Indonesia...cited sluggish global economic growth, low commodity prices, and lower-than-expected GDP growth in 2016 Q1 for the downward revision. Still, forecasts remain buoyant overall

Indonesia

Executive Summary

Economy The rise of Southeast Asia’s largest economy in recent decades has been nothing short of spectacular. While the

Indonesian economy was severely impacted by the Asian financial crisis in the late 1990s, the economy has

rebounded strongly since, with the country today considered to be a newly industrialised country (NIC). From an

average economic growth of 4.6% per annum (p.a.) over the period 2000-2004, growth surged to an average of

6% p.a. over the period 2005-2011, underpinned by a strong recovery in global commodity prices. While somewhat

slower in recent years due mainly to economic headwinds and challenges emanating from global exogenous

economic conditions, growth has remained strong overall, at a still-robust 5.02% in 2014 and 4.79% in 2015.

Forecasts remain buoyant for 2016, with the International Monetary Fund (IMF) projecting economic growth at

4.94% in 2016; while the Asian development Bank (ADB) sees this at 5% in 2016. The economy is poised to grow

at a healthy pace going forward, with economic growth forecasts ranging from 5.5% - 5.7% in 2017. Beyond this,

growth in Southeast Asia’s largest economy is expected to remain robust over the medium to long-term, with

Business Monitor International (BMI) forecasting real GDP growth to average 6.1% over the next decade, driven

largely by domestic demand.

Trade

China was the leading import market into Indonesia in 2015, valued at USD29bn. Singapore and Japan were

ranked second and third valued at USD18bn and USD13bn respectively. South Africa exported goods to the value

of ZAR2.8bn in 2015 while imported goods were valued at ZAR8.9bn. South Africa has maintained a trade deficit

with Indonesia, with imports exceeding exports over the period 2006 to 2016. The leading export product to

Indonesia from South Africa in 2015, was chemical wood pulp, dissolving grades valued at ZAR1.4bn, followed by

iron ores (ZAR309m).

The Western Cape exported goods to the value of ZAR143m in 2015 while imported goods were valued at

ZAR1.1bn. The leading export product to Indonesia from the Western Cape was fresh apples, pears and quinces

valued at ZAR45m, followed by machinery for the industrial preparation or manufacture of food or drink (ZAR27m).

The fastest growing export products were grapes (62%), citrus fruit (56%) and insecticides, rodenticides, fungicides

(40%). Indonesia has an appetite for Western Cape’s agriculture, forestry and fishing sector (accounting for 41%),

followed by metals, metal products, machinery and equipment (26%) and petroleum products, chemicals, rubber

and plastic (12%).

Investment

Between January 2003 and December 2015 a total of 126 FDI projects were recorded from Indonesia. These

projects represent a total capital investment of ZAR204.44bn. Financial services and coal, oil and natural gas both

received the largest FDI from Indonesia by projects accounting for 13% and 8% respectively.

Between 2003 and 2015 there were 3 FDI projects from South Africa’s to Indonesia valued at ZAR178m, creating

a total of 56 jobs.

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Table of Contents

1. General Information ................................................................................................................... 3

2. Economic Overview ................................................................................................................... 3

2.1 Doing Business in Indonesia .............................................................................................. 6

2.2 Indonesia’s Sovereign Credit Ratings ............................................................................... 7

3. Trade .............................................................................................................................................. 9

3.1 Indonesia Trade in Services ............................................................................................... 9

3.2 Indonesia Global Trade ..................................................................................................... 10

3.3 Trade with South Africa ..................................................................................................... 12

3.4 Western Cape Trade with Indonesia ............................................................................... 14

3.5 Tariffs ................................................................................................................................... 15

3.6 Trade Regulations Markings and Standards .................................................................. 16

4. Investment ................................................................................................................................. 18

4.1 Global Investment into Indonesia .................................................................................... 18

4.2 Global Investment from Indonesia ................................................................................... 21

4.3 Investment Relations between South Africa and Indonesia ........................................ 24

5. Tourism ....................................................................................................................................... 25

5.1 Indonesia Trends and Travel Patterns ............................................................................ 25

5.2 Indonesia Tourist Arrivals into South Africa ................................................................... 25

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1. General Information

Indonesia, a nation situated in Southeast Asia is an archipelago made up of volcanic islands spread between Asia

and Australia. It is comprised of more than 17,500 islands, of which 6,000 are inhabited, and is the world’s largest

country comprised solely of islands. It is highly diverse ethnically, with more than 700 languages spoken. The

archipelago has international land boundaries with three sovereign states, namely Timor-Leste (253 km), Malaysia

(1,881 km), and Papua New Guinea (824 km), and has a coastline of 54,716 km. With an area of approximately

1.9 million km² - of which 1.8 million km² is comprised of land, with the balance of 93 thousand km² being water -

Indonesia is the15th largest country in world by land area. It is divided into 31 provinces; one autonomous province

(Aceh), one special region (Yogyakarta) and one national capital district (Jakarta Raya).

Indonesia is the fourth most populous state in the world, with the population estimated at 258, 316,051 in July 2016.

The country is ruled by a Government coalition. The last legislative and presidential elections took place in 2014

and are next scheduled to take place concurrently in 2019. Indonesia is a member of numerous formal and informal

multilateral organisations, including the Association of Southeast Asian Nations (ASEAN), the Non-Aligned

Movement, the Organisation of Islamic Cooperation, Asia-Pacific Economic Cooperation (APEC), the G-20 major

economies, and the Consultative Group on Indonesia (CGI).

GENERAL INFORMATION

Capital City Jakarta

Government Type Presidential Republic

Chief of State President Joko Widodo

Head of

Government President Joko Widodo

Population 258,316,051 (July 2016 estimate)

Life Expectancy 72.7 years

Literacy 93.9% (2015 estimate)

Ethnic Groups

Javanese (40.1%), Sundanese (15.5%), Malay (3.7%), Batak

(3.6%), Madurese (3%), Betawi (2.9%), Minangkabau (2.7%),

Buginese (2.7%), Bantanese (25), Banjarese (1.7%), Balinese

(1.7%), Achnese (1.4%), Dayak (1.4%), Sasak (1.3%), Chinese

(1.2%), and other (15%)

Religions Muslim (87.2%), Christian (7%), Roman Catholic (2.9%), Hindu

(1.7%), and other (0.9%) (Includes Buddhist and Confucian).

Languages

Bahasa Indonesia (official, modified form of Malay), English,

Dutch, local dialects of which the most widely spoken in

Javanese. (More than 700 languages are used in Indonesia).

HDI Value (2015

Report) 0.727 (Ranked 110/188)

Sources: CIA World Factbook, 2016; World Bank Data, 2016; United Nations Data 2016

2. Economic Overview

The rise of the Indonesian economy has been nothing short of spectacular. With the economy growing at an

average annual rate of 7% over the period 1965 – 1997, this enabled Indonesia to graduate from the rank of the

low-income-countries into the rank of the lower-middle-income countries (MICs), which the World Bank defines as

has having a per capita income of between $1,025 and $4,036. According to the International Monetary Fund’s

(IMF) latest World Economic Outlook (WEO) published on 04 October 2016, Indonesia’s gross domestic per capita

income was $3,362.36 in 2015. Further, with a gross domestic product (GDP) of $2.848trn (PPP), Indonesia was

the ninth largest country in the world by this measure in 2015.

