Bali is one of the most popular holiday destinations for Australian tourists. It’s easy to understand why. Cheap flights, short travel times, beautiful landscapes, friendly people, and the low cost of living make it an extremely desirable place to visit. However, due to the “Bali experience,” many Australians have a perception that Bali is Indonesia. Most Australians have never ventured into other parts of this vast network of islands, and only a small percentage have spent any length of time in the capital city of Jakarta.
As a tourist, this is fine—the bars and beaches of Bali are perfectly set up to ensure visitors to the island have an amazing holiday. The problem lies in translating this perception to your business mindset.
When the island of Bali informs your thinking about what Indonesia has to offer, you limit your understanding of the numerous opportunities that are available for you and your business.
The views of Indonesia as nothing more than Bali is a little like the story of the blind men and the elephant. If you have only ever touched the elephant’s tail, you will have no idea of its true size and magnificence.
Indonesia is the world’s largest archipelago. With over 17,500 islands and a population of over 250 million people, Indonesia is the fourth most populous country in the world.
According to the World Bank, of the 250+ million consumers, one in every five Indonesians, or around 52 million people, are considered to be middle class. Think about it. That’s twice the entire population of Australia!
Due to Indonesia’s increasing wealth and expanding population, this middle class is projected to grow. The result of this will be a continuing growth in economic prosperity and a reduction of poverty in Indonesia.
It should also be noted that around 60% of the population are below the age of 40. And, approximately 50% of the population (~ 125 million people) represent Indonesia’s labour force.
In terms of Indonesia’s growing economy, Indonesia has consistently delivered a GDP growth of 5% pa every year since 2008 and has a purchasing power ranked 10th in the world. Indonesia is also a member of the G20 and an economic giant with the ASEAN group of countries. It is projected that Indonesia will become the 4th largest economy in the world by 2050.
Indonesia has a reputation as a difficult place to do business. There are a number of factors that have fuelled this perception. These include government red tape, a protectionist trade policy, restrictions for foreign investment in certain sectors, legislative & regulatory uncertainty, and pockets of corruption.
It is easy to see why Australian businesses might think twice before expanding into the region. Historically, there is some justification for taking the view that there are difficulties when it comes to doing business in Indonesia. Over the last four years, though, things have changed dramatically in the Indonesian marketplace.
The result is that it is now a much-improved business environment to a politically stable and vibrant economy with reduced layers of Government regulation, eased import & export restrictions, and an extensive investment in public infrastructure.
Most of Indonesia’s population live on one of the five main islands, which are Java, Sumatra, Kalimantan, Sulawesi, and Papua. As you can see, Bali doesn’t even make the top five!
The variety that you can discover within Indonesia is almost as multitudinous as the islands themselves. Here are just a few of the many attractions throughout the archipelago that will appeal to Australian businesses.
Jakarta is a bustling business district and the main financial centre for Indonesia, with all the amenities you would expect from a modern city. Indonesia is not just pretty countryside and beautiful beaches. Once you know your way around Jakarta, it can be an amazingly fun and rewarding city to live and work in.
The province of Kalimantan on the island of Borneo is rich in resources and therefore dominated by the oil & gas and mining industries, and so there are many oil and mining companies based in the city of Balikpapan, on the island of Borneo.
The recent Indonesian tsunami has caused devastation on the island of Sulawesi, particularly in the city of Palu. This means that there is a need to rebuild, and Australian businesses can play a critical role in this process, particularly in terms of supplying heavy plant equipment. The benefits to both the locals and to the Australian companies are extensive.
Manado in North Sulawesi has a population of around 700,000, and is the most beautiful place in the whole of Indonesia. The surrounding mountainous landscapes and views out across the crystal clear, sapphire blue waters are stunning. The island does attract divers but is not widely visited by tourists.
There are also gold mines in North Sulawesi, near Manado, creating a number of interesting business opportunities. The people are of Portuguese heritage and are predominantly Christian in a country with an overall Muslim majority, which brings a very different flavour to the culture.
In North Sumatra, the Aceh people are regarded as being tougher than most other Indonesians, as opposed to the Javanese, who are viewed as being particularly gentle. If you want to have a strong operations person on the ground, someone from Aceh will rule the factory floor with an iron fist, whereas if you want someone heading up customer relations, a Javanese would be the ideal candidate to fulfil the role.
As you can see, Indonesia is a rich and varied tapestry with offerings to suit many different requirements, and the greater the knowledge you have of the different aspects of the country, the easier it is to ensure your requirements are met.
Want to read more? – The Danna Langkawi