CONTENTS INDONESIA 2012:

COUNTRY PROFILE Island life: A rich and colourful archipelago POLITICS Rising to the challenge: Growth and reform have continued despite difficult conditions Interview: President Susilo Bambang Yudhoyono At the helm: Chairing ASEAN presents an opportunity to increase regional influence Interview: Abdullah Gül, President of Turkey Interview: Marty Natalegawa, Minister of Foreign Affairs Party lines: Political groups share similar ideologies but differ in leadership styles A focus on unity: Bringing diversity together Interview: Surin Pitsuwan, Secretary-General, ASEAN Viewpoint: Hillary Clinton, US Secretary of State Viewpoint: William Hague, UK Secretary of State for Foreign and Commonwealth Affairs ECONOMY At the centre of attention: Growth continues, driven by private consumption and investment Interview: Hatta Rajasa, Coordinating Minister of Economy Interview: Agus Martowardojo, Minister of Finance On again, off again: The central bank responds Investors welcome: Efforts to enhance incentives Interview: Prijono Sugiarto, President Director, Astra International Interview: Gita Wirjawan, Minister of Trade and Chairman, Investment Coordinating Board Portfolio prospects: Strong fundamentals support a positive outlook for markets Defending a stable rate: The central bank steps in Prime target: Foreign investors return A driving force: Private consumption boosts economic growth Interview: Bobby Umar, President Director, Bakrie & Brothers Viewpoint: Maxime Verhagen, Deputy Prime Minister and Minister of Economic Affairs of the Netherlands BANKING Size and scope: New opportunities emerge as infrastructure plans are realised A rising star: Sharia-compliant financing is an increasingly popular alternative Interview: Darmin Nasution, Governor, Bank Indonesia Interview: Gatot M Suwondo, President Director, Bank Negara Indonesia A closer look: Profiles of the leading banks Roundtable: Jahja Setiaatmadja, President Director, BCA; Michael Young, President Director, HSBC; Zulkifli Zaini, President Director, Bank Mandiri; and David Fletcher, President Director, Permata Bank Managing downside: The rate of loan defaults declines as bankers grow more cautious CAPITAL MARKETS New heights: The IDX rallies while the regulator is increasing options for investors and boosting transparency Added liquidity: The subject remains an issue Clear targets: A stronger regulatory framework will promote a stable financial system Interview: Nurhaida, Chairman, Bapepam In the mix: Investor appetite for Indonesian bonds continues Stocks & bonds: Share analysis & data provided by Bank Negara Indonesia Aneka Tambang: Mining & metals XL Axiata: Telecommunications Kalbe Farma: Pharmaceuticals Agung Podomoro Land: Real estate AKR Corporindo: Distribution Jasa Marga: Toll roads INSURANCE The contest for coverage: Major players prepare to profit from long-term potential Going micro: Targeting low-income markets Interview: Hotbonar Sinaga, CEO, Jamsostek Life lines: Rapid growth in unit-linked coverage A large margin: Health care coverage is modest but profitable INFRASTRUCTURE Realising potential: Jumping the economic hurdles of connectivity and transport Footing the bill: Development funding is being met by a mix of sources Interview: Kuntoro Mangkusubroto, Head, Presidential Delivery Unit ENERGY Mixing it up: New acquisitions and expansions in hydrocarbons and electricity Interview: Evita Legowo, Director-General, Oil and Gas Directorate, Ministry of Energy and Mineral Resources Interview: Karen Agustiawan, President Director, Pertamina Gassing up: A renewed focus on producing for domestic consumption Roundtable: Jim Taylor, President Director, ConocoPhillips; Sammy Hamzah, CEO, Ephindo; Terry McPhail, President & General Manager, ExxonMobil; and Hilmi Panigoro, President Commissioner, Medco Into the deep: Firms see greater potential in coal bed methane extraction Natural potential: Laying plans for renewables development MINING Forward momentum: Increasing domestic production is capitalising on high prices Gold standard: Two companies lead production of gold and copper Interview: Martiono Hadianto, President Director, Newmont, and Chairman, Indonesia Mining Association Elemental production: Varying tin prices impact local manufacturing output INDUSTRY & RETAIL A stronger foundation: The focus remains on becoming an industry-based economy Interview: Sudhamek AWS, President Director, GarudaFood Interview: John Gledhill, President Director, HM Sampoerna An evolving tradition: Traditional tobacco products continue to lead the segment A matter of choice: Growing disposable income is creating demand for new products Roadrunners: Buying an automobile is an option for increasing numbers of citizens Plug in, switch on: The market for electronics is growing quickly Viewpoint: Fransiscus Welirang, Director, Indofood