While the economy was severely impacted by the Asian financial crisis in the late 1990s, which saw GDP falling

by 13.6% in 1998, and real economic growth recovering to just 0.3% in 1999, the economy has rebounded strongly

since, with the country considered today to be a newly industrialised country (NIC). From an average of 4.6% per

annum (p.a.) over the period 2000-2004, economic growth surged to an average of 6% p.a. over the period 2005-

2011, underpinned by a strong recovery in global commodity prices. While somewhat slower in recent years due

4

mainly to economic headwinds and challenges emanating from global exogenous economic conditions, economic

growth has remained strong overall, at a still-robust 5.02% in 2014 and 4.79% in 2015.

Source: IMF, 2016

Most recently, the Indonesian economy expanded by 5.18% y-o-y in the second quarter of 2016 (2016 Q2),

compared to a downwardly revised 4.92% y-o-y growth rate in 2016 Q1. This was the strongest growth rate

recorded since 2013 Q4, and was driven by an increase in private consumption and government spending.

Jakarta has announced a number of policy reforms since September 2015, with some sectors – including trade

and investment policy – witnessing a shift towards deregulation, which in turn is aimed at improving the country’s

investment climate. Together with prudent monetary policy and increased public investment in infrastructure, these

are helping buoy economic growth, which the World Bank projects at 5.1% in 2016. In turn, on 22 May 2016 the

Bank of Indonesia (the central bank) revised its projection for Indonesia’s economic growth in 2015 downward to

the range of 5.0% – 5.4% (y-o-y), slightly lower than its previous forecast of 5.2% - 5.4% y-o-y. The central bank

cited sluggish global economic growth, low commodity prices, and lower-than-expected GDP growth in 2016 Q1

for the downward revision. Still, forecasts remain buoyant overall and within a relatively narrow range, with the IMF

projecting economic growth at 4.94% in 2016; while the Asian development Bank (ADB) sees this at 5% in 2016.

Looking ahead, the economy is poised to grow at a healthy pace, with economic growth forecasts ranging from

5.5% - 5.7% in 2017. Beyond this, growth in Southeast Asia’s largest economy is expected to remain robust over

the medium to long-term, with Business Monitor International (BMI) forecasting real GDP growth to average 6.1%

over the next decade, driven largely by domestic demand. The global research house cautions however that

unlocking Indonesia’s full economic potential will require policy reform success – particularly in the areas of

bureaucratic efficiency, corruption and investment promotion – and that progress on this front could take place at

a slow-to-moderate pace.

ECONOMIC INFORMATION

GDP (PPP) (2015 est.) USD2.848trn

GDP growth (2015 est.) 4.79%

GDP per capita (PPP) (2015 est.) U$D11,148.54

Inflation (Avg. 2015) 5.9%

Inflation (y-o-y; September 2016) 3.07%

BI Rate (13 October 2016) 5%

Unemployment rate (May 2016) 5.5%

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ECONOMIC INFORMATION

Doing Business, 2016 Report (ranking out of 180) 109

Total Exports (2015) USD150.28bn

Total Imports (2015) USD142.69bn

Sources: CIA World Factbook; Doing Business Report 2016; World Bank International Labour Organisation, 2016

Economic Structure

In line with many of the so-called Asian Tigers – a term given to a number of economies in Asia which have

undergone rapid economic growth and which has usually been accompanied by an increase in the standard of

living – who, as their leadership embarked on processes of industrialisation and urbanisation have seen the

structure of their economies change dramatically, so has this been the case in Indonesia.

The gradual process of industrialisation and urbanisation, which began in the late 1960s and accelerated in the

1980s as falling oil prices saw the Indonesian government focus on diversifying from oil exports towards

manufactured exports, was a case in point. To this end, from 1967 to 2009, the manufacturing share of GDP

increased by 19 percentage points, while the agricultural share fell by 35 percentage points. Similarly, the share of

the population living in the urban areas increased from 17% to 53% over this period. Despite industrialising over

the past 50 years, agriculture remains an important part of the Indonesian economy.

The journey of economic modernisation has understandably led to a significant change in the structure of the

economy, with the manufacturing/industrial sector today the key driver of economic output. To this end, according

to the country’s official statistics office, Statistics Indonesia, the said sector accounted for 45% of economic output

in 2014, some 32 basis points higher than the 13% contributed in 1965. The services sector followed closely, with

a contribution of 41% to the country’s gross domestic product in 2014. Of interest is that the contributions made by

these two sectors to economic output over the past two decades has remained relatively stable, fluctuating in a

narrow band of between 41 and 47% of GDP over the period 1996 – 2014.

INDONESIA’S ECONOMIC STRUCTURE:SECTORAL CONTRIBUTION (%) 1965 vs. 1980 vs. 2010 vs. 2014

1965 1980 1996 2010 2014

Agriculture 51 24 16 15 14

Industry 13 42 43 47 45

Services 36 34 41 38 41

Sources: Statistics Indonesia, World Bank, CIA World Factbook

The most notable change lies in the contribution made by the agricultural sector. From 51% in 1965, in 2014 the

said sector contributed 14% towards economic output; a far cry from levels seen in the late 1960s. This stands to

reason given the changes seen in the country over the past thirty years and is directly ascribed to the transformation

of the economy from its largely agrarian dependence to the modern economy it is today.

In terms of the current structure of the economy (2014, the most recent official data available), as indicated in the

graph below the manufacturing industry, with its contribution of 24% towards GDP, accounted for the largest share

of economic output in 2014. The trade, hotels & restaurants category followed with a contribution of 15% of GDP,

while the agriculture, livestock, forestry & fishing placed third at 14%.

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Source: Statistics Indonesia, 2016

As the Indonesian economic landscape has transformed and grown into a modern day economy, so has the

presence and stature of a number of Indonesian companies on the global economic stage. Testimony to this is the

presence of a number of Indonesian companies on the Forbes 2000 List, a comprehensive annual ranking of the

world’s largest public listed companies.

TOP INDONESIAN COMPANIES ON FORBES 2000 LIST, 2016

GLOBAL RANK

COMPANY SECTOR SALES

(USDbn)

MARKET CAPITAL (MAY 2016)

(USDbn)

429 Bank Rakyat Indonesia Regional Banks 7.13 20.4

462 Bank Mandiri Regional Banks 7.51 17.6

620 Bank Central Asia Regional Banks 4.41 24.5

659 Telekom-Indonesia Telecommunications 7.84 27.4

1,063 Bank Negara Indonesia Regional Banks 3.63 6.9

1.387 Gudang Garam Tobacco 5.25 9.8

1,542 PGN Natural Gas Utilities 3.4 9.1

1,620 Semen Indonesia Construction Materials 2.35 8.7

1,898 Bank Danamon Indonesia Regional Banks 2.53 3.8

Source: Forbes 2000, 2016

2.1 Doing Business in Indonesia

The World Bank Group in its annual Doing Business 2016 report ranked Indonesia 109th out of 189 countries

monitored in terms of ease of doing business.

