With full-year realised foreign direct investment (FDI) hitting a new record in 2014, Indonesia’s trade and investment flows have improved considerably over the last 10 years. The capital account deficit was brought back under 3% that year, and at the end of 2014 and in early 2015 the country reported a trade surplus after years in the red. Due to stronger economic growth and new policy...
Indonesia
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Chapter | Trade & Investment from The Report: Indonesia 2015
Chapter | Country Profile from The Report: Indonesia 2015
With the July 2014 election of a new president, Joko Widodo, a new mood of confidence and optimism is palpable in Indonesia, the world’s third-largest democracy and most populous Muslim-majority nation. Hopes are high that a new dynamism in Jakarta will see many long-standing challenges addressed. At the same time, the country’s economic expansion is continuing apace, with a large, young...
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.
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.
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.