Investing in Indonesia:

Transcription

invest in
INDONESIAN EMBASSY
IN WARSAW
Supporting SME’s in South East Asia markets
Seminar Warsaw, 24 April 2014
Investing in Indonesia:
Opportunities for Growth
EMBASSY OF THE REPUBLIC OF INDONESIA IN WARSAW
MASAGUS SALMAN ISFAHANI
Head of Economic Section
© 2013 by Indonesia Investment Coordinating Board. All rights reserved
4th
World’s Most
Populous Country
248
17,508 islands
million
Population (in 2013)
Biggest Archipelagic Nation
IND
16
NESIA
th
1
World’s Largest Economy
trillion
USD GDP (PPP)
4,876
USD GDP
per capita (PPP)
Member State
G20
“Investment
Grade” (Moody’s, Fitch and R&I)
The Investment Coordinating Board of the Republic of Indonesia
2
3 000
5.8%
2 500
2 000
GDP Growth
in 2013
1 500
1 000
Indonesia’s GDP
In the last 10 years
500
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
-
at 2000 Constant Market Prices
by Expenditure 2004-2013
(IDR Trillion)
2nd fastest
Growing Economy
Among G-20 Countries
(After China, in 2013)
“Indonesia’s Growth
Beats Estimates…”
Indonesia’s GDP growth in 2013 beats all
estimates in a Bloomberg News survey of
25 economists, where the median was
5.34 percent.
(Bloomberg, 2014)
3
3
rd
Unity in Diversity
248 million population
300 ethnic groups
700 languages
various faiths
17,508 islands
World’s biggest
democracy
(after India and US)
The highest
Direct Election
The third National Elections
will be held in 2014 after peaceful
elections in 2004 and 2009.
democracy Index in ASEAN
Indonesia scored 6.76, higher
than average in Asia (5.56) and
in Latin America (6.36).
(The Economist, 2013)
4
The 3rd Investment
Destination in Asia
(The Economist, 2013)
33.9
Vietnam
37.7
32.8
25.2
3.3
Singapore
34.8
26.2
0.7
10.6
53.9
3.1
South Korea
Philippines
Australia
Japan
Hong Kong
Taiwan
28.9
46.1
21.9
0.8
28.1
45.5
25.6
5.6
27.0
47.6
19.8
3.1
26.2
55.4
15.4
1.5
21.4
58.8
18.3
3.2
15.2
51.2
(Bloomberg, 2013)
32%
2013
38.6
2012
Thailand
Total Investment (% GDP)
2011
2.4
55
50
45
40
35
30
25
20
15
10
2010
16.3
2009
38.5
2008
43.0
2007
2.2
Malaysia
2006
27.1 0.8 18.6
2005
53.5
13.9
2004
Indonesia
32.0
2003
54.1
Growing Investment’s
Share to Total GDP
2002
India
0.7
5.0
20.6
2001
73.8
2000
China
30.4
Investors’ Plan in Asia (%)
Increase their level of investment
Still in the market, but will not invest more
Reduce their investment
Have no plans to invest
Brazil
China
India
Indonesia
Korea
Russia
5
55% of FDI flowed to
secondary sectors,
6 000
5 000
mining got the biggest share
4 000
3 000
FDI Realization in Indonesia by Sector
2 000
Top-10 Sectors Based on Capital Expenditure 1 000
(USD million) in 2013
Excl. oil, gas, and financial sectors
2009
Component of FDI Realization
Based on Group of Sectors in 2013
40%
60%
4%
2009
22%
61%
35%
35%
28%
48%
55%
21%
19%
25%
24%
23%
2010
2011
2012
2013
Primary Sectors
Secondary Sectors
Tertiary Sectors
Rank
Sector
2009
2010
2011
2012
2013
2010
2011
2012
2013
1
Mining
333
2,201
3,619
4,255
4,816
2
Transport Equipment Industry
583
394
770
1,840
3,732
3
Metal, Machinery & Electronic Ind.
655
590
1,773
2,453
3,327
4
Chemical & Pharmaceutical Ind.
1,183
793
1,467
2,770
3,142
5
Electricity, Gas & Water Supply
349
1,429
1,865
1,515
2,222
6
Food Industry
534
1,026
1,105
1,783
2,118
7
Food Crops & Plantation
143
751
1,222
1,602
1,605
8
Transport., Storage & Telecom.
4,152
5,072
3,799
2,808
1,450
9
Paper & Printing Industry
68
46
258
1,307
1,169
10
Non Metalic Mineral Industry
20
28
137
146
874
10,817
16,215
19,475
24,565
28,616
Total (All Sectors)
Source: BKPM, 2014.