Indonesia’s relative strengths in terms of ease of doing business include getting electricity, with the country ranking

46th globally in this category, getting credit (70th), resolving insolvency (77th), and protecting minority investors

(88th).

Conversely, according to the report, the country fared less favourably in terms of starting a business with a ranking

of 173rd, enforcing contracts (170th), paying taxes (148th), and registering a property (131st). Indicators ranked by

the report are tabled below:

Agriculture, Livestock,

Forestry and Fishery

14% Mining and Quarrying

11%

Manufacturing Industry

24%Construction10%

Trade, Hotel & Restaurants

15%

Transport and Communication

7%

Finance, Real Estate and

Business Services8%

General Government

Services6%

Private Services5%

Indonesia GDP Sectoral Contribution, 2014

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INDONESIA’S RANKINGS - DOING BUSINESS, 2016 REPORT

INDICATORS 2016 RANKING

(OUT OF 189 COUNTRIES)\

Starting a Business 173

Dealing with Construction Permits 107

Getting Electricity 46

Registering Property 131

Getting Credit 70

Protecting Investors 88

Paying Taxes 148

Trading Across Borders 105

Enforcing Contracts 170

Resolving Insolvency 77

Doing Business 2016 109

Source: World Bank Group’s Doing Business, 2016 Report

2.2 Indonesia’s Sovereign Credit Ratings

“A sovereign credit rating is the credit rating of a country or sovereign entity. Sovereign credit ratings give investors

insight into the level of risk associated with investing in a particular country and also include political risks. At the

request of the country, a credit rating agency will evaluate the country’s economic and political environment to

determine a representative credit rating”.

Source: Investopedia

While a number of credit agencies exist, the three most recognised credit ratings agencies globally are Fitch

Ratings, Moody’s Investors Services and Standard & Poor’s (S&P). Reasons for a country/sovereign to seek a

credit rating from one of the these three agencies include not only to access funding in international bond markets

via the issuance of bonds in external debt markets, but it is a means to attract foreign direct investment. Obtaining

a good sovereign credit rating instils confidence in investors seeking to invest in that country, with the credit rating

a means for the country to demonstrate financial transparency and credit standing.

Two key rating ‘standards’ exist, with the highest possible rating category being “AAA” according to S&P, which

indicates that the rated country has extremely strong capacity to meet its financial commitments. A wide range of

rating categories exists below this, with the categories ranging all the way down to SD (i.e. defaulted), which means

the rated country has failed to pay one or more of its financial obligations when it came due.

While Indonesia has long been rated by the three main said credit agencies, only two of three agencies have

awarded the country investment grade status. To this end, Fitch Ratings and Moody’s Investors Services promoted

Indonesia’s credit rating to investment grade in 2011 and 2012, respectively. Standard & Poor’s (S&P) however

have been more cautious in their assessment, and have maintained the rating at BB+ with a positive outlook – one

notch below investment grade status; or said differently, the highest junk level rating, for a number of years.

Most recently, on 28 January 2016, Moody’s Investors Services affirmed the Government of Indonesia’s Baa3

sovereign credit rating, with a stable outlook. (Baa3 is the lowest notch within the investment grade category on

this rating scale). Fitch Ratings followed shortly thereafter, affirming the country’s sovereign credit rating at BBB-

with a stable outlook on 24 May 2016. (As with Moody’s, BBB- is the lowest notch within the investment grade

category on this particular rating scale).

Contrary to expectations, on 01 June 2016, S&P maintained Indonesia’s sovereign debt rating at BB+ with a

positive outlook. (BB+ is one notch below investment grade rating and is the highest rating in the junk rating

categories). In June 2015, S&P raised the outlook to positive, which raised expectations that the country could

possible in line for a rating upgrade to investment grade i.e. BBB- at its next annual review. While S&P left the door

open for a future rating upgrade at its June 2016 assessment as seen by the positive outlook, the agency noted

that the government will need to enhance its fiscal performance as well as improve the quality of the country’s

corporate credit, amongst other requirements.

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INDONESIA’S SOVEREIGN CREDIT RATINGS, 2016

CREDIT RATING AGENCY

STANDARD & POORS MOODY’S INVESTOR

SERVICES FITCH RATINGS

CREDIT RATING BB+ Baa3 BBB-

OUTLOOK Positive Stable Stable

DATE OF LAST CHANGE

01 June 2016 28 January 2016 24 May 2016

Sources: Standard & Poor’s; Moody’s Investors Services; & Fitch Ratings

A number of alternative measures and rating scales exist to assess risks posed to companies and banks,

particularly those pertaining to political and commercial risks when undertaking international commercial

transactions. One such company which offers these services is Belgium’s Delcredereducroire, the country’s official

export credit agency and public credit insurer.

The table below shows Delcredereducroire’s current risk assessment of China in terms of export transactions and

direct investments. Ratings are between 1 and 7, and between A and C, with 7 and C being the maximum risk

indicators.

In terms of political risk associated with exports transactions in China, these are deemed to be low both

in the short- and long-term.

Commercial risk in turn is considered to be mid-way between low and high levels of risk.

Regarding direct investment, with the exception of risk associated with expropriation and government

action, all other categories are considered to be relatively low as indicated by scores awarded below.

INDONESIA’S RISK ASSESSMENT - DELCREDEREDUCROIRE

EXPORT TRANSACTIONS (Scale 1 – 7)*

Political Risks

Short Term 3

Medium-Long term 3

Special Transactions 3

Commercial Risk B **

DIRECT INVESTMENTS

War risk 3

Risk of expropriation and government action 5

Transfer risk 3

* Where 1 is associated with the least risk and 7 the most.

** Where B is associated with mid risk; A is low risk and C is high risk.

Source: ONDD, 2016

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3. Trade

3.1 Indonesia Trade in Services Indonesia exports in services grew by 6% in 2015 to reach USD22bn. Over the period analysed Indonesia has

consistently maintained a negative trade balance with imports outperforming export services over the period

analysed.

Source: TradeMap, 2016

The table below shows Indonesia’s trade in services for 2015. Travel (defined as covering goods and services for

own use or to be given away, acquired from an economy, by non-residents during visits to that economy) was the

largest services export valued at USD10n followed by Other business services (includes merchant activity and

other trade-related services, operational leasing (rental), miscellaneous business, professional, and technical

services and other services) valued at USD5bn.

Transport was the largest import service into Indonesia’s valued at USD9.6bn followed by other business services

valued at USD7.5bn.

