Historically, Indonesia’s industrial sector has long been content to target the low-hanging fruit of its sizeable captive domestic market for much of its output, while exporting primarily raw materials or low-value-added products abroad. But in line with the evolution of the country’s economy, a strategic shift has been accelerating over the past decade, which is aimed at diversifying the...
Indonesia Industry
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The Indonesian government is in the midst of pursuing an ambitious new growth strategy, emphasizing investment over domestic consumption as a primary growth driver in the wake of depressed commodity prices, lagging household consumption and lower-than-anticipated government revenues.
Industrial development is perhaps the most important pillar of Indonesia’s long-term economic expansion strategy, and the nation has made significant economic strides in recent years as a result of its fast-expanding industrial sector. The country is now poised to outpace Thailand and Malaysia as a major regional manufacturing and export hub, and investors are increasingly choosing Indonesia...
Indonesia is transforming from a resources- and consumption-based economy to a more manufacturing- and investment-oriented one, working to build an industrial base that will allow it to reduce its dependence on imports and keep more value within the economy. Following his inauguration in October 2014, President Joko Widodo quickly took a number of vital and positive steps that so far are increasing opportunities for foreign direct investment.
On the cusp of 2014 national elections and the 2015 integration of the ASEAN Economic Community, Indonesia is poised to continue its rapid economic expansion. While the country’s natural resources are still plentiful, by channelling foreign direct investment into the right areas, the government is ensuring that true potential, in terms of value and manufacturing, is achieved.
Chapter | Infrastructure from The Report: Indonesia 2014
A result of decades of underinvestment, creaky infrastructure has long been the Achilles’ heel of the Indonesian economy. Around $6.8bn will be spent on power and some $29bn on water utilities and other services under the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development. The government is expected to fund 28% of the cost, with the rest coming from the private...