6
The most promising country for overseas business
(Japan Bank for International Cooperation Survey 2013)
Rank
2005
2006
2007
2008
2009
2010
2011
2012
2013
1
China
China
China
China
China
China
China
China
Indonesia
2
India
India
India
India
India
India
India
India
India
3
Thailand
Vietnam
Vietnam
Vietnam
Vietnam
Vietnam
Thailand
Indonesia
Thailand
4
Vietnam
Thailand
Thailand
Russia
Thailand
Thailand
Vietnam
Thailand
China
5
US
US
Russia
Thailand
Russia
Brazil
Indonesia &
Brazil
Vietnam
Vietnam
6
Russia
Russia
US
Brazil
Brazil
Indonesia
-
Brazil
Brazil
7
Korea
Brazil
Brazil
US
US
Russia
Russia
Mexico
Mexico
8
Indonesia
Korea
Indonesia
Indonesia
Indonesia
US
US
Rusia
Myanmar
9
Brazil
Indonesia
Korea
Korea
Korea
Korea
Malaysia
US
Rusia
10
Taiwan
Taiwan
Taiwan
Taiwan
Malaysia
Malaysia &
Taiwan
Taiwan
Myanmar
US
Positive Factors
1. Future growth potential of local market
2. Inexpensive source of labor
3. Current size of local market
4. Supply base for assembler
5. Industrial cluster development
Issues of Concern
1. Rising labor costs
2. Underdeveloped infrastructures
3. Execution of legal system unclear (frequent changes)
4. Intents competition with other companies
5. Difficult to secure management-level staff
6. Labor problems
Source: JBIC, November 2013
7
Top-4 Most Prospective Host Economies for 2012-2014
United Nations
Conference on Trade and
Development
Indonesia rising two places to enter the top five destinations for the first time.
(Results from UNCTAD’s World Investment Prospects Survey which polls TNC executives on their investment plans)
8
ASEAN’s Most Attractive Investment Destination
The ASEAN Business
Advisory Council
Survey on ASEAN
Competitiveness 2012
“Half of 405 businesses surveyed
intended to invest in
Indonesia over the next years
(2011-2014).”
Source: ASEAN-BAC, 2012
Notes: (1) Value next to each bar reflects the percentage of respondents that plan to invest or increase investments while value within the bar shows respondents’
average rating on the investment attractiveness of each country. (2) Each respondent was allowed to select multiple responses. Percentages do not sum up to 100%.
The 2012 ASEAN-BAC Survey on ASEAN Competitiveness collated responses from businesses across all ten ASEAN ountries, comprising a mix of small, medium and large
firms. A majority of the businesses had been in operation for more than ten years, had trade/investment linkages within ASEAN and had at least general knowledge of
ASEAN policy initiatives.
9
4
170 million
th
134
81
Covering more than
World’s Most
Populous Country
93
45
Population in
Middle Income with
per capita expenditure
per day USD 2-20
1999 2003 2009 2010 2015
Source: Bank Indonesia and
Indonesia Statistics Agency, 2012
(Projection)
39
%
total population
of South East Asia
More than
%
70
60%
Population in
working age
2015 Population (projected)
in Middle Income with
per capita expenditure
per day USD 2-20
10
110.5% 174%
Middle class growth
in Southeast Asia
2012-2020
Middle class growth
in Indonesia
2012-2020
Middle Class Growth
in ASEAN 2012-2020
The highest middle class growth &
consumer confidence index
Source: AC Nielsen, 2013.
120
Nielsen Consumer
Confidence Index
Source: AC Nielsen, 2013.
Indonesia
11
Indonesia: Consumer Economy
All consumer segments is growing, no better place to invest in!
85%
7,0%
6.1%
Ever Bought on the Internet
6,0%
68%
5,0%
3.8%
4,0%
32%
3,0%
Have a mobile phone
Have a smart phone
1,0%
2011
0,0%
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
2013
Motorcycle
2008
2009
2010
2011
2012
2013
Car
71%
82%
58%
2008
2010
2011
2012
Mar
Dec
Jun
Sep
Mar
Dec
Sep
Jun
Mar
Dec
Jun
Sep
Mar
Dec
Jun
2009
Jun
10%
4%
Sep
4%
Mar
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012
Dec
2010
Jun
2009
Sep
2008
1.7%
2,0%
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
Sep
Dec
Mar
Jun
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2013
Source: Roy Morgan, 2013
12
McKinsey: Indonesia today and in 2030
Source: McKinsey Global Institute, September 2012.
13
One of the world’s major producer
of a broad range of commodities
Source: Coordinating Ministry For Economic Affairs RI, 2011
14
Labor issues
Skilled workforce
Infrastructure & logistics
Ease of doing business
Investment climate
Global competitiveness
Incentives & facilities
15
Economic policies for improving
investment climate
Streamlining investment licensing
• BKPM simplifies business start up and licensing procedures, including
60% reduction of application forms.