SERVICES EXPORTED BY INDONESIA, 2015 SERVICES IMPORTED BY INDONESIA, 2015

CODE SERVICE VALUE

2015 (USDm)

% GROWTH 2010-2015

CODE SERVICE VALUE

2015 (USDm)

% GROWTH 2010-2015

4 Travel 10 654.4 8.99% 3 Transport 9 600.6 3.79%

10 Other business services 4 806.5 4.87% 10 Other business services 7 462.2 7.11%

3 Transport 3 469.4 6.25% 4 Travel 7 299.2 2.91%

9 Telecommunications, computer, and information services

1 022.6 -1.71% 9 Telecommunications, computer, and information services

1 736.9 9.69%

12 Government goods and services n.i.e. 631.8 2.63% 8 Charges for the use of intellectual property n.i.e.

1 570.3 -0.14%

5 Construction 374.5 -0.53% 6 Insurance and pension services 942.1 -3.57%

1 Manufacturing services on physical inputs owned by others

355.6 - 7 Financial services 734.6 5.26%

7 Financial services 261.1 -3.23% 5 Construction 451.1 -1.66%

2 Maintenance and repair services n.i.e. 119.1 15.47% 2 Maintenance and repair services n.i.e.

358.8 29.43%

11 Personal, cultural, and recreational services

115.2 6.12% 12 Government goods and services n.i.e.

161.8 -13.41%

8 Charges for the use of intellectual property n.i.e.

54.3 0.25% 11 Personal, cultural, and recreational services

66.6 1.21%

6 Insurance and pension services 26.5 3.62% - - - -

TOTAL EXPORTS 21 890.9 6.06% TOTAL IMPORTS 30 384.2 3.29%


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exports (USDbn) 11.6 12.6 15.4 13.2 16.9 21.9 23.7 22.9 23.5 21.9

Imports (USDbn) 21.6 24.6 28.5 23.2 26.5 31.7 34.2 35.0 33.5 30.4

Trade balance (USDbn) - 10.0 - 12.0 - 13.1 - 9.9 - 9.6 - 9.8 - 10.6 - 12.1 - 10.0 - 8.5

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INDONESIA TRADE OF SERVICES, 2006-2015

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3.2 Indonesia Global Trade

Exports for Indonesia in 2015 were valued at USD150bn while global imports from Indonesia were valued at

USD143bn in 2015. Except for 2012 to 2014, Indonesia’s trade balance over the period has been consistently

positive.


Japan was the leading export market for Indonesia with a value of USD18bn. The United States and China rank

second and third valued at USD16bn and USD15bn respectively.


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exports (USDbn) 100.8 114.1 137.0 116.5 157.8 203.5 190.0 182.6 176.0 150.3

Imports (USDbn) 61.1 74.5 129.2 96.8 135.7 177.4 191.7 186.6 178.2 142.7

Trade balance (USDbn) 39.7 39.6 7.8 19.7 22.1 26.1 - 1.7 - 4.1 - 2.1 7.6

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INDONESIA GLOBAL TRADE, 2015

TOP 10 DESTINATION COUNTRIES FOR INDONESIA'S EXPORTS, 2015

RANK COUNTRY VALUE

2015 (USDbn)

% GROWTH 2014-2015

1 Japan 18.0 -22.11%

2 United States 16.3 -1.77%

3 China 15.0 -14.54%

4 Singapore 12.6 -24.59%

5 India 11.7 -4.38%

6 Korea, Republic of 7.6 -27.88%

7 Malaysia 7.6 -21.63%

8 Thailand 5.5 -4.80%

9 Taipei, Chinese 5.0 -21.60%

10 Philippines 3.9 0.86%

32 South Africa 0.7 -51.71%

TOTAL EXPORTS 150.3 -14.63%

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China was the leading import market in 2015, valued at USD29bn. Singapore and Japan were ranked second and

third valued at USD18bn and USD13bn respectively.

TOP 10 SOURCE MARKETS FOR INDONESIA'S IMPORTS, 2015

RANK COUNTRY VALUE

2015 (USDbn)

% GROWTH 2014-2015

1 China 29.4 -3.96%

2 Singapore 18.0 -28.44%

3 Japan 13.3 -22.01%

4 Malaysia 8.5 -21.42%

5 Korea, Republic of 8.4 -28.87%

6 Thailand 8.1 -17.36%

7 United States of America 7.6 -7.01%

8 Australia 4.8 -14.73%

9 Germany 3.5 -15.14%

10 Saudi Arabia 3.4 -47.49%

41 South Africa 0.2 -53.47%

TOTAL EXPORTS 142.7 -19.92%


Palm oil and its fractions was the leading export product from Indonesia valued at USD15bn. Coal; briquettes,

ovoids and petroleum gases ranked second and third valued at USD15bn and USD10bn respectively. The fastest

growing export products between 2011 and 2015 were copper ores (95%) and articles of jewellery and parts thereof

(56%).

Refined petroleum oils were also the leading imported product in Indonesia, valued at USD14bn, followed by crude

oils and telephone sets were ranked second and third at USD8bn and USD4bn respectively.

TOP 10 PRODUCTS EXPORTED BY INDONESIA 2015 TOP 10 PRODUCTS IMPORTED BY INDONESIA, 2015

RANK PRODUCT VALUE

2015 (USDbn)

% GROWTH 2011-2015

RANK PRODUCT VALUE

2015 (USDbn)

% GROWTH 2011-2015

1 Palm oil and its fractions 15.4 -11.91% 1 Refined petroleum oils and oils obtained from bituminous

14.0 -47.57%

2 Coal; briquettes, ovoids 14.7 -21.58% 2 Crude petroleum oils and oils obtained from bituminous minerals

8.1 -38.32%

3 Petroleum gas and other gaseous hydrocarbons

10.3 -39.81% 3 Telephone sets, incl. telephones for cellular networks

4.3 -11.12%

4 Crude petroleum oils and oils 6.5 -30.35% 4 Parts for tractors, motor vehicles for the transport of persons

2.5 -15.53%

5 Natural rubber, balata, gutta-percha, guayule, chicle

3.7 -21.99% 5 Wheat and meslin 2.1 -12.75%

6 Articles of jewellery and parts thereof 3.3 55.46% 6 Petroleum gas and other gaseous hydrocarbons

2.0 -33.46%

7 Copper ores and concentrates 3.3 94.65% 7 Automatic data-processing machines

1.9 -9.29%

8 Motor cars and other motor vehicles for persons

2.4 -8.04% 8 Oilcake and other solid residues 1.8 -17.35%

9 Coconut "copra", palm kernel or babassu oil

2.4 -4.27% 9 Semi-finished products of iron or non-alloy steel

1.5 -21.82%

10 Plywood, veneered panel and similar laminated wood

2.3 -1.29% 10 Electronic integrated circuits; parts thereof

1.5 -7.58%

TOTAL EXPORTS 150.3 -14.63% TOTAL IMPORTS 142.7 -19.92%


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Indonesia's imports represent 0.9% of world imports and

is the world 30th largest importer.

Indonesia's exports represent 0.9% of world exports and is the

world’s 29th largest exporter.


3.3 Trade with South Africa

Trade between South Africa and Indonesia has significantly increased from 2004 to 2015. South Africa exported

goods to the value of ZAR2.8bn in 2015 while imported goods were valued at ZAR8.9bn. South Africa has

maintained a trade deficit with Indonesia, with imports exceeding exports over the period 2006 to 2016.

Source: Quantec, 2016

The leading export product to Indonesia from South Africa in 2015, was chemical wood pulp, dissolving grades

valued at ZAR1.4bn, followed by iron ores (ZAR309m). The leading import product into South Africa from Indonesia

was palm oil and its fractions valued at ZAR2.2bn, followed by motor cars (ZAR699m).

