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SERVICE INDUSTRY IN INDONESIA

SERVICE INDUSTRY IN INDONESIA. Romi Prasetio & Kenedi Nababan - Indonesia. Discussion Coverage. Composition of Service Sector in Indonesia Growth of Service Sector Contribution to GDP Contribution to National Vacations Problems & Prospect Government Policies.

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SERVICE INDUSTRY IN INDONESIA

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  1. SERVICE INDUSTRY IN INDONESIA Romi Prasetio & Kenedi Nababan - Indonesia

  2. Discussion Coverage Composition of Service Sector in Indonesia Growth of Service Sector Contribution to GDP Contribution to National Vacations Problems & Prospect Government Policies

  3. 1. Composition of Service Sector in Indonesia : 1. Construction ►Highways, Main Streets, Bridges, Public Service 2.Transportation & Communication ►Railways transport, Road transport, Sea transport, River & Lake transport, Air transport. ►fixed Line & Cellular Finance ►Bank, Non-Bank Financial Institution, services allied financial institution. Tourism ►Trade, Hotel & Restaurant 6. Social & Private Services ►Hospital, GAD, Amusement & Household Services

  4. 2. Growth of Service Sector* Major driver of service sector growth : Transportation & Communication (13%-14% pa) Other Sector : Construction (7%-9.3% pa) Tourism (7%-8% pa) Financing (6%-7% pa) Social & Private Service (5%-6% pa)

  5. 3. Contribution to GDP* Tourism (16-17%) Social & Private Services (9%) Financing & Business Service (8-9%) Transportation & Communication (5-7%) Construction (5-6%)

  6. 4. Contribution to National Vocations* Tourism (20-22%) Social & Private Service (11-12%) Transportation & Communication (5-6%) Construction (4-5%) Financing & Business Service (1-1.5%)

  7. 5. Problems & Prospects Problems : High Corruption Rate Bureaucracy Unbalance development between west & east Indonesia Moral Hazard Infrastructure is poor and the cause for high transaction costs, making the country less competitive Prospects : Indonesia is a wide country, especially for developing east Indonesia for all sector of service industry

  8. 6. Government Policies - FDI - Regional Autonomy - Appoint specifically ministry for East Indonesia development (since 1999) - Agree and giving countenance to ASEAN Mutual Recognition Arrangement on Engineering (2005)

  9. 6. Government Policies - Transparency in the implementation of bank restructuring and in the management of problem bank assets (GCG & KYC) LPS Established (National third party funds guarantee institution), for increase the public trusty after crisis (1997-1998)

  10. Government Policies - Since 2004 Indonesia has to abolish tariffs on a number of sectors, including rubber, electronics, textiles, air travel, fisheries and wood

  11. Conclusion - Major driver of service sector growth : Transportation & Communication - Contribution to GDP and National Vocations : Tourism Indonesia is in need of structural reforms improving the country’s business climate and infrastructure

  12. Thank You

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