Embassy of the Republic of Indonesia in Pretoria

949 Francis Baard Street, Hatfield, Arcadia, Pretoria-South Africa

Indonesian Trade Promotion Centre – ITPC

Johannesburg

Structure of Presentation

• Country Overview

• Bilateral Trade Opportunity

• Investment Opportunity

1. Country Overview

What Do You Know about Indonesia?

Source: http://www.gocomics.com

Indonesia

1. 4th Most Populous Country in The World

2. Population of more than 262m People

3. 17,504 Islands

4. One of the Largest Economy in the World

5. Top Investment Destinations

6. Young Population Median Age of 29 Years Old

7. Recognition from reputable international

rattings agency

5.6%

5.0%

4.8%

5.0%

Feb-17 : Upgraded from Stable to Positive

AN INVESTMENTGRADE COUNTRY

Macroeconomic indicators have improved significantly

Latest rating and outlook

Inflation (%)

8.1%

8.4%

3.4%

3.0%

2013 2014 2015 2016

2013 2014 2015

May-17 : BBB- from BB+

Dec-17 : BBB from BBB-

Source: Statistic Indonesia

1

GDP growth (% yoy) Current Account Deficit (% toGDP)

5.1%-2.65%

-3.19% -3.09%

-2.03%

-1.80%

-1.65%

INDONESIA MACROECONOMIC PERFORMANCE IN THE PAST FEW YEARS

Trade balance (Usd bn)

3.6%

2017

2016 2017F

(4.07)(2.20)

7.67

9.42

12.02

2013 2014 2015 2016 2017

2012 2013 2014 2015 2016 3Q17

Indonesia successfully maintaining the growth momentum in 2017

2017

Gini RatioUnemployment Rate

2012 2016

2014

0.406 0.3935.94 % 5.61%

Global Competitiveness Index

Rank 50 Rank 36

2012-13 2017-18

DwellingTime

2017

<3 days

2014

6.94 days

Tanjung Priok Port

Source: BPS, BI, WorldBank,BKPM

2

Poverty Rate

2012 2016

2017

Energy Subsidy

Improvement in inequality ratio and competitivenessIndonesian Government continues to lower inequality ratio and improve competitiveness index

11.7% 10.7% 0.86%

Electrification ratio

2014 2017

81.5% 93.1%

Investment Realization

2016

612.8

2014

3.24%Ratio to GDP

2014

463.2In IDR tn

Global GrowthOver the next 3 (three) years (2017-2019), it is estimated that $75trillion global economy will expand by another $6.5 trillion in size.Here are the top-5 economies that will generate that growth (%):

Source: WEF (https://www.weforum.org/agenda/2017/10/these-countries-are-leading-the-way-on-growth)

Rank of GDP

Source: World Bank, World Development Indicators online, downloaded on January 15, 2018.

18,624

11,199

4,940

3,478

2,648

2,465

2,264

1,859

1,796

1,530

1,411

1,283

1,237

1,205

1,047

932

864

777

669

646

United States

China

Japan

Germany

United Kingdom

France

India

Italy

Brazil

Canada

Korea, Rep.

Russian Federation

Spain

Australia

Mexico

Indonesia

Turkey

Netherlands

Switzerland

Saudi Arabia

12

34

56

78

920 1

9 1

8 1

7 1

615 1

4 1

3 1

2 1

110

GDP rank 2016 (Billions of US dollars)

21,451

18,624

8,718

5,267

4,041

3,397

3,147

3,037

2,828

2,774

2,324

2,280

1,941

1,832

1,760

1,693

1,605

1,598

1,167

1,129

China

United States

India

Japan

Germany

Russian Federation

Brazil

Indonesia

United Kingdom

France

Italy

Mexico

Turkey

Korea, Rep.

Saudi Arabia

Spain

Iran, Islamic Rep.

Canada

Thailand

Australia

12

34

56

78

920 1

9 1

8 1

7 1

6 1

5 1

4 1

3 1

2 1

110

GDP rank 2016, PPP based (Billions of US dollars)

GDPGrowth(%)

Inflation(%) YoY

5,4

3,5

GasLifting(thousandBOPD)

1.200

Oil PriceUS$/barrel

Oil Lifting( thousandBOPD)

4,8

800

Exc. Rate(IDR/USD)

Int. Rate(%)

13.400

5,4

0

8

6

4

2

10

0

8

6

4

2

10

World Advanced economies Emergingmarket and developing economies Indonesia

5.40

2018p

5.07

2017p

5.03

2016

4.88

2015

5.01

2014

5.56

2013

6.03

2012

6.17

2011

6.38

2010

2018 macroeconomic i ndicators

INDONESIA ECONOMIC OUTLOOK IN 2018economic growth projected to rise higher in 2018, supported by the

continuity of growth momentum across all sectors

Fiber Optic Network (km)

