Like other countries, Indonesia still has its hits and misses, but there’s no doubt 2017 was a robust year for the country. As Cekindo welcomes another year, we will also look back on some of the biggest achievements of the country last year.
Indonesia continues to soar as far as the ease of doing business is concerned. In the latest report from World Bank Group, it is now ranked 72nd after landing 91st place in 2017. A year before that, the country placed 106th. The group highlighted the successes of the government in resolving insolvency, enforcing contracts, and improving the process of securing electricity.
Tax reforms are nothing short of controversial in Indonesia with a lot of crackdowns and stringent policies. So far, the country missed meeting its targeted revenue, but it realised about 91 percent. It aims to continue with a higher tax revenue goal in 2018 at Rp1 1.4 quadrillion (almost $100 billion).
However, its tax amnesty program, especially for those operating offshore companies, has been regarded as widely successful. The government has already collected at least $330 billion from it.
When it comes to its gross domestic product (GDP), the percentage at 5.2 percent was slightly higher than its forecast. The World Bank Group predicts it to reach 5.3 percent this year, thanks to its strong domestic fiscal and economic policies.
The FDIs grew $7.3 billion during the first three months of 2017, which was significantly higher than that in 2016 at $6.9 billion. But it’s slightly lower than the total investments in the fourth quarter of 2016, which was $7.5 billion. It then jumped to a whopping 10.6 percent between April and June. The top three biggest foreign investors in 2017 were Singapore, Japan, and China. BKPM, meanwhile, revealed the three industries that had the highest foreign investments. These are electricity, gas, and water supply; mining, and metal, machinery, and electric, which had the biggest inflow.
Indonesia also remains one of the best Asian countries for foreign investments.
Indonesian consumers are on a high as well. Based on the recent Gallup survey, the country placed number one in terms of overall optimism. Indonesia scored high in hope, economic prosperity, and happiness. This is positive news considering, in general, the world is more pessimistic than the previous year.
The country also has a growing middle class, which is now the world’s fourth largest. At least 19 million households belong to this group in 2016, according to Euromonitor International. It will also continue to rise until 2030. The firm predicts that one of the fastest-growing industries among this population is communications while growth will spread in other provinces.
The poverty rate in Indonesia has also declined. In September 2017, it went down to 26.58 million, a decrease of almost 2 million people in the early months of the year. The gap between the rich and the more also starts to disappear.
Bank Indonesia’s consumer survey further revealed better consumer confidence. Its index now scored 126.4 as of December 2017, over 3 points higher than in November.
The banks in Indonesia are confident about having a fruitful year. Bank Rakyat Indonesia (BRI), one of the popular local banks that provide microfinancing, reported an increase of almost 8.5 percent increase net profit during the third quarter of 2017 compared to the same period in 2016.
Credit loans also went up by around 8 percent before the year closed, with most of it meant for infrastructure.
The Indonesian Cement Association (ASI) revealed that the domestic sales for cement when up by almost 8 percent from 2016 to 2017. The revenue grew in almost every region. But the biggest consumer remains to be Java, which used 57 percent of the total cement sold. It, therefore, implies much of the development is still within the urban areas such as Jakarta, Bandung, Surabaya, and Yogyakarta.
Transparency and delays remain to be the biggest problems in terms of improving the country’s infrastructure. Fortunately, some huge projects are already underway. These include Jasa Marga, a toll road that will span more than 200 kilometres.
There may be pitfalls, but Indonesia remains to be a growing tiger economy in the world. It’s one of the largest in Asia and a country poised to lead the emerging markets sector. Its industries are diverse, it is rich in natural resources, and it has a huge young population and a large consumer base capable of spending.
If you need to know more about investing in the country or like some help in setting up a company, email Cekindo at firstname.lastname@example.org.