Friday, 13 November 2015

To confirm Indonesia as an Investment opportunity it is a no brainer

Facts:

  • Indonesia is a near Trillion $ economy.
  • Indonesia is South East Asia's largest economy.
  • Pesident Widodo has gone on record at the CEO conference stating all of Indonesia's infra-structure needs.  Thus throwing Indonesia open to all.
  • Indonesia has over the last 20 years relied on resources to sustain their economy.
As resources have declined in demand and therefore their value. Indonesia has to now re-orientate itself towards Infra-structure and manufacturing.
 
Finance Minister Bambang Brodjonegorohas stated that they are looking for a manufacturing base and have removed many bureaucratic requirements in order to develop such a base.  However, be aware; Indonesia have recently levied many import taxes onto finished products as well as high duties on wines, spirits imported cars etc.  In some ways this has been seen as to have protectionist tendencies. However, this has been defined as a further incentive to import raw or part built materials into Indonesia for final assembly. Perhaps such a move is a further indication as to their serious intent to maximize their available labour force. 

Incentives:
  • Tax holidays enjoyed by a few sectors have been raised from 10 years to 20 years and now open to many more areas of manufacturing.
  • Special economic zones will be established (detail to be defined) in order to enjoy many other benefits.
 Proposed:
  •  2016 Corporation tax will be reduced to 18% - 20%.  Currently levied at 25%.
  • Deregulation in the financial sectors
You have to bear in mind Indonesia is a country with some 250M inhabitants.  Most of which survive on less than a $ a day, perhaps much less. There are considered to be 40M middle class.  This is expected to grow to 110M in 10 years.

Indonesia lags far behind their neighbours in their development.  Which is again another indication as to why Indonesia is a location to grasp, it offers by far one of the best dynamics for sustainable growth.

When we talk about infra-structure you should bear in mind that Indonesia is a vast archipelago. An archipelago if it was lift off the map and placed on Europe it would stretch from London to Tehran.  This alone gives rise to a vast need for roads, ports, railway etc. 

This is just a small taste as to the opportunities that are real and they are here and now.  Of course Statura would very much like to provide services to any organization wishing to dip a toe into Indonesia.

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