Indonesia

State-controlled natural gas distributor Perusahaan Gas Negara (PGN) has objected to calls for a potential price increase from its upstream suppliers. At the same time, the distributor, facing rising domestic demand and an irregular supply, is considering new sources of natural gas, including the purchase of blocks in North Sumatra.

Indonesia is attracting increasing attention from the international communications sector, both as a market for advanced products and due to its burgeoning profile as a centre of development and innovation.

With live cattle exports from Australia to Indonesia resumed and plans for banking investment and a free trade deal in the works, burgeoning economic ties between the neighboring countries seem back on track.

Recent reports indicate that Indonesia’s banking sector is growing, with profits, assets and loans showing significant year-on-year increases during the first four months of 2011. The system is also stable, with the sector’s average capital adequacy ratio (CAR) at about 16%. However, there have been calls for the country’s banks to improve corporate governance and implement risk management measures.

A recent wave of investment in manufacturing in Indonesia could herald the country’s rise as an international industrial player. A rapidly growing domestic market of more than 230m people, as well as the potential for exports both regional and across the globe, are major draws for companies from around the world.

Indonesia’s newly published economic master plan sets out ambitious targets to become one of the world’s biggest economies over the next 15 years. The plan unveiled by President Susilo Bambang Yudhoyono (SBY) also put the spotlight on the need for heavy investments in infrastructure coupled with improvement in the investment climate.