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Allgemeine Informationen
Adressen
Economy Report Adressen:
Website Embassy of Indonesia in Germany
Website for Investors: www.bkpm.go.id
Apsec Website: www.apecsec.org.sg
Indonesien Site der Apsec: www.apecsec.org.sg/member/memberecreport/brunei.html Board of Investment
Deputy Chairman Mr. Risaldi Kasri
JL. Jend.Gatot Subroto No. 44, Jakarta 12190, Indonesia
Tel.: 6221-525-0679, Fax: 6221-525-4945 Ministry of Foreign Affairs
JL. Pejambon No. 6, Jakarta, Indonesia
Tel.: 6221-350-9056 Bureau of Development of Market Product
Pt. Pupuk Kalimantan Timur, Bontang Utara, Kalimantan Timur Province, Indonesia
Tel.: 61-548-41202-04, Fax: 61-548-41616 or 41626 Fraunhofer Liaison Office Indonesien
Dr.-Ing. Ida-Bagus Kesawa Narayana
German Centre Suite 6020/6030
BSD, Jl. Kapt. Subijanto Dj.
Tangerang, 15 321, Indonesia
Tel. +62-21-537 6212, Fax: +62-21-537 6214
e-mail:
narayana@fhgindo.germancentre.co.id Allgemeine Informationen zu Indonesien
Staatsform Präsidiale Republik (seit 1945)
Staat mit mehr als 13.000 Inseln zw. Hinterindien u. Australien
Fläche: 1.904.569·km2
Einwohner (1998): 216.11·Mio
Bev.-dichte 102 pro·km²
Kennzeichen RI
Hauptstadt: Jakarta
Sprache:
Amtssprache Bahasa Indonesia, Englisch, Niederländisch und ca. 250 Regionalsprachen
Religion (2000): überw. sunnit. Islam, 87%·Moslems, Protestant 6%, Roman Catholic 3%, Hindu 2%, Buddhist 1%, other 1%
Ethnische Gr.: Javanese 45%, Sundanese 14%, Madurese 7,5%, coastal Malays 7,5%, other 26%
Währung: Rupiah (Rp.), (2000:) 1 US $ = 7,300 rupiah
Mitglied: ASEAN, OPEC, UNO
Uhrzeit
MEZ +6
Major Export Products: Manufactured goods, petroleum, natural gas and related products, foodstuffs, raw materials
Merchandise exports (1998): 55.0 billion US $
Major import products: capital equipment, raw and intermediate materials, consumer goods, petroleum products
Merchandise imports (1998): 29.3 billion US $
Major trading partners: Japan, U.S.A., Singapore, HongKong, Britain, Australia
Total external debt (1998): 145.8 billion US $Staatsform:
präsidiale Republik seit 1945 (Unabhängigkeitsproklamation am 17. August 1945 und formale Unabhängigkeit von den Niederlanden am 27. Dezember 1949), Einkammerparlament. Naturraum:
umfaßt den Großteil des·Malaiischen Archipels·mit Großen u. Kleinen Sundainseln u. dem W-Teil von Neuguinea; bedeutendste Inseln: Sumatra, Java, Borneo (außer dem N), Celebes, Bali, Timor,·Molukken; überw. gebirgig u. vulkanreich; feuchtheißes Tropenklima, verbreitet immergrüner Regenwald, örtl. Sumpfvegetation.
Bev.: Indonesier (Jung- u. Altmalaien), auf Neuguinea Papua; 4·Mio. Chinesen; kulturelle Vielfalt. Der Großteil der Bev. lebt auf Java. Wirtsch.: Anbau von Reis,·Mais,·Maniok, Zuckerrohr, Tee, Kaffee,
Tabak, Sojabohnen, Gewürzen, Öl- u. Kokospalmen; Kautschukgewinnung; Viehzucht, Fischerei; Holzeinschlag; Bodenschätze: Erdöl, Erdgas, Kohle, Bauxit, Buntmetallerze; Verarbeitungsind.; bed. Häfen: Jakarta, Surabaya.
