Análisis Indonesia

 

Indonesia
 
Next-­‐11
 Contries
 
International
 Finance
  Fudan
 University
 

TEAM
 MEMBERS:
  Alejandro
 Contreras
  Lisa
 Bilgeri
  Andrea
 Valderrama
  Fernanda
 Jiménez
 
 

Introduction
Indonesia has gained recent relevance for being one of the countries figured in the “Next-11” list. Indonesia is located in SoutheasternAsia and it is the world largest archipelago formed by more than 8000 islands. It precedes India, South Africa, Brazil and Russia and sits midway within ASEAN, well behind Singapore and Malaysia, far ahead of the Philippines and Cambodia, but at par with Thailand and Vietnam.

Competitiveness
Indonesia is the 44th largest economy in the GCI ranking. Since 2005, the country progressed in each of12 categories of the index. Its 10-position improvement in the ranking is the highest of G20 countries. Indonesia now compares favorably with the BRICS. The strengths, fast growth and sound fiscal management provide a strong fiscal footing. Basic education is accessible to nearly all with recent improvement in quality. Efforts must focus into improving access and quality of higher education. Amongthe critical factors lie the efficiency of the goods market; it’s relatively well assessed, thanks to a competitive tax regime and intense competition. However, bureaucracy and trade barriers still stand in the way. Infrastructure is among the most glaring shortcomings. Ports, roads and railroads are in poor condition. Electricity supply is unreliable and scarce. The uptake of information andcommunication technologies remains limited among businesses, as well as within the population. The public health situation is alarming on several accounts. The rigidity of the labor market contributes to a high degree of informal employment and precarious working conditions. Finally, Indonesia must continue strengthening its institutional framework. Corruption remains a problem: greater transparencyand predictability are needed in the policy-making process.

Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. In 2010, Indonesia increased the manufacturing output and exports, with relatively cheap labor and a complementary domestic market. Exports of naturalresources, such as oil and gas, coal and crude palm oil (CPO) make up 50% of Indonesia’s exports and have been key drivers of growth. The fast growing emerging markets and the sustainable demand for commodities, export growth is likely to remain constant. Imports may grow faster with infrastructure development and strong domestic demand growth. Net exports will likely continue to diminish and, withhigher net income outflows it’s expected the current account will eventually shift into deficit in the medium term.

Industry
The industry sector represents 47%, services 37.6% and agriculture 15.4% of GDP. Divided by the 95 million strong workforce the breakdown is 44% agriculture, 36.9% services and 18.8% industries. Agriculture is the largest employer; many people are living and working in ruralareas. The key industries are petroleum, natural gas, textiles, apparel, footwear, mining, cement, plywood, rubber, food and tourism. The industrial production growth rate is 3.5% in 2011. Textile and apparel manufacturing industry are very important and rank number 14th in the world. But, due to the global recession and the inflow of cheap items from China around 155 textile-producing companieswent bankrupt in 2009. The major agricultural products are rice, cassava (tapioca), peanuts, rubber, cocoa, coffee, palm oil, poultry, beef, pork and eggs. Indonesia is the fourth largest producer of rice and coffee. The service sector is pillar in Indonesia’s economy with a growing IT service sector, a well developing banking and hospitality sector. Because of beautiful islands, like Bali, the...