Interview: Suryo Sulisto, Chairman, Indonesian Chamber of Commerce and Industry New demands: Expansion continues, while impact from free trade agreements begins to be felt CONSTRUCTION & REAL ESTATE Ready to be realised: If regulatory barriers can be overcome, massive potential awaits Putting it all together: Cement companies are preparing for significant growth Making it work: The government is setting up agencies to encourage investment Keeping it green: New environmental initiatives Room for change: Huge expansion and demand Interview: Muktar Widjaja, Chairman, Sinarmas Land Interview: Trihatma K Haliman, President Director and CEO, Agung Podomoro Land Without further delay: A new land acquisition bill will speed up much-needed development Outside looking in: Reforms to laws could see foreign investment bolster the economy Sharing the wealth: Expansion and growth is taking hold throughout the archipelago On the market: Several developers are listed on the Indonesia Stock Exchange TRANSPORT & LOGISTICS Stepping up to the task: The government speeds up development of connections Rise in the skies: Increasing airport capacity Liberalised but protected: Shipping law welcomes private sector participation Interview: Emirsyah Satar, President & CEO, Garuda Indonesia Interview: Shanti L Poesposoetjipto, Chairman, Samudera Indonesia Group Greater connectivity: Building partnerships for increased infrastructure development Easing congestion: Getting traffic moving On the move: Addressing bottlenecks Charting a safe course: Domestic fleets work to meet rising demand Back on track: A dramatic rail overhaul planned TELECOMS & IT A time of change: Thin markets see hope in a future of sophisticated data services Sharing resources: A maturing wireless sector prompts competitors to share towers Interview: Rinaldi Firmansyah, President Director, Telkom The big three: A battle for subscribers Roundtable: Erik Aas, President Director & CEO, Axis; Hary Sasongko, President Director, Indosat; Sarwato Atmosutarno, President Director, Telkomsel; and Hasnul Suhaimi, President Director, XL Getting connected: The challenges are many, but so are the potential rewards Enter the net: More access in the archipelago PLANTATIONS & AGRICULTURE Preparing for the harvest: The government is creating growth zones and enhancing rules The day’s catch: Aiming to become the world’s largest fisheries producer Interview: Franky Widjaja, Vice-Chairman for Agribusiness, Food and Livestock, Indonesian Chamber of Commerce and Industry The sweet spot: Sector players are looking to capitalise on expected production boosts TOURISM Focused approach: Visitor numbers rise Business destination: Expanding the quantity and range of MICE facilities Interview: I Made Mangku Pastika, Governor of Bali Beyond Bali: Encouraging visits further afield EDUCATION & HEALTH A system test: Funding and regulation are set to be overhauled with a range of reforms Interview: Ir Ciputra, Founder and Chairman, Ciputra Group Forging connections: New international student exchange programmes and partnerships Striking a healthy balance: Growing demand and changing profiles are driving a new approach Pharmaceuticals in play: The country is an increasingly attractive market for drugs firms Interview: Dr Endang Rahayu Sedyaningsih, Minister of Health RELIGIOUS AFFAIRS Politics of faith: Finding a place for religion in a democratic, harmonious and responsible society Interview: Suryadharma Ali, Minister of Religious Affairs Growing market: Sharia-compliant finance shows strong potential MEDIA Breaking news: Growing opportunities for domestic and international media investors The bigger picture: Cinema and television are both expected to see increased demand Online, but switched on?: The country has rich potential for highly profitable online marketing REGIONS Local governance: Decentralisation has presented both challenges and opportunities Viewpoint: Satish Mishra, Managing Director, Strategic Asia A star performer: South Sumatra receives recognition for its strong potential And the winner is…: Regional Champions stand apart with their economic development TAX PricewaterhouseCoopers Reshaping the environment: An overview of the tax system and regulations for investors Collaborating for success: Regulatory reforms accelerate private sector participation in infrastructure development Viewpoint: Irhoan Tanudiredja, Senior Partner, PricewaterhouseCoopers LEGAL FRAMEWORK Lubis Santosa & Maramis The costs they cause: The government enacts new rules on cost recovery Laws and regulations: An overview of the current legal environment in Indonesia Viewpoint: Todung Mulya Lubis, Senior Partner, Lubis Santosa & Maramis THE GUIDE Waking up to tourism: Aceh’s many wonders Hotels: A home on the islands Listings: Important numbers Facts for visitors: Useful information