Gesch.: ab 15. Jh. Islamisierung; 16. Jh. portug. u. span. Einfluß; 1602-1800 Niederl.-Ostind. Kompanie, ab 1818 niederl. Kolonie; 1945 einseitige Unabhängigkeitserklärung, 1949 (Konferenz von Den Haag) volle
Souveränität, 1950 Umwandlung in einen Einheitsstaat unter Staatspräs. A. Sukarno (bis 1967); 1963 W-Neuguinea als Irian Jaya zu I.; 1963-66 indones.-malays. Konflikt; 1976 Eingliederung von Osttimor (Loro Sae).
ECONOMY REPORT - INDONESIA
Quotation: www.apecsec.org.sg
For more details please see www.apecsec.org.sg/member/memberecreport/ind.html REAL GROSS DOMESTIC PRODUCT
After falling by 13.01 percent in 1998, the economy showed signs of recovery
beginning in the second quarter of 1999 when real GDP grew by 3.7 percent
(year-on-year), followed by 1.18 percent in the third quarter. In the fourth
quarter, real GDP grew by 5.01 percent, and for the year as a whole, GDP grew
by 0.31 percent. The positive growth in 1999 was mainly attributable to private
consumption while investment and export and import activities, despite their
negative growth, showed an improving trend.
The economic turnaround from deep recession to modest growth has been
produced largely by manufacturing, agriculture and public utilities. This growth
reflected the consumption-led nature of the recovery. In contrast, the financial
sector continued to be in recession, as reflected by its underlying structural and
insolvency problems.
The quarterly GDP growth continues to be positive as shown by its 3.60 percent
growth (year-on-year) in the first quarter of 2000. It then grew further to 4.13
percent (year-on-year) in the second quarter. The main source of growth again
came from domestic demand and better export and investment performance.
However, consumption growth in the second quarter was slower than in the
previous quarter. The Bank Indonesia’s consumer survey showed that the
second quarter consumer confidence index was lower than that of the previous
quarter.
Investment activities have shown a moderate improvement, especially since
the fourth quarter of 1999. Private/business sector investment rose as
domestic and foreign investment projects approved in the third quarter in 1999
began implementation in the second quarter of 2000. Manufacturing,
construction and trade all recorded positive growth in the second quarter of
2000.
INFLATION
After recording a high annual inflation rate of 77.6 percent in 1998 associated
with the country’s financial crisis, price stability has now been restored. In
1999, inflation for the year as measured by the CPI, stood at only 2.01 percent.
This lower inflation outcome for the year reflected the actual price decreases
registered for several months.
Since April 2000, inflation has shown an upward trend in line with government
policies to raise electric tariffs, the price of premix (special type of gasoline),
transportation costs, telephone rates, and minimum wages. Quarterly inflation
increased from 0.94 percent in the first quarter to 1.91 per cent in the second
quarter of 2000. During the first half of 2000, the inflation rate reached 2.86
percent compared to 2.73 percent during the same period in the previous year.
Considering that the administered commodities are being used as inputs for
the production of many other products, the inflationary pressure for the next
quarter is projected to increase further. The depreciation of the rupiah since
the beginning of 2000 will also put further pressure on the inflation rate.
BALANCE OF PAYMENTS
Indonesia’s balance of payments (BOP) during 1999 recorded an overall surplus.
This shows a current account surplus more than offsetting the deficit in the
capital account. This outcome was similar to that of 1998 but contrasts to the
current account deficits which Indonesia experienced in 1997 and earlier when
the capital account was in a surplus position as a result of strong private capital
inflows.
The observed slight increase in the current account surplus from US$4.1 billion
in 1998 to US$5.8 billion in 1999 was due to higher exports and lower imports.
The increase in exports was attributable to higher oil/gas exports, while
non-oil/gas exports remained largely sluggish. In terms of its share of GDP,
however, the current account surplus showed a slight decline from 4.3 percent
in 1998 to 4.1 percent in 1999 due to the rupiah strengthening against the US
dollar in 1999.
The current account surplus in the first half of 2000 increased to US$3.9 billion,
compared with US$2.4 billion during the same period in the previous year. This
was mainly attributable to higher oil prices as well as strong growth of
non-oil/gas exports. Non-oil gas exports made a strong rebound, growing by 21
percent in the first half of 2000 against a negative 13.7 percent in the same
period of the previous year.
