Trade & Investment

Indonesia Trade and Investment 2014
Despite a 6.7% contraction in net exports in 2012, the value of Indonesia’s trade has expanded significantly over the past decade, with a doubling of exports between 2006 and 2011 to $203.50bn. Rising demand from Asian markets for Indonesia’s key commodity outputs has spurred a redirection of trade. Yet, with most foreign direct investment flowing to sectors linked to consumption, trade has been a smaller growth driver than household spending. This comes despite ASEAN-wide trade liberalisation that has encouraged conglomerates to expand their supply chains to Indonesia. By the first half of 2013, Indonesia’s 10 largest export markets accounted for 73.6% of its total exports, roughly 70% of which stay in Asia. In the first half of 2013, FDI accounted for 68.57% of total investment, while the total stock of inward FDI grew tenfold from 2000 to 2012, reaching $205.66bn. US Investment in oil, gas and mining grew 11% in the eight years to 2012, while manufacturing saw a rise of 21%. By 2012, 52.2% of US FDI was in extractive industries and 46.1% in manufacturing. As investment in Indonesia’s non-commodity sectors continues to grow, the authorities will need to expand access to credit and export finance for its small and medium-sized enterprises, which are key to reducing Indonesia’s reliance of commodity exports. This chapter contains interviews with Muhammad Lufti, Minister of Trade; Le Luong Minh, Secretary-General, ASEAN; Sri Mulyani Indrawati, Managing Director, World Bank; Paul Wolfowitz, former US Ambassador to Indonesia, and Visiting Scholar, American Enterprise Institute; and Wishnu Wardhana, Chair, APEC Business Advisory Council (ABAC) 2013, and President Director and Group CEO, Indika Energy.
Cover of The Report: Indonesia 2014

The Report

This chapter is from the Indonesia 2014 report. Explore other chapters from this report.

Interviews & Viewpoints

Sketch of Wishnu Wardhana, Chair, APEC Business Advisory Council (ABAC) 2013, and President Director and Group CEO, Indika Energy
Wishnu Wardhana, Chair, APEC Business Advisory Council (ABAC) 2013, and President Director and Group CEO, Indika Energy: Interview

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