With the objective of hoisting trade between Tunisia and Indonesia through the development of Tunisian exports to this country and neighboring countries, and in order to establish strategic partnerships between Tunisian and Indonesian businessmen, the CEPEX organized, in collaboration with the Embassy of the Republic of Indonesia in Tunis, an information day – in English language – entitled “Doing Business with Indonesia” online on Tuesday December 08, 2020, under the patronage of the President Director General of CEPEX and SE, Ambassador of Indonesia in Tunis.
Business opportunities in Indonesia
Business opportunities in Indonesia are aplenty but it’s important to first understand how things are done there in order to succeed. Indonesia is the fourth most populous country in the world, with a population of almost 250 million.
So, what does an SME need to know about conducting business in Indonesia?
Import Duties: A company importing goods into the country will need an Importer Identification Number from the Ministry of Trade or the Investment Coordinating Board. Most products will attract an import duty of up to 15 percent. Certain products (such as textiles, shoes, electronic goods) need a special import license from the Ministry of Trade.
Indonesia the future economic giant
Indonesia is seen as a future economic giant. It is the largest economy in Southeast Asia and the world’s seventh. The key drivers of the economy are private domestic consumption – stimulated by its huge market with a growing middle class of nearly 70 million people (55% of GDP), while the major issues are the ongoing trade tensions between China and the US, the country’s two biggest trading partners, and the prolonged depreciation of the Rupiah. According to the updated IMF forecasts from 14th April 2020, due to the outbreak of the COVID-19, GDP growth is expected to fall to 0.5% in 2020 and pick up to 8.2%, subject to the post-pandemic global economy recovery.
Main Sectors
Indonesia is a market economy with abundant natural resources, a young, large and burgeoning population (266.9 million), a labor force of 133.4 million people, and political stability. The country changed from being an economy that was highly dependent on agriculture into a more balanced economy which is lessening its traditional dependency on primary exports.
The agricultural sector contributes to 12.7% of the country’s GDP and employs 27.7% of the active population. Indonesia is the second-largest rubber producer in the world. Other major crops include rice, sugarcane, coffee, tea, tobacco, palm oil, coconuts and spices.
Besides, the country is the world’s biggest nickel ore producer and has become a major exporter of stainless steel. Indonesian land area used for agriculture has been growing, and is currently around 30%. This is mainly due to the establishment of large-scale plantations – in particular for palm oil production (second-largest export).
Industry contributes approximately to 38.9% of GDP and employs 22.7% of the labour force. The industrial sector includes manufacturing of textiles, cement, chemical fertilisers, electronic products, rubber tyres, clothing and shoes (most of these are for the American market). Wood processing is also a major activity as the country is one of the world’s largest timber producers. The implementation of the Indonesian-EU Forest Law Enforcement, Governance and Trade (FLEGT) to combat illegal logging is making progress and Indonesia has become the first country in the world to receive an exemption from screening to ensure its timber is sourced in accordance with EU regulations. 3 million hectares of Indonesian forests are certified, and 2.2 million hectares among then are natural production forest concession.
The service sector (financial institutions, transportation and communications) contributes to 44.2% of the GDP and employs about 49.6% of the active population. The banking sector is well developed and the Islamic bank Syaria has expanded rapidly in recent years. Tourism is a major source of revenue, although the sector has suffered from terrorist threats and natural catastrophes in the past few years. From January to October 2019, the country received 13.6 million visitors, an increase of 4.6% compared to the same period of 2018 (Ministry of Tourism data). The government expects to become a leading Asian and World tourism destination by 2045 with 73 million tourists.
We hope to take advantage of the country’s strategic location between Asia and the Pacific in the current unfavorable international context (weakening demand from China and falling commodity prices), and aims to be in the top six largest economies by 2030.