Indonesia has an appetite for South Africa’s wood, paper, publishing and printing sector accounting for 58% of

exports, followed by mining and quarrying (13%) and metals, metal products, machinery and equipment (12%).

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exports (ZARm) 1 473 1 489 2 451 3 254 3 906 5 348 4 887 4 855 3 983 2 765

Imports (ZARm) 3 004 4 472 5 461 5 872 4 905 6 959 7 511 8 412 9 185 8 915

Trade balance (ZARm) -1 531 -2 983 -3 010 -2 618 -999 -1 611 -2 623 -3 557 -5 201 -6 150

-8 000

-6 000

-4 000

-2 000

0

2 000

4 000

6 000

8 000

10 000

Valu

e (

ZA

Rm

)

SOUTH AFRICA TRADE WITH INDONESIA, 2006-2015

Largest exporter of

Tin and articles thereof

5th largest importer of

cotton

Largest exporter

Animal or vegetable fats

and oils

5th largest importer of Sugars and

sugar confectionery

Largest importer of Vegetable plaiting materials

2nd largest exporter of Vegetable

plaiting materials

13

SOUTH AFRICA’S EXPORTS TO INDONESIA, 2015 SOUTH AFRICA’S IMPORTS FROM INDONESIA, 2015

RANK PRODUCT VALUE

2015 (ZARm)

% GROWTH 2011-2015

(USD)

RANK PRODUCT VALUE

2015 (ZARm)

% GROWTH 2011-2015

(USD)

1 Chemical wood pulp, dissolving grades 1 442.3 -11.14% 1 Palm oil and its fractions 2 193.0 7.79%

2 Iron ores and concentrates, including roasted iron pyrites.

309.3 -1.35% 2 Motor cars and other motor vehicles for the transport of persons

699.4 3.12%

3 Chemical wood pulp, soda or sulphate, other than dissolving grades

159.3 -0.96% 3 Natural rubber, balata, gutta-percha, guayule, chicle

436.4 -14.04%

4 Unwrought aluminium 112.5 16.85% 4 Motor vehicles for the transport of goods.

328.6 -2.42%

5 Ferrous waste and scrap; remelting scrap ingots of iron or steel

83.0 11.05% 5 Coconut (copra), palm kernel or babassu oil

291.2 24.66%

6 Apples, pears and quinces, fresh. 49.2 5.93% 6 Ceramic wares for laboratory, chemical or other technical uses; ceramic troughs, tubs

253.1 81.57%

7 Machinery for the industrial preparation or manufacture of food or drink

33.0 #DIV/0! 7 Industrial monocarboxylic fatty acids; acid oils from refining; industrial fatty alcohols

242.9 22.29%

8 Prepared binders for foundry moulds or cores; chemical products

30.7 2.85% 8 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials.

240.6 48.30%

9 Steam or other vapour generating boilers; super-heated water boilers

24.9 -0.51% 9 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather

203.7 3.84%

10 Aerials and aerial reflectors of all kinds; parts suitable for use therewith

24.7 5178.94% 10 Cocoa butter, fat and oil 198.9 184.58%

TOTAL EXPORTS 2 765.2 -12.89% TOTAL IMPORTS 8 914.7 2.72%


14

3.4 Western Cape Trade with Indonesia

The Western Cape exported goods to the value of ZAR143m in 2015 while imported goods were valued at

ZAR1.1bn. The Western Cape has maintained a trade deficit with Indonesia, with imports exceeding exports over

the period 2006 to 2015.


The leading export product to Indonesia from the Western Cape was fresh apples, pears and quinces valued at

ZAR45m, followed by machinery for the industrial preparation or manufacture of food or drink (ZAR27m). The

fastest growing export products were grapes (62%), citrus fruit (56%) and insecticides, rodenticides, fungicides

(40%).

Indonesia has an appetite for Western Cape’s agriculture, forestry and fishing sector (41%), followed by metals,

metal products, machinery and equipment (26%) and petroleum products, chemicals, rubber and plastic (12%).

The leading import product into the Western Cape from Indonesia was Ceramic wares for laboratory valued at

ZAR253m, followed by cocoa butter (ZAR85m).

WESTERN CAPE’S EXPORTS TO INDONESIA, 2015 WESTERN CAPE’S IMPORTS FROM INDONESIA, 2015

RANK PRODUCT VALUE

2015 (ZARm)

% GROWTH

2011-2015

(USD)

RANK PRODUCT VALUE

2015 (ZARm)

% GROWTH 2011-2015

(USD)

1 Apples, pears and quinces, fresh. 44.9 5.19% 1 Ceramic wares for laboratory, chemical or other technical uses; ceramic troughs, tubs

253.0 122.39%

2 Machinery for the industrial preparation or manufacture of food or drink

27.1 - 2 Cocoa butter, fat and oil. 85.3 -

3 Citrus fruit, fresh or dried. 8.4 55.63% 3 Electric generating sets and rotary converters.

69.8 -

4 Fruit, nuts and other edible parts of plants

7.7 25.73% 4 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration

68.1 11.95%

5 Beauty or make-up preparations and preparations for the care of the skin

7.1 - 5 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials.

44.1 56.71%

6 Grapes, fresh or dried. 6.4 61.72% 6 Other plates, sheets, film, foil and strip, of plastics, non-cellular

33.0 -0.95%

7 Printing ink, writing or drawing ink and other inks

4.9 - 7 Other furniture and parts thereof. 32.2 0.51%

8 Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products

4.5 39.89% 8 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather.

28.6 -4.99%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exports (ZARm) 171 134 273 326 429 469 416 191 327 143

Imports (ZARm) 350 586 444 1 824 457 1 142 1 128 974 791 1 093

Trade balance (ZARm) -179 -453 -171 -1 498 -28 -673 -712 -782 -464 -951

-2 000

-1 500

-1 000

-500

0

500

1 000

1 500

2 000

Valu

e (

ZA

Rm

)

WESTERN CAPE TARDE WITH INDONESIA, 2006-2015

15

WESTERN CAPE’S EXPORTS TO INDONESIA, 2015 WESTERN CAPE’S IMPORTS FROM INDONESIA, 2015

RANK PRODUCT VALUE

2015 (ZARm)

% GROWTH

2011-2015

(USD)

RANK PRODUCT VALUE

2015 (ZARm)

% GROWTH 2011-2015

(USD)

9 Mechanical appliances for projecting, dispersing or spraying liquids or powders; fire extinguishers

4.1 - 9 Pepper of the genus Piper; dried or crushed or ground fruits of the genus Capsicum

24.6 -

10 Recovered (waste and scrap) paper or paperboard.

3.3 4.50% 10 Synthetic filament yarn 24.5 11.53%

TOTAL EXPORTS 142.8 -16.60% TOTAL IMPORTS 1 093.5 20.58%


3.5 Tariffs

Indonesia is currently negotiating bilateral agreements with Iran, India, Australia, New Zealand, South Korea, and

the European Free Trade Association. In addition, Indonesia is studying potential FTAs with Chile, Turkey, Tunisia,

Mexico, South Africa, and Egypt. Indonesia is also participating in negotiations for the Regional Comprehensive

Economic Partnership, which includes the ten ASEAN members and six additional countries (Australia, China,

India, Japan, Korea, and New Zealand).