Revising the “negative investment list”
17 action plans package to improve
the ease of doing business
includes…
• Starting a business
• Getting electricity
• Paying taxes and insurance
premium
• Enforcing contract
• Resolving insolvency
• Registering property
• Dealing with construction
permits
• Getting credits
• National Interest Priority: Increasing national competitiveness
• Maintaining Economic Growth
• More open, friendly, and simple and give certainty to Investors
Tax incentive for reinvestment (to be implemented soon)
• Aimed at encouraging investors to reinvest their profits.
• Tax would be reduced to approximately zero percent (MoF in Antara,
4/2/2014).
16
TAX
ALLOWANCE
(Government Regulation No.52/2011)
30
% of investment value
Reduction of corporate
net income tax for 6 years,
5% each year.
129
business segments
TAX HOLIDAY
IMPORT DUTY
FACILITY
(MoF Regulation No.130/PMK.011/2011)
(MoF Regulation No.176/PMK.011/2009)
5-10
50
years
Under certain requirements
among others: minimum amount of
investment value and workforce,
and certain project location
(especially outside Java island).
from the commencement
of commercial production.
% for a further 2 years
Reduction of income tax
after the expiration of the
tax holiday and can be
extended by MoF.
Eligible for tax
allowance, expanded
from 38 segments in
the previous regulation.
Tax relief facility, starting
Pioneer industry
1. Basic metal industries;
2. Oil refinery industries and/or basic
organic chemicals;
3. Machinery industries;
4. Industries of renewable resources;
5. Communication devices industries.
IDR
1
trillion
Machines, goods,
materials for production
2 years import duty
exemption or 4 years for
companies using locallyproduced machines (min.30%).
Industries
Which produces goods and/or
services, including:
1. Tourism and culture
2. Public transportation
3. Public health services
4. Mining
5. Construction
6. Telecommunication
7. Port
Minimum investment plan.
17
Enrollment Ratio
Skilled workforce
%
years
20
Share of state budget
dedicated to education
since 2004.
12
Top-5
Compulsory
schooling
since 2013.
Number of higher
education graduates
in 2020, covering 6%
of world’s total.
(OECD, 2012)
(Comparison between the number of
students and people at the school age)
80,0
70,0
From agrarian to
industrialized
economy
2. Higher level of
skills
1. Higher
enrollment
67.9%
60,0
50,0
50.9%
40,0
30,0
20,0
1. Great number
of employees
High school
10.8%
University
18.5%
10,0
0,0
2. Relevance &
quality
improvement
Education Facilities
35 000
• Partnership between vocational schools and companies operating
in Indonesia to produce graduates with specific skills. There are
850,000 vocational school graduates a year.
• 273 learning centers (balai latihan kerja) managed by Ministry of
Manpower are available across Indonesia.
• Establishment of “university of professions”, dedicated for the
needs of various professions, by and for the professions.
28,600
30 000
High school
25 000
20 000
13,000
15 000
10 000
5 000
• Tax incentive for companies who conduct R&D programs.
1,900
University
3,800
-
18
Roadmap of Indonesia Investment
More than 15 years
10-15 years
Development of
Big-Scale Industry
5 years
Acceleration of
Infrastructure
Development
1-2 years
Quick wins and
low hanging
fruits
Encouraging and
facilitating readyto-invest
investors
Developing soft
infrastucture
(education and
health facilities) and
hard infrastructure
(bridge, port,
etc) through PrivatePublic Partnership
Scheme
Developing big-scale
industrials through
industry cluster (e.g.
Petrochemical,
transportation means,
and national defense)
Knowledge-Based
Economy
Developing economy
by innovation and
high-technology
Source: BKPM
19
Quality Investments
Sectors Focused in BKPM’s Plan
Export-oriented
sectors: downstream
industry of palm and
rubber, electrical
equipment, metal,
paper, textile.
Industrial sectors with
increasing domestic
consumption
trend: cement and
building material
industries.
Import substitution of
capital goods and
raw materials:
machinery, iron and
steel, automotive and
spare parts, and basic
chemical.
Import substitution of
consumer goods:
food and beverages,
home appliances, and
oil refinery industries.
Downstream
industries of
mining, agriculture,
fisheries and forestry:
smelter, CPO and cocoa
industries, paper,
furniture.
Infrastructure
sector encouraged
through PPP: energy, air
and sea ports, roads,
water supply, waste
management and
railways.
Tourism and
creative industries.
20
25 high priority infrastructure projects
Ready for Ground Breaking Between 2015 and 2017 (
No.
Sumatra
= Potential for PPP)
USD Mio.
No.
Kalimantan
USD Mio.
