INDONESIA INVESTMENT COORDINATING BOARD

Trade to Invest in Remarkable Indonesia

Enhancing Export and Domestic Market through Investment
invest in
2013 byIndonesian Investment Coordinating Board. All rights reserved
Mahendra Siregar
Chairman
Trade and Investment Seminar | Jakarta, 17 October 2013
The Investment Coordinating Board of the Republic of Indonesia
2
Source: Ministry of Trade RI, 2013.
Trade
Indonesia Trade Balance, 2008-2013
(USD Million)
Description 2008 2009 2010 2011 2012
Trend(%)
2008-2012
Jan-Jul
Change(%)
2013/2012
2012 2013
Export 137,020 116,510 157,779 203,497 190,020 12.9 113,044 106,177 -6.1
Oil & Gas 29,126 19,018 28,040 41,477 36,977 13.4 23,089 18,611 -19.4
Non Oil & Gas 107,894 97,492 129,740 162,020 153,043 12.8 89,955 87,567 -2.7
Import 129,197 96,829 135,663 177,436 191,690 15.0 112,804 111,828 -0.9
Oil & Gas 30,553 18,981 27,413 40,702 42,564 15.3 24,197 26,244 8.5
Non Oil & Gas 98,644 77,849 108,251 136,734 149,125 14.9 88,606 85,584 -3.4
Total Trade 266,218 213,339 293,442 380,932 381,710 13.9 225,848 218,006 -3.5
Oil & Gas 59,679 37,999 55,452 82,179 79,541 14.4 47,287 44,855 -5.1
Non Oil & Gas 206,539 175,340 237,990 298,754 302,168 13.8 178,561 173,151 -3.0
Balance of Trade 7,823 19,681 22,116 26,061 -1,669 0.0 241 -5,651 -2,447.9
Oil & Gas -1,427 38 627 776 -5,587 0.0 -1,108 -7,634 588.9
Non Oil & Gas 9,250 19,643 21,489 25,286 3,918 -13.6 1,349 1,983 47.0
The Investment Coordinating Board of the Republic of Indonesia
3
Trade
Indonesias Exports, By Top-10 Products in 2011
(USD Million)
Source: Ministry of Industry RI
and Statistics Agency, 2013.
Rank ManufacturingProducts 2008 2009 2010 2011
Trend
2010-2011
Share
in 2011
1 Coconut/palm product 16,104,664 12,924,892 17,253,752 23,179,189 34.3% 19.0%
2 Rubber product 7,751,090 5,020,189 9,522,623 14,540,361 52.7% 11.9%
3 Textile 10,116,346 9,245,132 11,205,515 13,234,017 18.1% 10.8%
4 Metal, machinery and automotive 10,942,505 8,701,121 10,840,032 13,191,710 21.7% 10.8%
5 Electronics 7,677,048 7,899,592 9,254,563 9,536,136 3.0% 7.8%
6 Copper, tin product 5,654,641 4,241,502 6,505,973 7,500,962 15.3% 6.1%
7 Basic chemical 3,821,506 3,168,301 4,577,664 6,119,906 33.7% 5.0%
8 Pulp and paper 5,219,622 4,272,377 5,708,164 5,769,378 1.1% 4.7%
9 Food and beverage 3,202,403 2,569,307 3,219,558 4,505,240 39.9% 3.7%
10 Wood product 4,200,212 3,441,452 4,280,346 4,474,988 4.5% 3.7%
Total (10Commodities) 74,690,037 61,483,865 82,368,190 102,051,888 23.9% 83.5%
Total (All Commodities) 88,393,496 73,435,841 98,015,076 122,188,727 24.7% 100.0%
The Investment Coordinating Board of the Republic of Indonesia
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Trade
Indonesias Imports, By Top-10 Products in 2011
(USD Million)
Source: Ministry of Industry RI
and Statistics Agency, 2013.