Tariffs imposed on Indonesian imports from South Africa for 2015 are listed below.

TARIFFS IMPOSED ON SOUTH AFRICAN IMPORTS BY INDONESIA, 2015

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

H01: Live animals 3.4 H33: Essential oils, perfumes,

cosmetics, toiletries 17.3 H65: Headgear and parts thereof 8.7

H02: Meat and edible meat offal 6 H34: Soaps, lubricants, waxes,

candles, modelling pastes 5.3

H66: Umbrellas, walking-sticks,

seat-sticks, whips 10.3

H03: Fish, crustaceans, molluscs,

aquatic invertebrates 5.4

H35: Albuminoids, modified

starches, glues, enzymes 4.1

H67: Bird skin, feathers, artificial

flowers, human hair 8.8

H04: Dairy products, eggs, honey,

edible animal product 5.1

H36: Explosives, pyrotechnics,

matches, pyrophorics 5.6

H68: Stone, plaster, cement,

asbestos, mica, articles 7.2

H05: Products of animal origin 4.3 H37: Photographic or

cinematographic goods 4.5 H69: Ceramic products 16.5

H06: Live trees, plants, bulbs, roots,

cut flowers 11.1

H38: Miscellaneous chemical

products 5.3 H70: Glass and glassware 6.4

H07: Edible vegetables and certain

roots and tubers 5.4 H39: Plastics and articles thereof 9.1

H71: Pearls, precious stones,

metals, coin 4.6

H08: Edible fruit, nuts, peel of citrus

fruit, melons 6.7 H40: Rubber and articles thereof 7.3 H72: Iron and steel 5.3

H09: Coffee, tea, mate and spices 5 H41: Raw hides and skins (other

than furskins) and leather 0.3 H73: Articles of iron or steel 9.4

H10: Cereals 4.1 H42: Articles of leather, animal gut,

harness, travel goods 12.5 H74: Copper and articles thereof 4.9

H11: Milling products, malt,

starches, inulin, wheat gluten 6.3

H43: Furskins and artificial fur,

manufactures thereof 8 H75: Nickel and articles thereof 4.9

H12: Oil seed, oleagic fruits, grain,

seed, fruit, 1.5

H44: Wood and articles of wood,

wood charcoal 3.1 H76: Aluminium and articles thereof 5.4

H13: Lac, gums, resins, vegetable

saps and extracts 5 H45: Cork and articles of cork 5 H78: Lead and articles thereof 5.2

H14: Vegetable plaiting materials,

vegetable products 1.8

H46: Manufactures of plaiting

material, basketwork, etc. 5 H79: Zinc and articles thereof 1.8

H15: Animal, vegetable fats and

oils, cleavage products, 2.4

H47: Pulp of wood, fibrous

cellulosic material, waste 1.7 H80: Tin and articles thereof 5

H16: Meat, fish and seafood food

preparations 5

H48: Paper & paperboard, articles

of pulp, paper and board 4.8

H81: Other base metals, cermets,

articles thereof 3.8

H17: Sugars and sugar

confectionery 11.9

H49: Printed books, newspapers,

pictures 2.7

H82: Tools, implements, cutlery, of

base metal 3.3

H18: Cocoa and cocoa preparations 6.5 H50: Silk 7.1 H83: Miscellaneous articles of base

metal 9.7

16

TARIFFS IMPOSED ON SOUTH AFRICAN IMPORTS BY INDONESIA, 2015

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

H19: Cereal, flour, starch, milk

preparations and products 5.1

H51: Wool, animal hair, horsehair

yarn and fabric thereof 8.1

H84: Nuclear reactors, boilers,

machinery 4.3

H20: Vegetable, fruit, nut food

preparations 5.8 H52: Cotton 5.7

H85: Electrical, electronic

equipment 1.9

H21: Miscellaneous edible

preparations 26.3

H53: Vegetable textile fibres paper

yarn, woven fabric 7.3

H86: Railway, tramway locomotives,

rolling stock, equipment 0.5

H22: Beverages, spirits and vinegar 89.9 H54: Manmade filaments 10.4 H87: Vehicles other than railway,

tramway 18

H23: Residues, wastes of food

industry, animal fodder 1.1 H55: Manmade staple fibres 7.8

H88: Aircraft, spacecraft, and parts

thereof 0

H24: Tobacco and manufactured

tobacco substitutes 24.6

H56: Wadding, felt, nonwovens,

yarns, twine, cordage 5.9

H89: Ships, boats and other floating

structures 4.5

H25: Salt, sulphur, earth, stone,

plaster, lime and cement 2.4

H57: Carpets and other textile floor

coverings 14.9

H90: Optical, photo, technical,

medical apparatus 4.7

H26: Ores, slag and ash 1.4 H58: Special woven or tufted fabric,

lace, tapestry 9.2

H91: Clocks and watches and parts

thereof 8.4

H27: Mineral fuels, oils, distillation

products, 0.9

H59: Impregnated, coated or

laminated textile fabric 8

H92: Musical instruments, parts and

accessories 7.5

H28: Inorganic chemicals, precious

metal compound, isotopes 4.7 H60: Knitted or crocheted fabric 10

H93: Arms and ammunition, parts

and accessories thereof -

H29: Organic chemicals 4.5 H61: Articles of apparel,

accessories, knit or crochet 14.9

H94: Furniture, lighting, signs,

prefabricated buildings 9.4

H30: Pharmaceutical products 3.5 H62: Articles of apparel,

accessories, not knit or crochet 14.8 H95: Toys, games, sports requisites 12.1

H31: Fertilizers 0 H63: Other made textile articles,

sets, worn clothing 12.5

H96: Miscellaneous manufactured

articles 9.3

H32: Tanning, dyeing extracts,

tannins, derivatives, pigments 5.2

H64: Footwear, gaiters and the like,

parts thereof 16.8

H97: Works of art, collectors pieces

and antiques 5

Source: Market Access Map, 2016

NOTE: Exporters should not take the HS2 tariff as conclusive and as the actual tariff that will be applied to the exported product.

The tariffs indicated above are average tariffs and for products within the category it may be higher or lower than indicated. Where

the tariff is zero it can be assumed that there is zero tariff applicable to all products within that HS code. Tariffs are determined

according to the importing country’s national tariff line from the HS6 level and upwards. Exporters are advised to visit

www.macmap.org to determine the exact tariff applicable to the product at HS6.

3.6 Trade Regulations Markings and Standards Import Tariff

In 2013 Indonesia’s average most-favored-nation applied tariff was 6.9 percent. Indonesia periodically changes its

applied rates thereby causing some unpredictability in the market. Luxury goods (defined as goods not considered

necessities), imported or locally produced, may be subject to a luxury tax of up to 200 percent. Currently, however,

there are no luxury goods subject to the 200 percent rate, and the applied luxury tax rates generally range from 10

to 75 percent, depending on the product.

