Purchase OBG Publications

Pervading nearly every level of the country’s social, geographic and economic strata, Indonesia’s agrarian roots run deep. The sector provides a livelihood for the majority of households ranging from small family subsistence plots to multinational agribusiness giants, all of whom contribute to supplying sustenance to the world’s fourth-largest population as well as growing cash crops to be shipped out to the far corners of the globe to bring in foreign currency. Perhaps the country’s best-known cash crop export, palm oil has risen to prominence over the past few decades to take on a major role in not only Indonesia, but the world’s, edible oils trade. Public and private efforts to nudge Indonesia closer to food self-sufficiency should continue to pay dividends in staples, particularly rice, which is likely to see continued rises in production with increased hectarage and more efficient farming practices. This chapter contains an interview with Susi Pudjiastuti, Minister of Maritime Affairs and Fisheries.

Since the 1930s, the unique cultural and picturesque landscape of Indonesia’s island of Bali has lured millions of visitors. But even as Bali has boomed, the delights from the rest of Indonesia’s archipelago of more than 17,000 Islands have often been overlooked. The new government of President Joko Widodo has vowed to change that. With a goal of attracting 20m visitors by 2020, it is urging tourists to travel beyond Bali and experience the country’s myriad cultures and cuisines, as well as the stunning natural beauty of its more than 54,000 km of beach and coast. While tourism is currently the fourth-largest source of foreign exchange after oil and gas, coal, and palm oil, some industry leaders predict that it could take the lead by 2018 if the government’s initiatives pay off. This chapter contains an interview with Budi Tirtawisata, CEO, Panorama Group.

Endowed with ample mineral and coal resources that have yielded some of the most productive mines in the world, Indonesia’s mining sector continues to exert substantial influence on both the domestic economy and global markets. The world’s largest coal exporter, Indonesia continues to lead the seaborne market despite several leaner years due to weaker demand and softer prices. Local demand is also projected to expand significantly through the end of the decade with a new wave of coal-fired power plants slated for construction over the next five years. The mining sector looks likely to remain in flux over the next few years as policymakers continue to hash out tough compromises in implementing evolving mining regulations. The market for mineral commodities, however, provides for ample investment opportunities in light of positive economic projections for the Asia-Pacific region. This chapter contains an interview with Garibaldi Thohir, President-Director, Adaro Energy.

Since the policy of decentralisation was enacted in 2011, the country’s central government has ceded increasing amounts of control, both budgetary and political, to its provinces. However, the island of Java and the country’s metropolitan capital, Jakarta, remain the main source of Indonesia’s economic power. As a result, efforts are being made to equalise and support growth and investment in the country’s regions and cities. As the decentralisation process has unfolded, several “second cities” have shown a particular ability to thrive in this autonomous system, namely, Surabaya, Bandung and Medan. This chapter contains an interview with M Ridwan Kamil, Mayor, Bandung.

As a major contributor to the country’s economy as well as a vital part of Indonesia’s future development, the construction sector today faces some major responsibilities and challenges. The segment has experienced continuous growth in recent years on the back of economic and population expansion, while also seeing an enlargement of its expertise and overall capability, with foreign partnerships often helping this growth in capacity. The real estate market began a period of consolidation in late 2014 that is likely to last through 2015. This slowdown in price rises has been welcomed, however, as indicative of a maturing of the sector as it heads off previous fears of overheating. Despite the slower pace overall, residential and industrial real estate continue to show healthy growth, with Jakarta also continuing to be the most active and international market. This chapter contains a dialogue with Harun Hajadi, Managing Director, Ciputra, and Ervan Adi Nugroho, President-Director, Paramount Enterprise.

2014 was a challenging year for Indonesia’s telecommunications sector, as operators faced fierce competition and market saturation, and average revenue per user (ARPU) continued to decline. The IT sector, however, showed promising growth, which is expected to continue on the back of the burgeoning data centre, cloud computing and e-commerce segments, with an increasing number of private players benefitting from a tech-savvy consumer base. Although the mobile market faces considerable challenges in adapting to shifting consumer trends, Indonesia’s solid economic fundamentals and thriving digital marketplace have created lucrative opportunities for private players of all sizes. This chapter contains interviews with Alex Sinaga, President-Director, Telekomunikasi Indonesia; and Dian Siswarini, President-Director and CEO, XL Axiata.