76,724 81,895 86,665 88,930 99,340

35,770 44,65064,670 64,670

64,802

39,022 54,8956

112,494126,545

136,835 153,600158,840

85,420103,289

ource: Statistic Indonesia

379 400 424 440 457

128 107 90 74 57

2014 2015 2016 2017 2018

Fiber Optic Satelite

Domestic (Km) International (Km)

Number of Regency / City that are connected with fiber optic

Indonesia is also expected to have a growing digital infrastructure going forward

11

BTS numbers

78, 89 101,865128,002

46,398 48,394 50,344 50,326 50,326

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

85,946

212,275246,253

362,121

479,121

2014 2015 2016 2017 2018

HotspotWi-Fi

129,033

175,127152,191

2G 3G/4G

6.69.4

15.5 17.219.8

2014 2015 2016 2017 2018

Number Homes passed Fiber to the Home (mn)

Digital Economy Basis

30

POPULATION INTERNET

USER

SOCIAL

MEDIA

USER

MOBILE

SUBSCRIPTION

ACTIVE

HANDPHONE

USER

262.0

m

132.7

m

106.0

m

371.4

m

92.0m

Sumber: We Are Social: Digital in 2017-Southeast Asia

Population and Social Media

Population

Active users

Active users

Active users

4th

4th

4th

3rd

World rank As of

2018

April 2017

May 2016

Q4 2016

Conducive Environment Underpinning Strong Growth Fundamentals

2. Bilateral Trade Opportunity

Indonesia - South Africa Relations

• Indonesia and South Africa have been enjoyingcordial relations in the last couple of years.

• Both have signed Plan of Action 2017-2021 forthe Implementation of the Joint Declaration on aStrategic Partnership for a Peaceful andProsperous Future between the Government ofIndonesia and the Government of South Africa

• Both are are endowed with natural resourcesand have capacity to expand economiccooperation in various sectors such asinfrastructure, energy, manufacturing, andservices.

Source of cartoon : www.dreamstime.com

Indonesia – South AfricaTrade Performance

(Non-oil and Gas)

Source: Ministry of Trade of the Republic of Indonesia, 2017

In US$ millions

• Indonesia and South Africa total trade is decreasing in the last 5 years.• The highest export from Indonesia to South Africa recorded for US$ 1,650 millions in

2012.• Indonesia is having a trade surplus with South Africa for US$ 183.6 millions for Jul

2017 period.• Still a lot of room of opportunities to increase Indonesia’s export to South Africa.

2012 2013 2014 2015 2016Jan-Jul2016

Jan-Jul2017

EKSPOR 1,650.30 1,270.08 1,379.08 665.62 727.63 429.43 398.02

IMPOR 660.44 623.57 477.43 230.64 289.71 153.24 214.41

NERACA PERDAGANGAN 989.86 646.52 901.65 434.98 437.92 276.19 183.61

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

Indonesia’s Export Products to South Africa2016 period

1 Palm oil - USD 166,80 juta (24,48%)

2 Jewelry - USD 118,68 juta (17,42%)

3 Passenger Cars - USD 40,05 juta (5,88%)

4 Palm Kernel - USD 23,64 juta (3,47%)

5 Natural Rubber - USD 22,42 juta (3,29%)

Indonesia’s Import products from South Africa2016 period

1 Chemical Wood Pulp - USD 113,79 juta (41,70%)

2 Gold - USD 28,81 juta (10,56%)

3 Ferrous Waste and Scrap - USD 13,05 juta (4,78%)

4 Copper - USD 12,53 juta (4,59%)

5 Pears - USD 10,47 juta (3,84%)

Indonesian Companies Looking ForPartnership in South Africa

• Food and Beverage Industry

• Coffee Industry

• Tyre Products

• High Voltage Cable

• Automotive Spareparts

• Textile products – T-shirt

• Shoes Company

• Batik Shirt

• Cleaning products

• Spices

• Furniture

• And many others.

Indonesia is willing to participate in• Business Gathering dan Instore Promotion• Festival and Trade exhibition• Getaway Show

Save Date - Big Event :• Trade Expo Indonesia (October 2018 - Jakarta,

Indonesia)• Indonesia – Africa Forum (commencement on 10-11

April 2018 and will be organized annually in Bali Indonesia)

Source of cartoon: http://www.globaltimes.cn

FUTURE TRADE COOPERATION

During the 3rd JTC (Joint Trade Commission) both countryhave agreed to conduct a joint feasibility study in havingPreferential Trade Agreements with SACU (Botswana,Swaziland, Namibia, Lesotho, and South Africa).

