Indonesia

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Growth in Indonesia’s manufacturing sector continues to outstrip the rest of the economy, with gains in most industries well above those of the national average. Some regions away from Java posted even higher rates of expansion, though there are lingering concerns some of this growth is underpinned by a reliance on commodities imports – one that fuels the current account deficit.

Having learned the lessons of the 1997-98 financial crisis, Asia has since enjoyed a period of steady growth driven by consumption, investment and exports. The traditional model of low-cost manufacturing and exports to advanced markets has gradually been replaced with a more consumer-oriented and value-added approach. 

Historically fragmented and often overlooked by emerging market investors, South-east Asia has become one of the leading destinations for FDI in recent years. The creation of ASEAN, South-east Asia’s unified economic and trade bloc, has encouraged regional cooperation and better connectivity.  

Indonesia is eyeing higher export levels in the second half of 2014, despite continuing concerns over the impact of a controversial ban on shipments of a key commodity.
Concerns that one of Indonesia’s best-known tourism destinations, the tropical island of Bali, is being overrun by foreign holidaymakers and that its very popularity is putting at risk the natural attractions that draw so many visitors have prompted renewed calls to broaden the base of the country’s tourism industry, with greater emphasis put on developing new and sustainable resorts.
A shift of emphasis is under way in the regime governing Indonesia’s foreign direct investment (FDI), as the country moves to boost capital inflows in some areas of the economy through regulatory changes, while closing other sectors to international players.

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