Venture to Indonesia with IE Singapore
Largest Consumer Base in Southeast Asia
Indonesia is home to 250 million people and is the world’s fourth most populous country. Its young demographic profile, growing middle class and rising income levels have led to strong demand for consumer goods and services.
This demand is further fuelled by increasing urbanisation. New jobs have been created and labour productivity is rising, increasing the country’s per capita income and spurring economic growth.
Steady and Resilient Growth
In 2013, Indonesia achieved a GDP growth of 5.8% despite a weak global economic climate. 14 years after the financial crisis, it has also regained the investment grade status (assigned by Fitch and Moody’s); FDI reached US$28.6 billion in 2013.
Backed by strong expansion in private consumption and private-sector investment, Indonesia is expected to register a yearly average real GDP growth of 6.1%* from 2015 to 2019.
* Source: EIU
Booming Infrastructure Needs
The new administration has identified US$52 billion worth of Public-Private-Partnership (PPP) infrastructure projects across various sectors including power, water and logistics (ports, roads and rails)*. This offers a great opportunity for Singapore companies to partner Indonesian companies to bid for these projects.
* Source: Jakarta Globe, Nov 2014
Going beyond the capital city of Jakarta
Bilateral trade between both nations remained warm through the years. Singapore has been the top three foreign investors in Indonesia for the past few years, while Indonesia is the second largest trading partner for Singapore amongst ASEAN member countries. As Indonesia continues to attract investment globally, Singapore companies can tap into growing opportunities in sectors such as infrastructure, utilities and consumer goods and services.
In addition, Singapore companies should also look beyond the opportunities in the capital city of Jakarta. Surabaya is Indonesia’s second largest city and the capital of East Java province. It is rich in human resources and the second most populous city in Indonesia (after Jakarta), with the population growing at 0.63% yearly. As the capital of East Java province, Surabaya has better supporting infrastructure than most other cities in East Java. The city is well connected by land, air and sea transport infrastructure to serve local, regional and international trips. In 2015, the total realised investment (foreign direct and domestic investment) was 28.54 trillion Rupiah (USD 2.9 billion), of which 97% (828.4 billion Rupiah) was from domestic investments. In terms of sectors, wholesale trade (excluding cars and motorcycles), as well as warehouse & transportation support services are the most common type of businesses for both foreign investors and domestic investors in Surabaya.
Learn more about Surabaya City here.