In the second quarter of 2000, non-oil/gas exports continued to show an
improvement, increasing by 7.3 percent compared to the previous quarter (5.1
percent). This increase was brought about by an increase in exports of
manufactured goods, such as electronics, textiles, wood and paper products.
On the import side, non-oil/gas showed an improvement though it still recorded
a negative growth of 5.4 percent as compared to 7.9 percent in the previous
quarter. The increased imports were due to the resumption of economic
activities, with non-oil/gas imports still dominated by imports of raw
materials, capital goods, and consumption goods. The overall performance of
the external sector in the second quarter was characterized by a lower current
account surplus of US$1.3 billion as against US$2.0 billion in the earlier quarter.
EXCHANGE RATE
Consistent macroeconomic policies, as exemplified by a tight monetary policy,
have been instrumental in stabilizing the economy and reducing exchange rate
volatility during 1999. This condition was strengthened with the improved
international confidence in the new government following the peaceful conduct
of the presidential and vice-presidential elections. For the whole year of 1999,
the rupiah strengthened from around Rp 8,000 against the US dollar in
December 1998 to Rp 7,000 per US dollar at the end of 1999.
However, entering the first quarter of 2000, negative market sentiment along
with heightening political and economic uncertainties put strong pressure on
the rupiah to depreciate. During the second quarter of 2000, the rupiah on
average depreciated by around 11.6 percent, from Rp 7,391 in the first quarter
to Rp 8,255 to the US dollar in the second quarter. It went on to depreciate to
as low as Rp 9,000 at the end of July 2000. The Ambon and Aceh crises, the
banking sector’s scandal, the annual session of the people’s consultative
assembly in August 2000 as well as the downgrading of Indonesia’s credit rating
from CCC+ to Selective Default (SD) have resulted in uncertainties in political
and economic conditions.
FISCAL POLICY
For fiscal year (FY)1999/2000, the overall fiscal deficit stood at Rp 16.9 trillion,
or 1.5 percent of GDP, much lower than the 6.8 percent budgeted at the start
of the fiscal year. This lower fiscal deficit was due to a number of factors.
First, on the revenue side, receipts were much stronger than anticipated. This
was particularly due to higher government incomes from oil/gas activities.
Second, on the expenditure side, government spending was much slower than
budgeted. This was particularly attributable to a slowing down in investment
and spending, owing to the delay in the international creditor’s financing.
For FY 2000 (covering only the last nine months of calendar year 2000 in a
transition to allow the fiscal and calendar years to coincide in the future), an
overall deficit of 4.8 percent of GDP is predicted/the target. However, as of
July 2000, the government’s fiscal operation recorded a surplus amounting to
Rp 17.0 trillion. This development, however, is seen not to give enough
stimulus for re-energizing economic activities. On the revenue side, the main
sources of the contraction were the income and value-added taxes, which
accounted for as much as 50 percent of total revenue. On the expenditure side,
the bulk of the spending was allocated to wages and interest payments of
government bonds resulting from bank recapitalization.
MONETARY POLICY
In 1999, Bank Indonesia continued to implement prudent monetary policies
aimed at recovering exchange rate stability. To attain these policy objectives,
a number of intermediate indicative targets of monetary aggregates and
variables have been formulated and publicly announced. These intermediate
targets include base money (BM), net international reserves (NIR), and net
domestic assets (NDA).
Reflecting the tightening of monetary policies in early 1998, the growth of the
monetary aggregates, measured on a year-on-year basis, has been brought
back under control and has dropped considerably. The base money target
performance for the year has remained largely on track, with the exception of
December 1999. After increasing sharply to Rp 101.8 trillion in that month, the
base money position has declined gradually to Rp 88.9 trillion at the end of
March 2000. This development indicates that the deviation of base money from
the target by as much as Rp 16.7 trillion in the end of the year was just
temporary.
