Bkpm Ti Forum 2013

INDONESIA INVESTMENT COORDINATING BOARD

Trade to Invest in Remarkable IndonesiaEnhancing Export and Domestic Market through Investment

invest in

2013 by Indonesian Investment Coordinating Board. All rights reserved

Mahendra SiregarChairman

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 2012Trend (%) 2008-2012

Jan-Jul Change (%) 2013/20122012 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


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Trade

Indonesias Exports, By Top-10 Products in 2011 (USD Million)

Source: Ministry of Industry RI and Statistics Agency, 2013.

Rank Manufacturing Products 2008 2009 2010 2011Trend

2010-2011Share

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 (10 Commodities) 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%


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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 Manufacturing Products 2008 2009 2010 2011Trend

2010-2011Share

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 (10 Commodities) 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%


5

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 WorldWorld to ASEAN

World Investment

Trend of World Investment

World Investment20032013 (S1)(USD Million)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 World2010 2013 (S1)(USD Million) Excl. Financial sectors

Top-5 Sectors of Investment to ASEAN2010 2013 (S1)(USD Million) Excl. Financial sectors

Source: fDi Intelligence, from theFinancial Times Ltd 2013.


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World Investment

Destination of World Investment

By Region, Based on Capital Expenditure2010 2013 (S1)Excl. Financial sectors

Asia Pacific includes ASEAN which covered 9.4% of the world investment.

Source: fDi Intelligence, from theFinancial Times Ltd 2013.

10.5%

8.2%

5.5%

5.1%

4.1%

3.1%

2.8%

2.4%2.3%

2.2%

ChinaUnited States

BrazilIndia

UKRussia

AustraliaIndonesia

MexicoCanada

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


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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: IDR 12,460 Trillion Government contribution: IDR 1,816.7 Trillion (14,6%) Private contribution: IDR 10,643.3 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


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1-2 years

5 years

10-15 years

Indonesia Investment Plan

Roadmap of Indonesia Investment

Quick wins and low hanging fruitsEncouraging and facilitating ready-to-invest investors

Knowledge-Based EconomyDeveloping economy by innovation and high-technology

Development of Big-Scale IndustryDeveloping big-scale industrials through industry cluster (e.g. Petrochemical, transportation means, and national defense)

Acceleration of Infrastructure DevelopmentDeveloping soft infrastucture (education and health facilities) and hard infrastructure (bridge, port, etc) through Private-Public Partnership Scheme

More than 15 years

Source: BKPM


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21.4 22.5 21.9 22.5 23.7 23.423.9 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


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Total investment realization in 2012 was USD 34.8billion or 10.5% above the 2012 target (USD 31.5billion), a 24.6% increase from 2011 (USD 27.9billion).


Overall Investment Realization to Indonesia 20062013 (S1)

Source:BKPM

(USDBillion)Excl. oil, gas, and financial sectors.

Total investment realization in the 1st semester 2013

was USD 20.7 billion or 49.4% of 2013 target(USD 42.0 billion). It is a 29.4% increase fromthe 1st semester 2012 (USD 16.0 billion).

2012 Compared to 2011 2013 (S1) Compared to 2012 (S1)

2.3 3.9 2.3 4.26.8 8.4

10.26.5

6

10.3 14.9 10.8

16.619.5

24.6

14.2

2006 2007 2008 2009 2010 2011 2012 2013 (S1)

DDI FDI

8.3

14.217.1

15.0

23.4

27.9

34.8

20.7


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Foreign Direct Investment to IndonesiaBased on Origin Country 2010-2013 (S1)(USD million)Excl. oil, gas and financial sectors

Source: BKPM

Total (77 countries) USD 74.5 billion

FDI to Indonesia Based on Origin Country

January - June 2013(USD million)

Excl. oil, gas and financial 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) USD 14.2 billion


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No. Country2010 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


FDI Realization to Indonesia by Origin Country 20102013 (S1)(Based on Capital Expenditure, USD million)Excl. oil, gas and financial sectors

Source: BKPM


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


FDI to Indonesia Based on SectorsExcl. oil,gas and financial sectors

Source:BKPM

January June 2013(USD million)

Total USD 14.2 billion

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)(USD million)



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No. Sector2010 2011 2012 2013(S1) 2010-2013(S1)


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


FDI Realization to Indonesia by Sector 20102013(S1)(Based on Total Capital Expenditure 2010-2013(S1), USD million) Excl. oil, gas and financial sectors

Source: BKPM


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


FDI to Indonesia Based on LocationExcl. oil, gas and financial sectors

2010 2013 (S1)(USD million)


16,799

12,735

8,805

6,798

4,332

25,005

January June 2013(USD million)


2,993

2,373

1,438

1,418

1,347

4,652

INDONESIA


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No. Location2010 2011 2012 2013(S1) 2010-2013(S1)


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-5 Locations) 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


FDI Realization to Indonesia by Location 20102013(S1)(Based on Total Capital Expenditure 2010-2013(S1), USD million) Excl. oil, gas and financial sectors


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Remarkable Indonesia

The Worlds 3rd Largest Democratic and

Decentralized Nation

251 million of population in 2013

The Worlds BiggestArchipelagic Nation

17,508islands81,000 km Coastal Line

1.9 million sq km Land Area3.1 million sq km Sea Area

3 time zones

G-20Member State

USD1 trillion of 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)


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Why Indonesia

Huge Population and Demographic Bonus: Big Market and Workforce

In 2013, Indonesia ranks the 4th most populous countryin the world.Source: Central Intelligence Agency US, 2013 (Estimation)

Indonesias population covers more than 39% of total population of 10 Southeast 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 period of 2020-2030, the

dependency index will reach its lowest point.

More than 60% of the population is in the working age, providing a dynamic workforce which is one of the highest in the region.

Source: Coordinating Ministry For Economic Affairs RI, 2011

Indonesias Demography


19

4581 93

134170

1999 2003 2009 2010 2015

Number of Indonesias Population in Middle Incomeper 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.


20

Why Indonesia

Proximity to Markets: In the Heart of the Worlds Economic Growth

Asia and World Population


Global Economic Growth for Each Decades(Average percent per year)

Source: World Bank, 2011


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.

China7.8 %

India5.5 %

Indonesia6.2 %

Indonesias 2012 growth hits 6.2%The Financial Times, 5 February 2013


22

Why Indonesia

Abundant Natural Resources: The Key Indicators

Indonesia is one of the worlds major producer of a broad range of commodities.



23

McKinsey Global InstituteSeptember 2012

Investment Opportunity

Indonesia Today and Indonesia in 2030


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 Expenditurein 2011 and 2030


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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 an Investor 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) throughout Indonesia.

Helping contain various obstacles and giving consultation on problems investors face in the conduct of investments.

Facilitating foreign workers permit.

Launching the investment tracking system.

Investment Policy and Facility

BKPM The Indonesia Investment Coordinating Board

Our services for investors

www.bkpm.go.id

THANK YOU | TERIMA KASIH

invest in

2013 by Indones ian Investment Coordinating Board. All rights reserved

Indonesia Investment Promotion Centre (IIPC)www.bkpm.go.id

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Badan Koordinasi Penanaman Modal Badan Koordinasi Penanaman Modal ((BKPMBKPM))Indonesia Investment Coordinating BoardJalan Jenderal Gatot Subroto No. 44, Jakarta 12190P.O. Box 3186, Indonesiat : +62 21 5292 1334 |f : +62 21 5264 211 |e : [email protected]

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Bkpm Ti Forum 2013