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Indonesia - The World’s Next Economic Power

KOMITE EKONOMI NASIONAL REPUBLIK INDONESIA. Indonesia - The World’s Next Economic Power. Chairul Tanjung Chairman of National Economic Committee (KEN). July 2011. Indonesia Future Outlook Key Economic Drivers. Looking to the long term, Indonesia will become a high income country.

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Indonesia - The World’s Next Economic Power

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  1. KOMITE EKONOMI NASIONAL REPUBLIK INDONESIA Indonesia - The World’s Next Economic Power Chairul Tanjung Chairman of National Economic Committee (KEN) July 2011

  2. Indonesia Future Outlook • Key Economic Drivers

  3. Looking to the long term, Indonesia will become a high income country PREPARATION ACCELERATION CONTINUATION Indonesia becomes a high income country with GDP per capita USD 14,250-USD 15,500 GDP Nominal per capita GDP Nominal (US$ Billion) 711 1,335 2,416 4,257 6,793 9,706 12,989 16,578 Population (Million people) 237 253 269 286 302 319 336 353

  4. Indonesia’s economic growth has far surpassed the projections of the Indonesia Forum Foundation Projected GDP per capita - Indonesia Vision 2030 1992 2015 2023 Lower Middle Income Country Upper Middle Income Country High Income Country Economic Projection 2011 - 2045 Indonesia Vision 2030 GDP per capita reached US$3,005in 2010 Source: Indonesia Forum Foundation (Yayasan Indonesia Forum), team analysis

  5. IMF projects Indonesia to achieve the second fastest growth amongst the world’s 18 largest economies during 2009-2015 GPD Nominal Growth (2009 – 2015) Russia Indonesia China India Brazil South Korea Turkey USA Japan ASEAN (excl. Indonesia) Source : International Monetary Fund, World Economic Outlook Database, April 2011

  6. Indonesia’s economy will become more dominant in ASEAN and larger than several countries in Europe Indonesia Economic Growth (nominal) (USD Billion) CAGR 14.5% Indonesia’s economy as % of ASEAN-6 40% 48% 53% ASEAN (Total 11 Countries) 38% 46% 52% European Countries: Spain 50% 60% 91% 91% 105% 165% Netherlands Source: International Monetary Fund, World Economic Outlook Database, April 2011; Proyeksi Ekonomi Indonesia 2011 – 2045; Analisa Tim

  7. Indonesia Future Outlook • Key Economic Drivers

  8. The increase of the productive population will fuel stable and rapid economic growth Expected Population Pyramid (2000–2020) Male Indonesia–2000 Female Male Indonesia–2020 Female Population (in millions) Population (in millions) Total (million) 205 254 102 127 Male (million) 102 127 Female (million) Productive population (20–55 years old) 99 (48%) 132 (52%) Source: 2008 UNDP World Population Prospects

  9. Natural Resources, Infrastructure and Consumers will also drive economic growth • Economic growth, including key emerging markets driving demand • Hard commodities, e.g. metals, oil, coal, etc. • Soft commodities, e.g. rubber, palm oil, etc. Natural Resources Infrastructure • Continued development of infrastructure: transportation, energy, communications, water & waste, etc. • Consumer • Financial Services • Automotive • Retail • Tourism • etc. • (as well as supporting sectors such as industry and construction) • Based on 2010 GDP per capita (US$3,005), Indonesia has reached the critical threshold  rapid growth in consumption, discretionary and luxury spending Rise of Consumer Spending Power

  10. This economic growth is also supported by conducive national conditions Political Environment • Maturing democracy • Regional autonomy • Supportive regulations  balanced open markets • Strengthening institutions Increasingly integrated networks • Regional – improving efficiency of domestic production and distribution chains • Global – geographic position provides excellent access to India, China, Japan, etc. Resilient Financial System • Government debt and foreign reserves at healthy levels • Improving investment climate • Indonesian banks performed well during global crisis

  11. Indonesia has entered the Golden Era of economic growth  huge opportunities for businesses Projection of Indonesia’s GDP Growth in 2025 (USD Billion) 4,257 3,546 711 711 2010 2025 • Indonesian economy will grow 5-fold through 2025 • The stable government combined with strong economic growth will provide great opportunities for all businesses • Currently China already has 115 people in Fortune's list of World Billionaires, while Indonesia has only 14 people. By 2025, the number of Indonesian billionaires could surpass 115 Source: Masterplan Percepatan dan Perluasan Pembangunan Indonesia

  12. Closing • Indonesia’s is expected to continues its strong performance • This robust growth is driven by favorable demographics, strong natural resources and consumer sectors and developing infrastructure, as well as broad based geographic growth • Indonesia is moving forward to address challenges in funding, infrastructure, bureaucracy, human resources, and technology • Indonesia’s economy is projected to grow 5-fold by 2025, thereby making Indonesia the world’s next economic power

  13. Thank You Chairul Tanjung Chairman of National Economic Committee (KEN)

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