of outlets, but capture 40 percent of the total retail sales
• U.S. retailers are strong in the specialty shop and minimarket sectors
Retail :
Market OpportunitiesMarket Opportunities
Henry Sutanto
Franchises :
Market OpportunitiesMarket Opportunities
• Home to 250 foreign and 50 local franchises
• Best prospective sub-sectors: Food and Beverages, Educations, Retail and Business Aids and Services.
• American franchises dominate, but strong competition come from Singapore, France, Australia, the United Kingdom, Thailand, and domestic franchises
• Estimated future growth around 5 percent.
Hanry Sutanto
• Estimated market was $230 million in 2006
• 2006 Imports estimate= $190 million: over 50 percent was from U.S
• Competitors: China, Taiwan, and European Countries
• Best Prospects: Degenerative Prevention Products,
Diet and Aesthetics Products, Maintenance
of Vitality and Stamina Products, and Vitamins
and Minerals
Food Supplements :
Market OpportunitiesMarket Opportunities
Sharon Chandra
• Market size is estimated $1.9 billion in 2006
• Growth rate is forecasted at 15%
• Imports accounted for 50 – 80%
• Best Prospect: PC’s+ High End Servers
• U.S. Share of import market estimated at 70-80%
Information Technology :
Market OpportunitiesMarket Opportunities
Kalung Riang
• 18 scheduled and 35 chartered airline companies
• Number of domestic passengers increase 10%, estimated at
27.8 million in 2006
• Imports of aircraft & parts in 2006: $290 million
• U.S. products hold 20% market share
• Opportunities: leasing commercial aircraft,
upgrading airports facilities, supplying spare
parts
Aviation :
Market OpportunitiesMarket Opportunities
Anasia Silviati
List of the Indonesian government’s List of the Indonesian government’s priority projectspriority projects
• Security Equipment and Services: Airport and Seaport• Waste Management & Water Treatment• Energy• Transportation Projects: City of Jakarta• Health Care Services• Electronic Government• Internet Community Access Point
U.S. & Foreign Commercial ServiceU.S. & Foreign Commercial ServiceU.S. Embassy JakartaU.S. Embassy Jakarta
Services Offered:
• Single Company Promotions• Gold Key Service• International Partner Search• Market Research• Video Conferencing• Company Background Check• Asia Now Initiative
www.buyusa.gov/[email protected]
Important WebsitesImportant Websites
Business Chambers U.S. Government
www.usembassyjakarta.org
http://www.state.gov/r/pa/ei/bgn/2748.htm
www.buyusa.gov
www.opic.gov
www.exim.gov
www.tda.gov
www.export.gov
www.amcham.or.id
www.aiccusa.org
www.us-asean.org
www.kadin.or.id