Trade Barriers

Indonesia continues to enforce a ban on imports of poultry parts, which has been in place since 2000. An

Indonesian Ministry of Finance regulation imposed import duties on alcoholic beverages containing ethyl alcohol

on April 7, 2010. This regulation changed the tariff from an ad valorem tariff to a specific tariff. The new tariff ranges

from Indonesian rupiah (Rp.) 14,000/liter to Rp. 125,000/liter. The Indonesian Ministry of Finance also eliminated

the luxury tax on alcoholic beverages and increased the excise tax. The excise tax ranges from Rp 13,000 to Rp.

139,000 per liter.

Labelling

All imported consumer goods must identify the importing agents. The GOI requires that information on product

labels be distinctly and clearly written or printed or shown so that it can be seen easily and understood. The

information on product labels should be written or printed in the Indonesian language, Arabic numbers, and Latin

http://www.macmap.org/

17

letters. The use of language, numbers, and letters other than the Indonesian language will only be permitted when

there are no matching terms, or in the event of trading abroad.

Labeling should not contain the following: claims on the effect of the product on health, whether preventative and/or

curative; incorrect or misleading information; comparisons to other products; promotion of certain similar products;

and any additional information that has not yet been approved.

3.7 Port-to-Port Rates

Major ports and harbors include Cilacap, Cirebon, Jakarta, Kupang, Palembang, Semarang, Surabaya, and

Makassar. Ports are managed by the various Indonesia Port Corporations, of which there are four. Each has

jurisdiction over various regions of the country. The table below shows the transit times for shipping from Cape

Town to the four largest ports in Indonesia.

TRANSIT TIME FROM CAPE TOWN TERMINAL TO THE FOUR LARGEST PORTS IN INDONESIA, 2013

TERMINAL DISTANCE TRANSIT TIME

Jakarta Port 9624.13 km 15 days(s) 11 hours

Surabaya Port 10306.09 km 16 days(s) 13 hours

Belawan 9784.00 km 15 days(s) 17 hours

Ujung Pandan 9784.00 km 15 days(s) 17 hours

Source: SeaRates, 2016

18

4. Investment

4.1 Global Investment into Indonesia

Between January 2003 and December 2015 a total of 1,696 FDI projects were recorded into Indonesia. These

projects represent a total capital investment of ZAR2, 889.86bn which is an average investment of ZAR1, 703.66m

per project. During the period, a total of 540,820 jobs were created.

Source: FDI Intelligence, 2016

Japan was the largest source market for inward FDI into Indonesia in terms of projects, with 382 investment projects,

accounting for 22.52%. The United States and Malaysia are ranked second and third accounting for 10.85% and

7.08% respectively.

TOP SOURCE MARKETS FOR FDI INTO INDONESIA, 2003 - 2015

RANK COUNTRY PROJECTS %

PROJECTS CAPEX (ZARm)

% CAPEX

COMPANIES %

COMPANIES

1 Japan 382 22.52% 477 805 16.53% 271 22.07%

2 United States

184 10.85% 394 729 13.66% 137 11.16%

3 Malaysia 120 7.08% 146 286 5.06% 87 7.08%

4 Singapore 99 5.84% 131 165 4.54% 58 4.72%

5 China 89 5.25% 381 654 13.21% 66 5.37%

6 South Korea

75 4.42% 175 900 6.09% 53 4.32%

7 UK 75 4.42% 114 457 3.96% 60 4.89%

8 France 74 4.36% 141 687 4.90% 36 2.93%

9 Germany 74 4.36% 46 544 1.61% 50 4.07%

10 India 72 4.25% 135 047 4.67% 52 4.23%

Total 1 696 100% 2 889 862 100% 1 228 100%


The figures below show global inward FDI into Indonesia by sector, for the period January 2003 to December 2015

by number of projects and CAPEX. The coal, oil and natural gas sector and the food and tobacco sector received

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Capex (ZARm) 125 37 145 80 102 00 156 06 201 81 382 07 304 69 153 04 289 75 160 45 214 26 202 98 451 53

Projects 62 64 74 103 87 137 120 131 171 192 212 170 173

50

100

150

200

250

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

500 000

Pro

jects

Valu

e (

ZA

Rm

)

INWARD FDI INTO INDONESIA, 2003 - 2015

19

the largest FDI accounting for 9% each followed by the financial services sector and metals sector at 7% each. In

terms of CAPEX coal, oil and gas was again the largest with 31%, followed by metals at 24%.



Indonesia’s retail sub-sector received the largest share of FDI in terms of projects between January 2003 and

December 2015, followed by the automobiles and freight/distribution services 2.83% and 2.71% respectively. In terms

of capex, the oil and gas sector received the largest FDI accounting for 10.81%, followed by fossil fuel electric power

at 7.62%.

Coal, Oil and Natural Gas31% Metals

24%

Chemicals7%

Alternative/Renewable energy

4%

Food & Tobacco4%

Automotive OEM4%

Real Estate4%

Rubber3%

Transportation2%

Financial Services2%

Other sectors15%

INWARD FDI INTO INDONESIA SECTOR BY CAPEX, 2003 - 2015

Coal, Oil and Natural Gas9% Food & Tobacco

9%

Financial Services

7%

Metals7%

Business Services

6%

Software & IT services5%

Transportation5%

Chemicals5%

Automotive Components

5%

Automotive OEM4%

Other sectors38%

INWARD FDI INTO INDONESIA SECTORS BY PROJECTS, 2003 - 2015

20


4.07%

2.83%

2.71%

2.65%

2.54%

2.36%

2.18%

2.18%

2.12%

2.00%

1.89%

1.77%

1.71%

1.65%

1.53%

1.53%

1.47%

1.42%

1.36%

1.36%

0.96%

3.24%

1.06%

0.17%

10.81%

3.45%

0.44%

0.86%

0.94%

2.76%

0.25%

0.96%

5.27%

0.82%

1.88%

0.56%

0.34%

7.62%

0.08%

0.09%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

Retail banking

Automobiles

Freight/Distribution Services

Software publishers, except video games

Oil & gas extraction

Steel products

Clothing & clothing accessories

Paints, coatings, additives & adhesives

Food & Beverage Stores (Food & Tobacco)

Other petroleum & coal products

Other motor vehicle parts

Cosmetics, perfume, personal care & householdproducts

Basic chemicals

Motorcycle, bicycle, & parts

Accommodation

Insurance

Corporate & investment banking

Fossil fuel electric power

Advertising, PR, & related

Internet publishing & broadcasting & web search

INWARD FDI INTO INDONESIA, 2003 - 2015

capex projects

21

4.2 Global Investment from Indonesia

Between January 2003 and December 2015 a total of 126 FDI projects were recorded from Indonesia. These

projects represent a total capital investment of ZAR204.44bn which is an average investment of ZAR1.62bn per

project. During the period, a total of 33,194 jobs were created.


China was the largest destination market in terms of projects for FDI from Indonesia, with 25 investment projects,

accounting for 19.84%. Singapore and Malaysia are ranked second and third accounting for 10.32% and 8.73%

respectively. The top 6 destination markets are Asian markets.