The broader monetary aggregates (M1 and M2) behaved in similar fashion as
base money, M0. In line with the shift in deposits to currency, the measured
nominal and real M1 also increased sharply. Until December 1999, M2 was still
increasing in nominal and real value. On the component side, there was a
shifting trend of assets holding from deposits to currency. The expected
seasonal factors, such as Christmas, New Year, and Ramadhan, and the concern
about Y2K issues also played a role in the increasing currency demand.
Inflationary pressure subsided and the rupiah strengthened, allowing a gradual
reduction of the interest rate within the context of the overall monetary policy
program. The benchmark SBI auction rates declined subsequently from around
38 percent at the end of 1998 to around 22 percent in mid-1999 and continued
to decline to 12.51 percent by the end of December 1999. The lower SBI rate, in
turn, has been followed by a further decline in deposit rates.
However, since the start of 2000, monetary aggregates as reflected by base
money have tended to move above their indicative target due to the strong
demand for currencies resulting from stronger than expected economic growth
and the precautionary motive of the general public in anticipation of
unexpected events.
Consequently, at the end of the second quarter of 2000, the SBI rate increased
to 11.74 percent from 11.03 percent in the first quarter. On July 26, 2000, the
1-month SBI weighted average interest rate was 13.53 percent. An expansion in
base money (driven by interest payment of government bonds, SBIs and rupiah
intervention), the pressure on the rupiah as well as the hike in foreign interest
rates have prompted the monetary authority to adopt a tight monetary policy
stance through open market operations.
BANKING DEVELOPMENT
The cost to December 1999 of the banking restructuring process had reached
Rp 540 trillion in the form of government bonds. In 2000, additional
government bonds amounting to Rp 120.2 trillion would be issued.
Up to December 1999, loan-restructuring realization increased, especially in
government banks. In the meantime, loan restructuring in private banks
appeared to be on hold.
Non-performing loans of banks have declined due to the shifting of some loans
to the Indonesian Bank Restructuring Agency (IBRA) and the positive results of
loan restructuring since July 1999. Further restructuring would take effect after
October.
MAIN STRUCTURAL REFORMS
Fiscal reform
The fiscal reform agenda has been implemented. Consistent with the approved
budget, Parliament is expected to approve the amendment to the Value Added
Tax (VAT) Law. Other tax reforms, such as the provision of tax privileges for
the Integrated Economic Development Zones (KAPETs), rationalization of
import tariffs on capital goods and the imposition of a flat 5 percent duty on
exempted goods, have been implemented.
In line with fiscal reform, the government commits itself to delivering greater
fiscal transparency, improving treasury management procedures, consolidating
the number of bank accounts of government agencies, and ensuring consistency
between monetary and fiscal data.
Preparations for implementing fiscal decentralization in 2001 will be guided by
some key principles. The key principles are: (1) revenue transfer to
sub-national governments shall be consistent with responsibilities, (2)
expenditure responsibilities shall be developed in graduating fashion in keeping
with the capacities of the sub-national governments, and (3) specific
mechanisms shall be developed to ensure that any borrowing by sub-national
governments shall be kept within strict limits. The recently established
Regional Autonomy Advisory Council (RAAC) and the Coordinating Team are
leading the process.
Banking System Reform
Regarding governance of the banking system, several improvements have been
made including, among others:
The IBRA has concluded its evaluation of all outstanding interbank claims
under the guarantee scheme. Settlements have now been taking place in
all cases, except for very small claims under litigation. The IBRA and
Bank Indonesia are implementing plans to ensure that banks whose
claims were ineligible remain adequately capitalized.
A new governance and oversight framework for the IBRA is being
developed with the assistance of an international consulting firm, and in
collaboration with the World Bank. This new governance framework for
the IBRA, including an independent governing body, was established at
the end of June 2000.
In improving its transparency, the IBRA has commenced regular
publication of its activities, by way of monthly reports on: sales and
collection activities, progress in loan restructuring and disposal of
industrial assets; and quarterly financial reports by the BTO banks. In
June 2000, the IBRA published the audit report of its end-1999 accounts,
with the assistance of an international accountancy firm. The IBRA also
issued its first comprehensive annual report during the third quarter.