Rank ManufacturingProducts 2008 2009 2010 2011
Trend
2010-2011
Share
in 2011
1 Metal, machinery and automotive 39,924,821 31,683,822 43,218,635 52,471,706 21.4% 41.6%
2 Electronics 13,447,759 10,496,709 14,176,235 16,116,570 13.7% 12.8%
3 Basic chemical 10,554,556 8,095,116 11,431,492 15,413,280 34.8% 12.2%
4 Food and beverage 3,089,897 2,810,632 4,514,181 6,851,931 51.8% 5.4%
5 Textile 3,902,167 3,396,923 5,031,224 6,735,213 33.9% 5.3%
6 Electrical equipment 2,460,487 2,105,815 3,142,834 3,769,056 19.9% 3.0%
7 Pulp and paper 2,518,492 1,883,208 2,731,780 3,262,648 19.4% 2.6%
8 Fertilizer 2,548,704 929,141 1,509,190 2,706,978 79.4% 2.1%
9 Other chemical products 1,917,008 1,661,883 2,199,293 2,592,293 17.9% 2.1%
10 Forage 1,741,635 1,679,129 1,871,564 2,220,457 18.6% 1.8%
Total (10Commodities) 82,105,526 64,742,378 89,826,428 112,140,132 24.8% 88.9%
Total (All Commodities) 91,802,724 72,398,088 101,115,407 126,099,550 24.7% 100.0%
The Investment Coordinating Board of the Republic of Indonesia
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0
100,000
200,000
300,000
400,000
500,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(S1)
World to World
World to ASEAN
World Investment
Trendof WorldInvestment
WorldInvestment
20032013(S1)
(USDMillion)
Excl. Financial sectors
327,163
239,709
192,451
184,482
168,947
Coal, Oil and Natural Gas
Metals
Real Estate
Alternative/Renewable energy
Communications
36,919
26,877
14,872
13,486
13,261
Metals
Coal, Oil and Natural Gas
Real Estate
Transportation
Chemicals
Top-5 Sectors of Investment to the World
2010 2013 (S1)
(USDMillion) Excl. Financial sectors
Top-5 Sectors of Investment to ASEAN
2010 2013 (S1)
(USDMillion) Excl. Financial sectors
Source:fDi Intelligence,fromthe
Financial TimesLtd2013.
The Investment Coordinating Board of the Republic of Indonesia
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World Investment
DestinationofWorldInvestment
By Region,
Based on Capital Expenditure
2010 2013(S1)
Excl. Financial sectors
Asia Pacific includes ASEAN which covered 9.4%
of the world investment.
Source:fDi Intelligence,fromthe
Financial TimesLtd2013.
10.5%
8.2%
5.5%
5.1%
4.1%
3.1%
2.8%
2.4%
2.3%
2.2%
China
United States
Brazil
India
UK
Russia
Australia
Indonesia
Mexico
Canada
33.3%
16.0%
12.4%
11.6%
10.5%
9.7%
6.6%
Asia-Pacific
Latin America & Caribbean
Western Europe
Rest of Europe
North America
Africa
Middle East
By Top-10 Countries,
Based on Capital Expenditure
2010 2013(S1)
Excl. Financial sectors
The Investment Coordinating Board of the Republic of Indonesia
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Total investment (Gross Fixed Capital Formation) required to achieve the target of economic growth of
above 6%annually for 2010-2014 periods is USD 1.25 trillion (IDR 12,460 trillion). This investment will
create new jobs to decrease the unemployment rate to 5-6 %as well as to decrease the poverty level to 8%.
Projection
2010 2011 2012 2013 2014
Economic growth (%) 5.5-5.6 6.0-6.3 6.4-6.9 6.7-7.4 7.0-7.7
Investment growth (%) 7.2-7.3 7.9-10.9 8.4-11.5 10.2-12.0 11.7-12.1
Investment required
(IDR Trillion)
1,894.1 2,111.1 2,144.5 2,348.8 -2,465.0 2,619.9 -2,788.4 2,939.2 -3,168.0
Government
(IDR Trillion and %from total
investment required)
220.0
(11,6%)
272.9 - 274.5
(12,8-12,9%)
329.9 - 336.6
(13,7-14%)
417.8 - 433.1
(15,5-15,9%)
525.6 - 552.5
(17,4-17,9%)
Private sectors
(IDR Trillion and %from total
investment required)
1,674.1
(88.4%)
1,838.2 -1,870.0
(87.1-87.2%)
2,019.0 -2,128.4
(86.0-86.3%)
2,202.1 -2,355.3
(84.1-84.5%)
2,413.6 -2,615.5
(82.1-82.6%)
Source: RPJMN 2010-2014
Notes:
Total investment required: IDR12,460 Trillion
Government contribution: IDR 1,816.7 Trillion (14,6%)
Private contribution: IDR10,643.3 Trillion (85,4%)
Private investment consists of large-scale FDI/DDI, investment in oil and gas, and mining sector, financial service investment, and
SME and cooperative investment
Indonesia Investment Plan
National Medium Term Development Plan (RPJMN)2010-2014
The Investment Coordinating Board of the Republic of Indonesia
8
1-2 years
5 years
10-15 years
Indonesia Investment Plan
Roadmap of Indonesia Investment
Quick wins and
low hanging
fruits
Encouraging and
facilitating ready-
to-invest
investors
Knowledge-Based
Economy
Developing economy
by innovation and
high-technology
Development of
Big-Scale Industry
Developing big-scale
industrials through
industry cluster (e.g.
