Indonesia at a Glance
Indonesia with its approximately 250 million people is the greatest archipelagic state in the world and home to the world’s largest Muslim population. Christians and Hindus are the biggest minority groups. However one should still behave in a polite way and respect the culture. Indonesia has a rather heterogeneous demographic profile Javanese and Sundanese being the biggest ethnic groups.
The official language of the country is Bahasa Indonesia but English is widely spoken in big cities, especially among people below 30. Bahasa Indonesia is often listed as one of the easiest languages for foreigners to learn. Indonesians can be described as a very friendly and welcoming people with polite curiosity towards foreigners. They would appreciate a lot if you make even a small effort to speak their language.
Indonesia is also one of the most fastest growing economies in the world - of the G-20 countries only China has more rapid growth. Indonesia is also listed as one of the Next 11 countries with great future economic potential. Numerous famous economists are positive this is “Asian century” – the number of millionaires is growing faster in Asia than in any other continent.
Between 2008 and 2009 the world was hit by the most serious financial crisis since The Great Depression. The crisis with its roots in the U.S. subprime lending escalated overnight in September 15, 2008 when a big, traditional U.S. investment bank filed for bankruptcy protection bringing global capital markets to an almost complete halt. This resulted in serious economic decline in most countries, especially in the USA and Europe. However Indonesia amazingly escaped the financial crisis posting positive growth even in 2009. Thanks to large domestic market most Indonesian companies did not suffer serious damage even during the darkest hours of the financial crisis.
The government has made significant economic advances under the administration of the current presidency. There is a fast-paced ongoing process of modernizing the economy - massive projects are underway to enhance infrastructure, remaining barriers to economic growth are being removed and the percentage of people below poverty-line is decreasing steadily.
Thanks to numerous reforms it is nowadays a lot easier to do business in Indonesia. There is still some corruption but it has been decreasing in recent years. However, typically for emerging economies, politics and economy are closely linked. Being well-connected and having a local partner is often crucial for operating successfully in Indonesia.
Most economists agree on Indonesia being on a long-term economic growth path. The lack of adequate infrastructure and relatively low education level are the biggest challenges at the moment. Indonesia spends less than 3% of the GDP on education whereas in Malaysia the percentage is 4%, Germany is 4.5%, and in USA the percentage is closer to 10. Despite the challenges economic potential is huge. Indonesia's enormous natural resources, demographic structure and rapidly expanding middle-class make the country highly encouraging for foreign companies to invest in. Foreign direct investments reached an all-time high just recently. Capital is flowing into to Indonesia accelerating growth even more in the near future.
Despite a lucrative domestic market many Indonesian companies have been successfully expanding abroad, particularly in Asia but also in the USA and Europe.
The central bank has been targeting inflation with success during the past couple of years – the current inflation rate is down to well-acceptable 5% from 10% previously. This is crucial for long-term economic growth. Indonesian banks are just one example of a highly profitable field in Indonesia – making the biggest profits than anywhere else in the world! Historically the biggest risk for doing business in Indonesia has been politics but the situation is currently very stable. Political risk is lower than in most emerging countries. There is no reason to believe the situation would become worse.
Traffic jams are still common especially in Jakarta but the government is doing its best tackling this problem. In Malang traffic goes smooth; in general scooters being the most popular way to move from place to place.
Health & Safety
In general it is safe to drink and eat in Indonesia. However in remote rural areas one should pay extra attention when choosing the place where to eat or drink. Malaria is found in some parts of the country. In Malang the risk is however extremely small. Consult a doctor for relevant up-to-date information. There is Dengue fever and Cholera in Indonesia – make necessary precautions to be sure you have the best possible protection. Mild stomach problems sometimes happen at the beginning of your stay. Be careful if you are out late, and if possible do not walk solo. Taxis are normally safe to use. Malang is probably a safer city than the capital Jakarta or other big cities. Ma Chung is located in a very nice and safe area.