TOP DESTINATION MARKETS FOR FDI OUT OF INDONESIA, 2003 - 2015

RANK COUNTRY PROJECTS %

PROJECTS CAPEX (ZARm)

% CAPEX COMPANIES %

COMPANIES

1 China 25 19.84% 141 007 68.97% 21 28.00%

2 Singapore 13 10.32% 4 110 2.01% 12 16.00%

3 Malaysia 11 8.73% 2 185 1.07% 10 13.33%

4 Myanmar (Burma)

10 7.94% 11 193 5.48% 9 12.00%

5 India 8 6.35% 1 449 0.71% 6 8.00%

6 Vietnam 8 6.35% 3 595 1.76% 8 10.67%

7 Saudi Arabia 6 4.76% 1 127 0.55% 3 4.00%

8 Netherlands 4 3.17% 595 0.29% 4 5.33%

9 United States 4 3.17% 865 0.42% 4 5.33%

10 Australia 3 2.38% 539 0.26% 3 4.00%

Total 126 100% 204 437 100% 75 100%


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Projects 8 8 7 5 9 4 10 11 4 17 9 21 13

Capex 55 28 2 043 5 457 8 508 19 97 1 592 12 85 3 421 58 55 10 09 4 201 14 23 8 223

5

10

15

20

25

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

Pro

jects

valu

e (

ZA

Rm

)

OUTWARD FDI FROM INDONESIA, 2003 -2015

22

Financial services and coal, oil and natural gas both received the largest FDI from Indonesia by projects accounting

for 13% and 8% respectively. This was followed by the communications sector at 7%. In terms of capex paper,

printing and packaging received the largest FDI at 45%, followed by real estate at 16% and coal, oil and natural

gas at 10%.



In terms of sub-sectors, the retail banking sector received the largest FDI from Indonesia at 11.90%, followed by

clothing and clothing accessories and cosmetics, perfume, personal care & household products at 5.56% and

4.76% respectively. Pulp, paper and paperboard received the largest FDI from Indonesia in terms of capex

accounting for 43.71% followed by residential building construction oil and gas accounting for 16.10% and 6.23%

respectively.

Financial Services13%

Coal, Oil and Natural Gas8%

Communications7%

Consumer Products6%

Paper, Printing & Packaging

6%

Textiles6%Food & Tobacco

6%

Software & IT services6%

Real Estate5%

Transportation5%

Other sectors32%

OUTWARD FDI BY INDONESIA INTO GLOBAL SECTORS BY PROJECTS, 2003 - 2015

Paper, Printing & Packaging

45% Real Estate16%

Coal, Oil and Natural Gas10%

Chemicals5%

Healthcare3%

Building & Construction MaterialsFinancial Services

3%

Rubber2%

Transportation2%

Warehousing & Storage

2%

Other Sectors9%

OUTWARD FDI BY INDONESIA INTO GLOBAL SECTORS BY CAPEX, 2003 - 2015

23


11.90%

5.56%

4.76%

3.97%

3.97%

3.97%

3.97%

3.17%

3.17%

3.17%

3.17%

3.17%

3.17%

2.38%

2.38%

1.59%

1.59%

1.59%

1.59%

1.59%

2.37%

0.31%

0.84%

1.72%

3.70%

0.22%

0.24%

2.59%

1.32%

6.23%

43.71%

16.10%

0.02%

3.51%

0.17%

0.35%

0.32%

0.61%

0.09%

0.38%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%

Retail banking

Clothing & clothing accessories

Cosmetics, perfume, personal care & household products

Air transportation

Other petroleum & coal products


Wireless telecommunication carriers

Cement & concrete products

Converted paper products

Oil & gas extraction

Pulp, paper, & paperboard

Residential building construction

Travel arrangement & reservation services

General medical & surgical hospitals

Nonferrous metal production & processing

Basic chemicals

Commercial & institutional building construction

Data processing, hosting, & related services

Fishing, hunting & trapping

Grains & oilseed

OUTWARD FDI FROM INDONESIA BY SUB-SECTORS, 2003 - 2015

Capex Projects

24

4.3 Investment Relations between South Africa and Indonesia

In February 2015 - a subsidiary of South Africa-based Switchless, invested in the city of Jakarta, in the Software &

IT services sector valued at ZAR75m and created 23 jobs. Also in February 2015 South Africa-based Cartrack, a

provider of fleet management, stolen vehicle recovery, and insurance telematics services, opened a new office in

Jakarta. The firm has expanded its presence in Asia to meet strong demand for fleet management and stolen

vehicle recovery services. The investment is valued at ZAR75m and created 23 jobs.

Previous to the above investments, SRK Consulting (South Africa) invested in the city of Jakarta in 2009 in the

business services sector in a business services project, valued at ZAR28.1m and creating 10 jobs. The company

is an independent, international consulting practice that provides advice and solutions to clients, mainly from earth

and water resource industries.

There was no recorded FDI into South Africa from Indonesia recorded by FDI Intelligence.

SOUTH AFRICAN FDI INTO INDONESIA, 2003 - 2015

DATE INVESTING COMPANY

SOURCE CITY

SECTOR SUB -SECTOR INDUSTRY ACTIVITY

CAPEX (ZARm)

JOBS

Feb 2015

Cartrack Gauteng Software & IT services


Sales, Marketing & Support

75.0 23

Feb 2015

BitX Western Cape

Software & IT services


Sales, Marketing & Support

75.0 23

Jan 2009

SRK Consulting

Gauteng Business Services

Architectural, engineering, & related services

Business Services

28.1 10

Total 178.1 56


25

5. Tourism

5.1 Indonesia Trends and Travel Patterns

According to Business Monitor International (2016), over the medium term, as the economy in Indonesia grows,

we expect to see a strong increase in private financial consumption of around 6% a year, as an affluent middle

class develops in the country, boosting the potential of both the domestic tourism market and the smaller outbound

tourism market. Thanks to this growth in the domestic economy, we expect that outbound travel will increase to

10.0mn in 2020 from 9.5mn in 2016, meaning the number of average tourist departures per 1,000 of the population

will remain around 0.04 during the forecast period. This growth indicates a range of opportunities for travel providers

and tour operators in Indonesia; however, the domestic travel market will remain more substantial for some time to

come.

5.2 Indonesia Tourist Arrivals into South Africa

The graph below depicts total tourist arrivals from Indonesia into South Africa between 2013 and 2015. The number

of Indonesia arrivals into South Africa decreased by 34% in 2015 in line with other markets that were affected by

global economy slowdown.

Source: SATourism, 2016

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publications visit the Wesgro publications portal on our website at http://wesgro.co.za/publications

2013 2014 2015

Total Arrivals 3 486 3 102 2 040

Growth -11.02% -34.24%

-40.00%

-35.00%

-30.00%

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

% G

row

thT

ou

rist

Arr

ivals

INDONESIA TOURIST ARRIVALS TO SOUTH AFRICA, 2013-2015

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Documents

Indonesia...cited sluggish global economic growth, low commodity prices, and lower-than-expected GDP growth in 2016 Q1 for the downward revision. Still, forecasts remain buoyant overall