Petrochemical,
transportation means,
and national defense)
Acceleration of
Infrastructure
Development
Developing soft
infrastucture
(education and
health facilities) and
hard infrastructure
(bridge, port,
etc) through Private-
Public Partnership
Scheme
More than 15 years
Source: BKPM
The Investment Coordinating Board of the Republic of Indonesia
9
21.4
22.5
21.9
22.5
23.7
23.4
23.9
24.4
25.2
5.0
5.7
5.5 6.3 6.1
4.5
6.1
6.5 6.2
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009 2010 2011* 2012**
Private Consumption Expenditure
Government Expenditure
Investment
Export
Import
GDP Growth
Indonesia Investment Performance
Distribution of GDP and GDP Growth
at 2000 Constant Market Prices by Expenditure 2004-2012 (Percent)
Source:Indonesia Statistics
Agency, 2013
*) Preliminary figure
**) Very preliminary figure
The Investment Coordinating Board of the Republic of Indonesia
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Total investment realizationin2012wasUSD34.8
billionor 10.5%abovethe2012target (USD31.5
billion),a24.6%increasefrom2011(USD27.9
billion).
Indonesia Investment Performance
Overall InvestmentRealizationtoIndonesia20062013(S1)
Source:BKPM
(USDBillion)
Excl. oil, gas, and financial sectors.
Total investment realizationinthe 1st semester 2013
wasUSD20.7billion or 49.4%of 2013target
(USD42.0billion). It isa29.4%increasefrom
the 1st semester 2012(USD16.0 billion).
2012Comparedto2011 2013(S1)Comparedto2012(S1)
2.3
3.9
2.3
4.2
6.8
8.4
10.2
6.5
6
10.3
14.9 10.8
16.6
19.5
24.6
14.2
2006 2007 2008 2009 2010 2011 2012 2013 (S1)
DDI FDI
8.3
14.2
17.1
15.0
23.4
27.9
34.8
20.7
The Investment Coordinating Board of the Republic of Indonesia
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Indonesia Investment Performance
Foreign Direct Investment toIndonesia
Based on Origin Country 2010-2013(S1)
(USDmillion)
Excl. oil,gasandfinancial sectors
Source: BKPM
Total(77countries) USD74.5 billion
FDI toIndonesia
Based on Origin Country
January - June 2013
(USDmillion)
Excl. oil,gasandfinancial sectors
2,306
1,980
1,353
1,229
657
598
453
378
276
235
Japan
Singapore
US
South Korea
UK
Netherlands
Mauritius
Malaysia
Brazil
Hong Kong
17,525
6,992
5,010
4,726
3,528
3,223
2,286
1,998
1,608
1,245
Singapore
Japan
US
South Korea
Netherland
British Virgin Islands
UK
Malaysia
Mauritius
Hong Kong
Total(65 countries) USD14.2billion
The Investment Coordinating Board of the Republic of Indonesia
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No. Country
2010 2011 2012 2013(S1) 2010-2013(S1)
Project Capex Project Capex Project Capex Project Capex Project Capex
1 Singapore 418 5,565 559 5,123 805 4,856 674 1,980 2,456 17,525
2 Japan 321 713 350 1,516 405 2,457 379 2,306 1,455 6,992
3 US 100 931 103 1,488 97 1,238 94 1,353 394 5,010
4 South Korea 355 329 382 1,219 421 1,950 340 1,229 1,498 4,726
5 Netherlands 106 608 97 1,354 131 967 102 598 436 3,528
6 British Virgin Islands 99 1,616 121 517 168 856 124 234 512 3,223
7 UK 132 276 126 419 97 934 107 657 462 2,286
8 Malaysia 198 472 227 618 237 530 241 378 903 1,998
9 Mauritius 20 23 18 73 23 1,059 25 453 86 1,608
10 Hong Kong, PRC 62 566 90 135 105 310 84 235 341 1,245
Total (Top-10 Countries) 1,811 11,099 2,073 12,462 2,489 15,156 2,170 9,423 8,543 48,140
Total (77 Countries) 3,077 16,215 3,661 19,475 4,579 24,565 3,994 14,221 15,311 74,475
Indonesia Investment Performance
FDI Realization toIndonesiaby Origin Country 20102013(S1)
(Based on Capital Expenditure, USDmillion)
Excl.oil, gasandfinancial sectors
Source: BKPM
The Investment Coordinating Board of the Republic of Indonesia
13
18%
13%
13%
12%
7%
37%
Mining (Excl. Oil and gas)