Cooperation Initiatives between Indonesia and South Africato establish Indonesia - SACU (Southern Union CustomAfrican) Preferential Trade Agreement needs to be realizedto improve trade performance between the two countries.

3. Investment Opportunity

• Indonesia is open for investment for variousstream of industry

30.1

30.6

18.2

20.2

24.3

24.7

26.6

28

28.7

28.8

0 10 20 30

China

India

Indonesia

Vietnam

Singapore

Australia

HongKong

Thailand

South Korea

Japan

Philippines

Malaysia

Myanmar

Taiwan

Source: The Economist – Asia Business Outlook Survey2018

Economist: Indonesia rounds out the top five of Asian economies that can look forward to increased investment (January 2018)*

36.9

44.1

47.1

69.4

INDONESIA : INVESTMENT DESTINATION OF CHOICE

40 50 60 70 80

4Canada (18)

Australia (13)

AD: Indonesia is listed as the top 5 prospective investment destination in the world (June 2017)**

United States(1) 40

China(2) 36

India(3) 20

Indonesia(8) 11

Thailand (14) 11

Brazil(7) 9

United Kingdom(4)

7

Germany(5) 7

Mexico (7) 7

Philippines (9) 6

Spain(25) 5

Vietnam(14) 4

Singapura (18) 4

INDONESIA : INVESTMENT DESTINATION OF CHOICE

3

0 5 10 15 20 25 30 35 40 45

Source: United Nations Conference on Trade and Development (UNCTAD) – World Investment Report 2017

% of executives responding(x) = 2016 ranking

Positive Global Perception

Efforts To ImproveInvestment Climate

Institutions

Infrastructure

Macroeconomic Environment

Health and Primary

Higher Education and Training

Goods Market Efficiency

Technological Readiness

Financial Market Development

Market Size

Business Sophistication

Innovation

2015

Labour Market Efficiency

2016 2017

INDONESIAN GOVERNMENT VERY COMMITED TO CREATE STABLE AND GOOD INVESTMENT CLIMATE

Ease Of Doing Bussiness (EODB) Score Consistently Improve

Improving Investment Realizations

INFRASTRUCTURE DEVELOPMENT REMAINS FOCAL FOCUS OF THE GOVERNMENT

Development of

Subsidised Apartments

Targeted:13.405 unit

SOME GOVT

PRIORITIES FOR 2018

Road Building

Targeted: 865 km

Irigation Development

Targeted: 781 km

Electrification Ratio

Targeted: 95,15 %

%

n

2014 2016Infrastructure

5. New Road (Cumm, km) - 1.071

6. Toll Road (Cumm, km) 807 983

7. Railway double track (km) 5,434 5,647

8. Seaport non commercial (unit) 278 488

9. New Airport(unit) - 15

- 2410. DevelopmentPortsupport sea toll (unit)

ource: Halftime Evaluation of RPJMN 2015 - 2019

3Infrastructure development is aimed to enhance Nation’s competitivenessSome targets has been achieved and supported regional development

1. Generator Capacity (GW) 20.7 59.6 86.6

2. Electricity Consumption(kWh) 843 956 1,200

3. Crossing Port Development(unit) 210 322 275

4. National Road (km) 38,570 45,715 45,59

2

Soekarno Hatta Airport 3

Toll Road Surabaya-Mojokerto

Mobile Power Plan Arunin Nanggo Aceh Darusalam

Trans Papua Road

Target 2019

Completed Dec-2017 Completed Aug-2016

2,650

1,807

8,692

450

15

24

Soekarno Hatta Railway

Tapaleo Airport

Completed May 2017 -3,900 kmCompleted June 2016

Completed Jan-2017 Completed May-2017

Indonesia National Strategic Projects (PSN)

4 Priority Sectors between Indonesia and South Africa

Financial Institutions

Pharmaceutical Products

Strategic Industry

Maritime Industry

Indonesia Offers A Promising Future For Business,

Don't Wait Too Long!!!,

Do a business with or Invest In Indonesia As Soon As Possible

Indonesian Trade Promotion Centre –

ITPC Johannesburg

Forum Building, 7th Floor

2 Maude Street, Sandown

Sandton – Johannesburg

Gauteng – Republic of South Africa

Phone : +27 11 884 6240

Fax. : +27 11 884 6242

Email : itpc@itpcjohannesburg.com OR

info@itpcjohannesburg.com

Website : www.itpcjohannesburg.com

Thank You

Embassy of the Republic of Indonesia

949 Francis Baard Street, Hatfield,

Arcadia 0083,

Pretoria – Republic of South Africa

Phone : +27 123 423 350

Fax. : +27 123 423 369

Email : info@Indonesia-pretoria.org.za

Website : www.Indonesia-pretoria.org.za OR

http://pretoria.kemlu.go.id