Indonesia in General
Indonesia a vast archipelago comprising more than 17,000 islands of which six main islands: Sumatra, Java, Bali,Sulawesi, Kalimantan and Papua – contains a population numbering around 255 million people; a number that makes Indonesia the fourth most populous country in the world. These impressive numbers also imply that significant cultural, ethnic, religious and linguistic diversity can expected to be found within its boundaries, ranging from the daily Hindu rituals practiced on the island of Bali to the prevalence of Islamic sharia law in Aceh (Sumatra) or the semi-nomadic hunter-gatherer lifestyles of the Mentawai people.
The national language is Bahasa Indonesia. English is commonly used and understood in the big cities and across business communities.
Java is the most congested, developed and industrialised island. It is the centre of manufacturing activities, whilst Sumatra is dominated by agribusiness. East Indonesia (Kalimantan onwards) is the resources frontier.
Indonesia’s capital city is Jakarta, situated in Java. Jakarta is the headquarters of all governmental institutions, both domestic and foreign business, multinational and premium education or organisations.
Indonesia is the emerging global power house of South East Asia, accounting for nearly 50% of the GDP of the region and having its own GDP growth consistently averaging around 6%. The Economist describes Indonesia as ‘The World’s Most Stable Economy in the Last Five Years.’
Strong domestic demand and particularly private consumption are two key drivers of Indonesia’s economic growth. With around 45 million people in the consuming class.
By2030, The McKinsey Global Institute (MGI) predicts Indonesia’s urban population could reach 71% of the total population, up from the current 53%, and contribute 86% of GDP.
Most cities outside of Jakarta that have apopulation of more than 150,000 are forecasted to grow at a much faster rate (more than 6%), cities with a population between 5 to 10 million people are forecast to grow the fastest(at 9.1%).
This growing population size means that domestic consumption or demand for products will increase significantly along with people’s purchasing power due to better economic circumstances. This condition inevitably will result in the growing potential for manufacturing companies or industries to cater for this increased demand.