1
Toll Road: Medan–Binjai (15.8 km)
210
1
Toll Road: Balikpapan-Samarinda (99.02 km)
1,261
2
Toll Road: Palembang–Indralaya (22 km)
180
2
Railway: Purukcahu–Bangkuang– Mangkatip (290 km)
2,277
3
Toll Road: Pekanbaru–Kandis–Dumai (135 km)
1,530
3
Coal-Fired Power Plant: Asamasam 5-6 (2x100 MW)
4
Toll Road: Bakauheni–Terbanggi Besar (150 km)
2,372
5
Toll Road: Tebing Tinggi–Kisaran–Rantau Prapat (178 km)
1,396
No.
6
Toll Road: Panimbang–Serang (83 km)
1,191
1
7
Toll Road: Lubuk Pakam–Tebing Tinggi (43.5 km)
8
Seaport: Hub Kuala Tanjung
9
Seaport: Tanjung Sauh, Batam
Total Sumatra (9 projects)
No.
Java
Bali-Nusa Tenggara
Water Supply: South Bali
2,795
No.
3,869
USD Mio.
282.2
Total Bali-NT (1 project)
708
Sulawesi
282
USD Mio.
1
Road: Palu–Parigi (37.4 km)
104
10,382
2
Toll Road: Manado–Bitung (46 km)
353
USD Mio.
3
International Hub: Bitung
71
4
Railway: Makassar–Pare-Pare (136.3 km)
211
5
Hydro Electric Power Plant: Karama (4x112.5 MW)
1,376
Total Sulawesi (5 projects)
5,662
N/A
1
Access Road: Purwakarta Industrial Area (7.8 km)
2
Water Supply: Umbulan
3
Port and Access Road: Cilamaya (30 km)
4,176
4
Airport and Access Road: Karawang
3,747
5
Railway: Madiun–Surabaya (165 km, Double Track)
430
6
Coal-Fired Power Plant: Indramayu 4 (1x1000 MW)
2,116
Total Java (6 projects)
Total Kalimantan (3 projects)
331
No.
1
3,208
Maluku-Papua
621
USD Mio.
Road: Enarotali–Tiom (240 km)
174
Total Maluku-Papua (1 project)
174
10,750
Source: Coordinating Ministry
for Economic Affairs, 2013
21
Potential Projects : tall road, energy, water supply,
solid waste & sanitation
( Potential for PPP)
No.
Sumatra
USD Mio.
No.
1
Pontianak Municipal Water Supply, West Kalimantan
2
Sukadana Water Supply, West Kalimantan
3
Development of Singawang Airport, West Kalimantan
4
Railway Tumbang Samba-Nanga Bulik Railway, Central
Kalimantan
No.
Bali-Nusa Tenggara
1
Energy: Jambi Coal Fire Steam Power Plant (2x400MW)
1,040.00
2
Energy: South Sumatra Mine Mouth HVDC Coal Fired
Steam (2x600 MW)
1,560.00
3
Development of Karya Jaya Integrated Terminal ,
Palembang, South Sumatra
134.00
4
Development of Shipping Lane Development of Belawan
47.77
No.
Java
USD Mio.
1
Solid Waste : Final Disposal and Treatment Facility- Putri
Mojosongo, Surakarta Municipal, Central Java
2
Solid waste Final Disposal and Treatment Facility –
Bogor& Depok Area, West Java
N/A
3
Water Treatment Plant of Cimahi City, West Java
4
5
30.00
Kalimantan
USD Mio.
25.00
4.32
42.03
1,858.0
USD Mio.
1
Water Supply: Metaum Water Supply, Tabanan Bali
282.2
2
Central Lombok Water Supply, West Nusa Tenggara
18.00
No.
Sulawesi
USD Mio.
1
Energy: Coal Fired Steam Power Plant (2x55MW)
3.79
2
Maros Regency Water Supply , South Sulawesi
11.50
Water supply: West Semarang City Water Supply, Central
Java
82.40
3
Imporvement of Water Supply Palu Municipal, Central
Sulawesi
13.55
Jakarta, Monorail, DKI Jakarta
475.0
No.
Maluku-Papua
1
USD Mio.
Development of Pekanbaru Cargo Terminal, Riau
165.00
140.00
Source: Coordinating Ministry
for Economic Affairs, 2013
22
Thank You
Terima Kasih
Indonesia Investment Promotion Centre (IIPC)
Badan Koordinasi
Penanaman Modal
(BKPM)
Indonesia Investment
Coordinating Board
Jln. Jend. Gatot Subroto No. 44
Jakarta 12190 - Indonesia
t . +62 21 5292 1334
f . +62 21 5264 211
e . [email protected]
www.bkpm.go.id

Investing in Indonesia:

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