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Business and Market Overview of IndonesiaECONOMY. Indonesia is a market-based economy but the government plays a significant role in the country's economy with 160 government-owned enterprises. Indonesia's GDP per capita ranks fifth after Singapore, Brunei, Malaysia and Thailand. The Asian economic crisis of 1997 adversely affected the country economy and businesses and caused spiralling prices of necessities resulting in social unrest. Future prospects of Indonesia's economy are bright with economic structural reforms in placed since the Asian economic crisis. DEMOGRAPHY. Indonesia comprises nearly 18,000 islands and has the largest population among the Southeast Asian countries with 217 million people in 2004. Main islands are Java accounting for 55% of the population followed by Sumatra (18%), Kalimatan (5%) and Sulawesi (6%). Other less populated islands include Irian Jaya, Bali and Nusa Tenggara. INFRASTRUCTURE. Indonesia's domestic telecommunication system is generally fair while its international services can be categorised as good. Internet broadband services are mainly concentrated in the major cities. Road systems are more developed on Indonesia's populated island of Java, fairly developed in Sumatra and Sulawesi but poorly developed on the island of Kalimantan. Besides sea ports serving the international shipping lines, Indonesia are also served by smaller sea ports serving coastal shipping. All the cities and major towns are connected by airline services. INTERNATIONAL TRADE. Indonesia's major trading partners include Japan, US, Singapore, South Korea and China. Much of the imports from Singapore are Singapore's re-exports from other countries and exports to Singapore are re-exported to other countries. Main exports from Indonesia include oil and gas, electrical appliances, plywood, textiles and rubber products. Main imports include machineries and equipments, transport equipments, chemicals, fuels and foods. CONSUMER USAGE OF TECHNOLOGY. Mobile phone penetration is just 13% of the populations, which is lower than Singapore (93%), Malaysia (67%) and Thailand (45%). Furthermore, there are only 10 million fixed-line telephones serving the whole country. The penetration of computers is less than 2% of the households and the country has only 1.2 million internet subscribers with an estimated 12 million internet users i.e. a penetration of only 0.5% of the population. Most middle and high-income homes would own televisions but the penetration in lower income homes is lower. Thus the household penetration of television in Java is nearly 60% and in Sumatra 52%. Similar scenario exists for refrigerators. RETAIL MARKET. Retail sales of food and non-food items totalled an estimated US$32 billion in 2004. Many Indonesians still shop at the traditional markets or "mom and pop" establishments but shopping at modern shopping malls, hypermarkets, supermarkets, mini-markets and supermarkets is increasingly popular. There are nearly 5,000 such modern establishments in Indonesia accounting US$4.5 billion in retail sales in 2004. Most of these establishments are concentrated on the island of Java followed by Sumatra. Since 1998, the government opened the retail industry to foreign investments and participation. FOOD CULTURE. Indonesia's food culture is diverse because of the various ethnic and sub-ethnic communities that comprise the country's population. Typical meals eaten are rice-based dishes and occasionally noodles. However, there are many western franchise fast food outlets located mainly in the major cities such as Jakarta, Surabaya, Bandung, Semarang and Yogyakarta. Mid to high-end bakery outlets serving western and local bakeries are also found in the major cities.
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Article Source: http://www.articlesbase.com/business-opportunities-articles/business-and-market-overview-of-indonesia-39090.html About the Author:
Khal Mastan is a Senior Consultant with Pegasus Business and Market Advisory (http://bma.pegasus-asia.com) based in Malaysia. He involves himself in business and marketing research and provides consulting services on markets in Southeast Asia namely Malaysia, Thailand, Singapore, Indonesia, Philippines and Brunei. He has more than 20 years experience in the region and work experience in various industries. He holds a bachelors degree in Biochemistry and an MBA. He can be contacted at khalzuri@pegasus-asia.com or +6 (03) 7726 5373 in Malaysia.
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