Transportation, storage and telecommunication
Chemical and pharmaceutical industry
Metal, machinery and electronic industry
Food Industry
Others
17%
17%
9%
9%
7%
41%
Mining (Excl. Oil and gas)
Transportation, storage and telecommunication
Chemical and pharmaceutical industry
Metal, machinery and electronic industry
Electricity, gas and water supply
Others
Indonesia Investment Performance
FDI toIndonesiaBasedonSectors
Excl.oil,gasandfinancial sectors
Source:BKPM
January June 2013
(USDmillion)
TotalUSD14.2billion
2,618
1,872
1,773
1,726
948
5,284
12.694
12.491
6.804
6.541
5.496
30.449
2010 2013 (S1)
(USDmillion)
TotalUSD74.5billion
The Investment Coordinating Board of the Republic of Indonesia
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No. Sector
2010 2011 2012 2013(S1) 2010-2013(S1)
Project Capex Project Capex Project Capex Project Capex Project Capex
1 Mining(excl. oil and gas) 228 2,201 320 3,619 412 4,255 311 2,618 1,271 12,694
2
Transport, storage and
telecommunication
87 5,072 70 3,799 93 2,808 84 812 334 12,491
3
Chemical and pharmaceutical
industry
159 793 179 1,467 230 2,770 169 1,773 737 6,804
4
Metal, machinery and
electronic industry
269 590 301 1,773 364 2,453 264 1,726 1,198 6,541
5 Electricity, gas and water supply 42 1,429 53 1,865 65 1,515 69 688 229 5,496
Total (5 Sectors) 785 10,084 923 12,523 1,164 13,801 897 7,618 3,769 44,026
Total (All sectors) 3,077 16,215 3,661 19,475 4,579 24,565 3,994 14,221 15,311 74,475
Indonesia Investment Performance
FDI Realization toIndonesiaby Sector 20102013(S1)
(Based on Total Capital Expenditure 2010-2013(S1), USDmillion)
Excl.oil, gasandfinancial sectors
Source: BKPM
The Investment Coordinating Board of the Republic of Indonesia
15
21%
17%
10%
10%
9%
33%
West Java
Banten
Jakarta
East Java
Papua
Others
22%
17%
12% 9%
6%
34%
Jakarta
West Java
Banten
East Java
East Kalimantan
Others
Indonesia Investment Performance
FDI toIndonesiaBasedonLocation
Excl.oil, gasandfinancial sectors
2010 2013 (S1)
(USDmillion)
TotalUSD74.5billion
16,799
12,735
8,805
6,798
4,332
25,005
January June 2013
(USDmillion)
TotalUSD14.2 billion
2,993
2,373
1,438
1,418
1,347
4,652
INDONESIA
The Investment Coordinating Board of the Republic of Indonesia
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No. Location
2010 2011 2012 2013(S1) 2010-2013(S1)
Project Capex Project Capex Project Capex Project Capex Project Capex
1 Jakarta 885 6,429 998 4,824 1,148 4,108 1,376 1,438 4,407 16,799
2 West Java 595 1,692 669 3,839 682 4,211 550 2,993 2,496 12,735
3 Banten 280 1,544 300 2,172 405 2,716 245 2,373 1,230 8,805
4 East Java 110 1,769 176 1,312 403 2,299 300 1,418 989 6,798
5 East Kalimantan 98 1,092 122 602 167 2,014 148 624 535 4,332
Total (Top-5Locations) 1,968 12,527 2,265 12,750 2,805 15,348 2,619 8,846 9,657 49,470
Total(33 Locations) 3,077 16,215 3,661 19,475 4,579 24,565 3,994 14,221 15,311 74,475
Source: BKPM
Indonesia Investment Performance
FDI Realization toIndonesiaby Location 20102013(S1)
(Based on Total Capital Expenditure 2010-2013(S1), USDmillion)
Excl.oil, gasandfinancial sectors
The Investment Coordinating Board of the Republic of Indonesia
17
Remarkable Indonesia
The Worlds 3
rd
Largest
Democratic and
Decentralized Nation
251 million of
populationin 2013
The Worlds Biggest
Archipelagic Nation
17,508islands
81,000kmCoastal Line
1.9 million sq km Land Area
3.1 million sq km Sea Area
3time zones
G-20
Member State
USD1 trillionof
GDP (PPP) in 2012
USD 4,540 of GDP per
Capita (PPP)
One of Asia Pacifics most
vibrant democracies
that has maintained
political stability
(The World Bank, 2013)
The Worlds Most
Stable Economy in
the Last Five Years.
