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Buffeted by volatile global commodity prices and legislative uncertainty at home, Indonesia’s mineral output has fluctuated considerably in recent years. The mining sector comprised 11.24% of GDP in 2013, down slightly on 11.8% in 2012, but an improvement on the 8.94% recorded in 2004. Coal contributed $26.64bn to domestic exports in 2013, followed by copper ore at $3.38bn, nickel ore at $1.88bn and bauxite at $1.39bn. Key importers of Indonesian coal include China, India, Japan and Korea, though the expected rise in domestic consumption is also likely to affect demand and production going forward, with several new coal-fired power plants set to be built in the coming years. In spite of challenges, the country’s vast potential resource still provide substantial growth opportunities. With mineral prices expected to stabilise as emerging economies increase their demand for the country’s raw materials, domestic and foreign mining outfits should find further incentive to continue exploration and development plans, provided uncertainty around the legislative framework is addressed. This chapter contains interviews with Martiono Hadianto, President Director, Newmont Nusa Tenggara; and Arsjad Rasjid, Vice-President Director and Group CFO, Indika Energy.

The nation’s vast territorial expanse and established presence of experienced, well-financed international and domestic oil firms has led to the discovery and exploitation of a succession of sizeable oil and gas projects across the country for more than 125 years. As of 2013, Indonesia’s total hydrocarbons reserves reportedly included 3.7bn barrels of oil and 103.3trn cu ft of natural gas. In 2012, 96 new exploratory wells were drilled across the country – 55 onshore and 41 offshore – up from 81 exploratory wells drilled in 2011. Indonesia ranked fifth in the world in terms of total liquefied natural gas exports, behind Qatar, Malaysia, Australia and Nigeria. The growing shortage of domestic petrol production capacity will see Indonesia surpass the US as the world’s largest importer of petrol by 2018. Exploring and exploiting new oil and gas fields – including more expensive plays such as shale gas, deepwater and frontier resources – will be increasingly important for both exports and the growing domestic market as maturing legacy fields continue to decline in productivity. The success of these efforts relies not only on the technical capabilities of the oil and gas operators in the country, but also on the creation of a stable regulatory framework to support investor confidence. This chapter contains interviews with Karen Agustiawan, President Director, Pertamina; and Nur Pamudji, President Director, Perusahaan Listrik Negara; and an energy roundtable with Andhika Anindyaguna, CEO, Sugih Energy; Jon M Gibbs, President, ExxonMobil Indonesia; Lukman Mahfoedz, President, IPA and President Director, Medco Energi; Roberto Lorato, President Director, Premier Oil Industries Indonesia; and Hardy Pramono, President and General Manager, Total E&P Indonesia.

Rising disposable incomes, consumption growth and sustained investment are key factors in the sector’s recent continued expansion and future potential growth. While still small compared to its potential, Indonesia’s insurance market is attracting global underwriters and reinsurers. The life segment, which comprised roughly two-thirds of premiums in 2012, is the market’s key growth driver. The segment has seen annual expansion of 25.6% in the decade to 2012. The inflow of foreign direct investment into the Indonesian market, particularly from Japan, has led to a wave of mergers and acquisitions in the insurance sector that can be expected to increase competition. In January 2013, oversight of the sector was handed over to a new independent regulator, the Financial Services Authority, which will work to help institute new regulations for the market. Stricter regulations imposed under a comprehensive framework by the new regulator will bolster underwriters’ financial and technical capacity, while growing affluence, rising awareness of natural disasters, and the need for financial planning will be key drivers of long-term growth. This chapter contains an insurance dialogue between David Beynon, President Director, Tokio Marine Life Insurance Indonesia, and William Kuan, President Director, Prudential Indonesia; and interviews with Elvyn G Masassya, President Director, Social Security Agency; and Tim Shields, President Director, ACE Jaya Proteksi.

Growth in Indonesia’s stock market in recent years has been driven by the steady expansion in the total number of shares listed, which increased from 296 in 2008 to 479 by September 2013. Once dominated by commodities, such as mining, energy and agriculture stocks, the local market is now led by consumer-related shares, such as financial services, infrastructure and utilities. Domestic investors’ share of trading has steadily grown in recent years, climbing from 19% in mid-2007 to 44.2% by August 2013. Encouraging new supply is critical to the bourse’s ambitions of becoming the region’s largest exchange by capitalisation by 2015, when it hopes to reach $750bn. The number of IPOs nearly doubled from 13 in 2009 to 25 in 2012, raising a total of $1bn. Despite the challenges that have been caused by global volatility, most investors have maintained a bullish long-term outlook. Indonesia’s reliance on foreign portfolio investments to finance its current account deficit is a cause for concern. All the same, its consistent growth record, resilient corporate earnings and dynamic private sector highlight its strong prospects for expansion going forward. This chapter contains interviews with Muliaman D Hadad, Chairman, Otoritas Jasa Keuangan; and Eko Yuliantoro, CEO, Bahana Securities.

Real estate transactions in Dubai totalled $64.2bn in 2013, up sharply from $42bn in all of 2012. The residential, retail, hospitality and industrial segments all experienced solid growth. Property sales jumped by more than 20% in 2013, with serviced apartments also recording strong growth figures. Demand for Dubai property seems to be coming from all corners of the world. According to the Dubai Land Department, Indian nationals invested $2.4bn in Dubai real estate in 2012, followed by the British ($1.3bn), Pakistanis ($1.1bn), Iranians ($826m) and Russians ($640m). Regulatory changes and new loan-to-value limits for residential mortgages are being introduced to cool the market and discourage property flipping. Competition in the $1.5bn facilities management industry is set to increase as new projects come on-line. This chapter contains an interview with Sultan Butti bin Merjen, Director-General, Dubai Land Department.

Figures from Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi) show a 13% rise in 2012 over the previous year in terms of hotel guests staying in the emirate. This trend is expected to continue as a pipeline of new facilities to capture the corporate and conference markets, as well as fresh attractions to increase the capital’s appeal as a leisure destination, come on-stream. A shift in demand towards mid-tier accommodation is also a reflection of the changing composition of the emirate’s main source markets, with increases in visitors from India, China and Russia, showing much higher y-o-y volume increases than the steadier, single-digit growth from the more traditional European and North American source markets. This chapter contains interviews with Sheikh Sultan bin Zayed Al Nahyan, Representative of the President of the UAE, and Chairman, Culture and Media Centre (CMC); and Sheikh Sultan bin Tahnoon Al Nahyan, Chairman, TCA Abu Dhabi.