Indonesia
ASEANs Economic Powerhouse
Indonesia !
With a population exceeding 250 million, making it the fourth most populous country in the world
behind China, India and the US. Indonesia has a 2011 level of GDP per capita of $4,339 (in 2005
constant price purchasing power adjusted values). Irish exports to Indonesia amounted to €75.6
million in 2013. Its young population – the average age is 28 – and its rising consumer classes makes
Indonesia a market of huge potential for Irish exports. !
Of the exports which were classified the main sectors are outlined in Figure 24 below!
!
Figure 24 Ireland’s goods exports to Indonesia by goods category by main Category !
Category
Value € million
Dairy Products
13.2
Oils, Perfumes and Toiletries
12.7
Not Classified
49.7
Total*
75.6
Source: CSO 2013 Trade statistics.!
*Total is non-additive in this table as some export destinations are excluded for presentation purposes!
Imports of goods and services to Indonesia are, according to IMF forecasts, expected to grow by 52.2
per cent over the next five years, while manufacturing, agriculture and resources were amongst the
strongest growth sectors during the last five years. © Asia Matters 2014
53
Indonesia, as the economic powerhouse of ASEAN, represents a great opportunity for Irish business.
As cited earlier, McKinsey estimate that by 2030, Indonesia will become the 7th largest economy in the
world. It predicts that Indonesia will have a consumer class of 135 million people and an urban
population of 71%. In addition, McKinsey predict a $1.8 trillion market opportunity in services,
agriculture and fisheries, resources and education. As mentioned above, there are huge opportunities
for training and knowledge transfer from Ireland, as 20% of annual government spending is allotted to
education and skills development for Indonesia’s young population. With this level of spending, a
Government to Government Memorandum of Understanding between Ireland and Indonesia should
help unlock major opportunities for Ireland’s education sector. !
In addition, Ireland’s competitive advantage in aviation finance will see opportunities as Indonesia’s
aviation sector takes off. It is estimated that 229 new airports will be built in the country by 2030 and
only last year a regional carrier, Lion Air, made the largest ever order of Airbus planes with a $24
billion investment for 234 planes.!
Indonesia’s recent announcement to invest US$23 billion to upgrade broadband connectivity over the
next 5 years will open up new opportunities for Ireland’s ICT sector.!
Indonesia also plays an important role in driving economic activity across ASEAN, as the region
approaches its 2015 deadline for the ASEAN Economic Community (AEC). Jakarta is home to the
ASEAN Secretariat, a regional body with growing influence as a stakeholder in driving economic
integration and convergence across the region.!
At the EU level, Indonesia and EU have signed a comprehensive Partnership Cooperation Agreement
(PCA) which came into force in 2014 following 5 years of negotiation. The agreement ensures greater
cooperation across education, the environment, transport, health and civil society. Intensive talks
have begun on opening negotiations for an EU Indonesia FTA. Indonesia also hosts the EU supported
ASEAN IPR SME Helpdesk which provides assistance on IP protection for EU businesses in the
region. In 2014, the EU announced it will create a post for EU Ambassador for ASEAN, which will
undoubtedly improve cooperation between the two regions.!
!
!
!
!
!
!
54
© Asia Matters 2014
Indonesia Facts & Figures
US$171.8 m
Bilateral Trade with
Ireland
(2013)
GDP (PPP) 2013:
US$1.2 T
GNP per capita:
$4810
6.2% GDP growth
Exports: 26.3% GDP
The World s
Most Stable
Economy in the
last 5 years The Economist▴
1500000000
Billion US$
12
1.4b
9
9.3
0
1.2b
1000000000
7.1
6
3
10.6
4
500000000
5.3
300m
0
Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014
FDI has tripled since
Q1 2010
China
India
US
240m
Indonesia
World s 4th most populous
country
★ Population 250 m (2014)
★ Average age 28
★ Rising middle class consumers
Irish Trailblazers!
Set up in 2010, Brandtone specialises in mobile solutions, brand marketing and is
headquartered in Dublin with offices in 9 countries across the world - including China,
India and Indonesia. They create large databases of permissioned brand shoppers to
enable clients to engage with consumers via their mobiles. Working in emerging markets
with high mobile and smart phone penetration, Brandtone have expanded to Indonesia in
2013 following a deal signed with Unilever in a bid to improve their reach via mobile
marketing in key emerging markets. In terms of mobile internet access - Indonesia is the
top country in Southeast Asia for mobile internet access per user. This is breeding a
burgeoning e-commerce market that has opened opportunities for new players to enter
the market. Through its groundbreaking ‘Konnect’ mobile marketing platform, Brandtone
delivers instant insights into consumer behaviour and campaign results in the world’s
fastest growing markets.
54
© Asia Matters 2014!
!
© Asia Matters
2014
!
55