| ECONOMY. Indonesia is a market-based economy | | | | Union.INFRASTRUCTURE. Indonesia's domestic |
| but the government plays a significant role in the | | | | telecommunication system is generally fair while |
| country's economy with 160 government-owned | | | | its international services can be categorised as |
| enterprises. Indonesia's GDP per capita ranks fifth | | | | good. Internet broadband services are mainly |
| after Singapore, Brunei, Malaysia and Thailand. The | | | | concentrated in the major cities. Road systems |
| Asian economic crisis of 1997 adversely affected | | | | are more developed on Indonesia's populated |
| the country economy and businesses and caused | | | | island of Java, fairly developed in Sumatra and |
| spiralling prices of necessities resulting in social | | | | Sulawesi but poorly developed on the island of |
| unrest. Future prospects of Indonesia's economy | | | | Kalimantan. Besides sea ports serving the |
| are bright with economic structural reforms in | | | | international shipping lines, Indonesia are also |
| placed since the Asian economic crisis.Indonesia's | | | | served by smaller sea ports serving coastal |
| GDP was US$258.3 billion with a GDP per capita of | | | | shipping. All the cities and major towns are |
| US$1,193 in 2004. Indonesia's real GDP grew at an | | | | connected by airline services.INTERNATIONAL |
| average of 4.6% annually from 2000 to 2004 | | | | TRADE. Indonesia's major trading partners include |
| driven by domestic consumption accounting for | | | | Japan, US, Singapore, South Korea and China. |
| nearly three-quarters of Indonesia's GDP. Inflation | | | | Much of the imports from Singapore are |
| rose from 3.8% in 2000 to 11.9% in 2002 but | | | | Singapore's re-exports from other countries and |
| eventually declined to 6.1% by 2004. GDP per | | | | exports to Singapore are re-exported to other |
| capita increased from US$801 in 2000 to | | | | countries. Main exports from Indonesia include oil |
| US$1,193 in 2004 but unemployment also | | | | and gas, electrical appliances, plywood, textiles and |
| increased from 6.1% to 9.9% during the | | | | rubber products. Main imports include machineries |
| period.The manufacturing sector contributed | | | | and equipments, transport equipments, chemicals, |
| towards 43.7% of Indonesia's GDP in 2004 while | | | | fuels and foods.CONSUMER USAGE OF |
| the service sector contributed 40.9%. Though | | | | TECHNOLOGY. Mobile phone penetration is just |
| nearly 45.0% of the country's workforce is | | | | 13% of the populations, which is lower than |
| involved in agriculture, this sector contributed only | | | | Singapore (93%), Malaysia (67%) and Thailand |
| 15.4% of the country's GDP during the period. | | | | (45%). Furthermore, there are only 10 million |
| Major industries include petroleum and natural gas, | | | | fixed-line telephones serving the whole country. |
| textiles, apparel, footwear, mining, cement, | | | | The penetration of computers is less than 2% of |
| chemical fertilisers, plywood, rubber, food and | | | | the households and the country has only 1.2 million |
| tourism. Major agriculture products include rice, | | | | internet subscribers with an estimated 12 million |
| palm oil, rubber, cacao, peanuts, copra and | | | | internet users i.e. a penetration of only 0.5% of |
| cloves.DEMOGRAPHY. Indonesia comprises nearly | | | | the population. Most middle and high-income |
| 18,000 islands and has the largest population | | | | homes would own televisions but the penetration |
| among the Southeast Asian countries with 217 | | | | in lower income homes is lower. Thus the |
| million people in 2004. Main islands are Java | | | | household penetration of television in Java is |
| accounting for 55% of the population followed by | | | | nearly 60% and in Sumatra 52%. Similar scenario |
| Sumatra (18%), Kalimatan (5%) and Sulawesi | | | | exists for refrigerators.RETAIL MARKET. Retail |
| (6%). Other less populated islands include Irian | | | | sales of food and non-food items totalled an |
| Jaya, Bali and Nusa Tenggara.Indonesia is a | | | | estimated US$32 billion in 2004. Many Indonesians |
| country of diverse ethnic and sub-ethnic | | | | still shop at the traditional markets or "mom and |
| communities with different languages and dialects, | | | | pop" establishments but shopping at modern |
| cultures and foods. The Javanese accounts for | | | | shopping malls, hypermarkets, supermarkets, |
| 45% of the population followed by Sundanese | | | | mini-markets and supermarkets is increasingly |
| (14%) and Madurese (8%) and coastal Malays | | | | popular. There are nearly 5,000 such modern |
| (8%). Chinese who migrated to Indonesia during | | | | establishments in Indonesia accounting US$4.5 |
| the Dutch colonial period account for nearly 5% of | | | | billion in retail sales in 2004. Most of these |
| the population. Islam is the predominant religion | | | | establishments are concentrated on the island of |
| followed by Christianity and minority religions | | | | Java followed by Sumatra. Since 1998, the |
| include Buddhism and Hinduism. The national | | | | government opened the retail industry to foreign |
| language is Bahasa Indonesia (similar to Malay used | | | | investments and participation.FOOD CULTURE. |
| in Malaysia, Singapore and Brunei). English is not | | | | Indonesia's food culture is diverse because of the |
| widely used but many businesses and | | | | various ethnic and sub-ethnic communities that |
| government officials dealing with foreign | | | | comprise the country's population. Typical meals |
| companies and foreigners are fluent in the | | | | eaten are rice-based dishes and occasionally |
| language.More than half of the population live in | | | | noodles. However, there are many western |
| the rural areas but the proportion of the urban | | | | franchise fast food outlets located mainly in the |
| population is increasing from 36.0% in 1995 to | | | | major cities such as Jakarta, Surabaya, Bandung, |
| 45.0% by 2004. Major cities include Jakarta with a | | | | Semarang and Yogyakarta. Mid to high-end |
| population of 10 million followed by Surabaya, | | | | bakery outlets serving western and local bakeries |
| Bandung, Semarang, Yogyakarta, Surakarta, | | | | are also found in the major cities.Khal Mastan is a |
| Medan and Padang. | | | | Senior Consultant with Pegasus Business and |
| Nearly 25% of the population live below the | | | | Market Advisory ( based in Malaysia. He involves |
| poverty level while another 60% are from the | | | | himself in business and marketing research and |
| lower income group. The remaining 10% belong to | | | | provides consulting services on markets in |
| the middle income and 5% in the higher income | | | | Southeast Asia namely Malaysia, Thailand, |
| group. Though Indonesia has a relatively small | | | | Singapore, Indonesia, Philippines and Brunei. He has |
| proportion of middle to high-income consumers, | | | | more than 20 years experience in the region and |
| this equates to nearly 33 million consumers. This is | | | | work experience in various industries. He holds a |
| more than Singapore's 4.3 million population with a | | | | bachelors degree in Biochemistry and an MBA. He |
| GDP per capita on par with many advanced | | | | can be contacted at or +6 (03) 7726 5373 in |
| economies of the European | | | | Malaysia. |