(The Economist, 2012)
The Investment Coordinating Board of the Republic of Indonesia
18
Why Indonesia
Huge Population and Demographic Bonus: Big Market and Workforce
In 2013, Indonesia ranks the 4
th
most populous country
in the world.
Source: Central Intelligence Agency US, 2013 (Estimation)
Indonesias population covers more than 39%of
total population of 10Southeast Asian countries.
Source: ASEAN Community in Figures 2011
1,350
1,221
317 251 201
China India US Indonesia Brazil
Worlds Top-5 Population by Country
(million people)
In the periodof 2020-2030, the
dependency index will
reach its lowest point.
More than 60% of the
population is in the working
age, providing a dynamic
workforcewhich is one of the
highest in the region.
Source: Coordinating Ministry For Economic
Affairs RI, 2011
Indonesias Demography
The Investment Coordinating Board of the Republic of Indonesia
19
45
81
93
134
170
1999 2003 2009 2010 2015
Number of Indonesias Population in Middle Income
per capita expenditure per day USD 2-20
(million people)
In 2010, 56.5%of the total population is in the middle income
class, growing from 37.7%in 2003. This figure is projected to
increase to be 70%in 2015.
Sources: Bank Indonesia and Indonesia Statistics Agency, 2012 (Projection)
Note: Per capita expenditure per day is adjusted to the2005 purchasing power parity terms.
Source: SUSENAS and World Bank staff calculations.
Indonesias Proportion of the Population
based on per capita expenditure per day
5.5% 18.0%
Why Indonesia
Growing Middle Class: Higher Demands for Better Services and Products
18%population in
2010 is equal to
40 million people
or more than the total
population of
Malaysia and
Singapore combined.
The Investment Coordinating Board of the Republic of Indonesia
20
Why Indonesia
Proximity to Markets: In the Heart of the Worlds Economic Growth
Asia and World Population
Source: Coordinating Ministry For Economic Affairs RI, 2011
Global Economic Growth
for Each Decades
(Average percent per year)
Source: World Bank, 2011
The Investment Coordinating Board of the Republic of Indonesia
21
0.0 2.0 4.0 6.0 8.0 10.0
Brazil
Korea
Mexico
Turkey
Russia
Argentina
Saudi Arabia
Indonesia
India
China
2017
2013
2012
Why Indonesia
The Second Fastest Growing Economy among G20 Countries in 2012
Nominal GDP Growth Projection by IMF
The IMF projects Indonesia will be at
the top 3 fastest economic
growths among G20 countries.
International Monetary Fund;
World Economic Outlook Database,
April 2012.
China
7.8 %
India
5.5 %
Indonesia
6.2 %
Indonesias 2012 growth hits 6.2%
The Financial Times, 5 February 2013
The Investment Coordinating Board of the Republic of Indonesia
22
Why Indonesia
Abundant Natural Resources: The Key Indicators
Indonesia is one of the worlds major producer
of a broad range of commodities.
Source: Coordinating Ministry For Economic Affairs RI, 2011
The Investment Coordinating Board of the Republic of Indonesia
23
McKinsey Global Institute
September 2012
Investment Opportunity
Indonesia Today and Indonesia in 2030
The Investment Coordinating Board of the Republic of Indonesia
24
Investment Opportunity
Abundant Opportunity Growing Consuming Class Living in Cities
The new wave of consuming class in Indonesia is huge opportunity. The population in cities will
grow from 53%in 2011 to 71%in 2030, producing 86%of GDP.
With an additional 90 million consumers expected in Indonesia, consumer spend in urban areas
could increase at 7.7%a year to become a USD 1.1 trillion business opportunity by 2030.
Urban Households Expenditure
in 2011 and 2030
The Investment Coordinating Board of the Republic of Indonesia
25
Simplifying business start up and licensing procedures, including the
one-stop shop (PTSP) licensing provision at BKPM, 60%reduction
of application forms (from 38 to 15 forms).
Establishing anInvestor Relation Unit at BKPM for information, facilitation
and inqueries handling from existing and potential investors.
Rolling-out the Electronic Information Services and Investment Licensing
(SPIPISE) in 105 regions (PTSP) throughoutIndonesia.
Helping contain various obstacles and giving consultationon problems
investors face in the conduct of investments.
Facilitating foreign workers permit.
Launching theinvestment tracking system.
Investment Policy and Facility
BKPM The Indonesia Investment Coordinating Board
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invest in
2013 byIndonesian Investment Coordinating Board. All rights reserved
Indonesia Investment Promotion Centre (IIPC)
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