EU - Indonesia: Tapping Abundant Potentials Dupito Simamora, Charge d Affairs
Outline Geography Cultural, Social and Political Overview Economy and Market Robust Investment Climate Indonesia s Future
EU - Indonesia: Tapping Abundant Potentials Geography Sabang to Merauke 5253 km Ireland to Cyprus 4428 KM 17,508 islands The largest achiphelago 3 Time Zone 1,910,000 km2 of land 6,279,000 km2 of sea 81,000 km coastline
EU - Indonesia: Tapping Abundant Potentials Geography
CULTURAL, SOCIAL AND POLITICS
EU- Indonesia: Tapping abundant potentials Diversity 250 Million : median age 24 300 ethnic groups 706 living languages 6 major religions many beliefs Bhineka Tunggal Ika Unity in Diversity
EU - Indonesia: Tapping abundant potentials tolerance Jakarta Istiqlal Mosque is next to Jakarta Cathedral
EU - Indonesia: Tapping abundant potentials Stable Democracy voting is cool! Regular Free Elections 185,000,000 70 % turnout 10 parties Very Free Media Strong Parliament Robust CSO Rule of Law Tough ACC
EU - Indonesia: Tapping abundant potentials socio - political state Multicultural Democratic Tolerance Demographic bonus for the next 20 years Is the largest moslem democracy performing well in the economy..?
ECONOMY AND MARKET POTENTIAL
EU - Indonesia: Tapping abundant potentials Demography of 240 million population 4th largest in the world 50% below 30-37% below 20-19 % below 10 demographic bonus 66% 2010-68% in 2030 education budget : 20% of budget workforce 144 million
EU - Indonesia: Tapping abundant potentials State of economy G20 : 16th largest economy USD1.2 T GDP GDP per cap USD 3,5243 (14) 145 million middle class (15) 171 million (2020) Debt to GDP 25.02 %
EU - Indonesia: Tapping abundant potentials State of economy
EU - Indonesia: Tapping abundant potentials Vibrant healthy population wealthier healthier greater awareness
EU - Indonesia: Tapping abundant potentials INTERNET PENETRATION #4 Facebook User #5 Twitter Account #4 Social Network Users : 109,000,000 Mobile phone sold : 313,000,000 or 125% Indonesian population 70% internet users through mobile phones ICT spending up to $20 billion
EU - Indonesia: Tapping abundant potentials Strategic location 58 % of world shipping $ 435 billion
Kuala Tanjung Port Development
EU - Indonesia: Tapping abundant potentials INDONESIA EU Comprehensive Economic Partnership Agreement Kick-off negotiations last September 2016 Bringing two giant markets together for increased trade and investment
Belgium - Indonesia: Tapping abundant potentials ROBUST INVESTMENT CLIMATE
EU - Indonesia: Tapping abundant potentials ARE THE INVESTORS COMING? 1 st Semester 2014-2016 Direct Investment Realisation
Top 5 Investors to Indonesia 1 st Semester 2016
Top 10 EU Investment Realization (1 st Semester 2016) No Country Investment (US$ Millions) 1 Netherlands 266.93 2 Switzerland 83.43 3 Luxembourg 75.51 4 UK 54.87 5 Germany 32.73 6 Italia 15.06 7 France 6.39 8 Belgium 1.05 9 Spain 0.83 10 Denmark 0.73
Strengthening Strategy Investment Priority Sectors Industry Infrastructure Agriculture Labor-intensive industry Import-substitution industry Export-oriented industry Downstream industry of natural resources Maritime Tourism, SEZ & Industrial Park 35 GW power generation Food estate Textile Chemical & Pharmaceutic al Electronics Machinery 24 Sea ports Corn Plantation Food & Beverages Iron & Steel CPO & derivative products Rubber products Cattle Furniture Wood products, pulp & paper Fish & derivative products Cacao Sugar Smelter Ship building Strategic tourism areas Fishing industry MICE Cold storage 8+11 SEZs Footwear Automotive Shrimp 15 New Ind. Parks
Strengthening Strategy Progress of Licensing Simplification POWER GENERATION 49 permits 923 days 25 permits 256 days AGRARIA ( 4 improvements) Land use permit (HGU) 3,000-6,000 ha 123 days 90 days FORESTRY ( 13 Improvements) Forest land use permit 111 days 47 days TRANSPORTS ( 4 improvements) AGRICULTURE (9 improvements) Special terminal permit 30 days Lantation permit 751 days 5 days 182 days Next target: Sea port, Construction &, Environmental permits. INDUSTRY ( 8 improvements) Industrial business permit 672 days 152 days TOURISM AREA (6 improvements) Tourism area permit (TDK) 661 days 188 days TAX ALLOWANCE APPLICATION Not specified, unclear 28 days
TAX HOLIDAY Strengthening Strategy Incentives TAX ALLOWANCE IMPORT DUTY FACILITY (MoF Regulation No. 159/PMK.010/2015) (Government Regulation No.18/2015) (MoF Regulation No.176/PMK.011/2009) 5-20 years Tax relief facility, starting from the commencement of commercial production. 100 % Reduction of income tax 9 pioneer industries: Including agroindustry, shipbuilding, main manufacturing industry of SEZ, and non-ppp IDR500 economical infrastructure. billion Minimum investment plan 30 % of investment value Reduction of corporate net income tax for 6 years, 5% each year. 143 business segments Eligible for tax allowance, expanded from 129 segments in the previous regulation. Under certain requirements among others: investment value or export orientation, menpower absorption, local content, and project location (especially outside Java island). Machines, goods, materials for production 2 years import duty exemption or 4 years for companies using locallyproduced machines (min.30%). Industries Which produces goods and/or services, including: 1. Tourism and culture 2. Public transportation 3. Public health services 4. Mining 5. Construction 6. Telecommunication 7. Port
EU - Indonesia: Tapping abundant potentials INDONESIA S FUTURE
Future : 2030
future: 2050 7 Engines of Asia s growth: PRC India Indonesia Japan Korea Thailand Malaysia 1950: Asia s GDP 15 % 2010: Asia s GDP 27 % 2050: Asia s GDP 51 % US GDP 15 % Europe GDP 18 %
EU - Indonesia: Tapping abundant potentials IMPORTANT LINKS http://www.bkpm.go.id (Investment Coordinating Board) http://www.kemendag.go.id/en (Ministry of Trade)
Thank you Indonesian Embassy Brussels.