To coordinate the government’s response to uncooperative debtors and
former bank shareholders, a new body—the Committee for Resolving the
Cases of Recalcitrant Debtors—was established at the end of May.
With regard to state and BTO bank restructuring, the Ministry of Finance has
established a governance and oversight unit for state-owned and recapitalized
banks. This unit is responsible for overseeing the stakeholders’ interest in the
banks and ensuring compliance with their business plans.
Regarding the supervisory and regulatory framework, Bank Indonesia is
implementing a comprehensive master plan to upgrade bank supervision and
comply with international regulatory norms by end-2001, assisted by
international experts. The master plan will focus on improving the quality and
timeliness of offsite reporting the data of all banks, and on making operational
a program of special surveillance for systemically important and problem banks.
Bank Indonesia will also upgrade its regulatory framework. On March 30, Bank
Indonesia issued a decree concerning the setting out of the conditions under
which it will transfer banks to the IBRA.
Furthermore, to strengthen the regulatory and the governance structure of the
pension and insurance industries, finance companies, and the capital markets,
reform on the nonbank financial institution is on the agenda. These reforms
are being designed with assistance from the Asian Development Bank (ADB).
With regard to the Bank Indonesia audit, said bank has been implementing in a
timely way measures aimed at addressing the issues raised by the Supreme
Audit Board (BPK) report to Parliament on December 31, 1999 and clarifying
Bank Indonesia’s financial position, as outlined in the January MEFP. At
end-June 2000, Bank Indonesia published an audited statement of its financial
accounts for end-1999. Over the coming months, in consultation with the BPK,
it will take steps to address remaining audit issues, including the full
divestment of financial subsidiaries, as well as the aggressive strengthening of
management information systems, financial and operational controls, and
accounting policies to reflect best practices. A due diligence of all Bank
Indonesia’s subsidiaries will be completed by June 2000 ahead of their planned
disposition, which was to be substantially completed by end-2000.
With regard to bond market reform, Indonesia has begun the development of a
domestic bond market by making an initial share (10 percent) of the bonds
issued for bank recapitalization eligible for trading. A debt management office
(DMO) will coordinate future bond issues and the development of a debt
management strategy in consultation with Bank Indonesia. The government will
also submit to the Parliament a draft law on debt management that will ensure
automatic appropriations of debt-service payments for all government bonds
issued.
MEDIUM TERM OUTLOOK
In 1999, the key macroeconomic indicators of the Indonesian economy provided
evidence suggesting that the process of Indonesian economic recovery was
gaining greater momentum in line with improvements in various sectors. This
is in line with gains on both the domestic political and economic fronts.
Inflation has subsided, interest rates have declined, and the rupiah has
stabilized.
Toward mid-2000, the economic recovery was well underway. However, a
number of strains appear to stand in the way of economic recovery. The rupiah
has been continually under pressure, with eventual adverse consequences on
inflation. In addition, the bank intermediation function has yet to fully recover
as the banking recapitalization process and corporate restructuring are not
optimally implemented. The increasing domestic uncertainty, which was
reflected in an increase in risk premium and a weakening of the exchange rate,
has subsequently resulted in greater inflation pressure and a higher interest
rate. These in turn might halt banking and corporate restructuring as well as
the recapitalization process, particularly debt restructuring. However, with the
peaceful completion of the annual session of the People’s Consultative
Assembly and the formation of a new economic team in the cabinet, the trend
of economic recovery should turn for the better.
Economic activity for the whole of 2000 should expand more strongly than in
1999, although it remains lower than its historical norm before the crisis. The
GDP growth for the year 2000 is projected to surpass the original projection
range of 3 to 4 percent. On the demand side, the source of aggregate demand
expansion and economic growth is expected to originate from private
consumption, investment, as well as exports. Consumption should be
moderating while investment and exports should be picking up. Given its share
of GDP (the largest at 77 percent), consumption is seen to remain important in
driving the recovery. Such an improving outlook is supported by the business
survey, which indicated that more respondents expect to see their activities
picking up in the next quarter. In parallel, the consumer survey also suggested
a more optimistic trend in the next quarter.
At the start of the year, the inflation rate for 2000 is targeted to range
between 3 and 5 percent (taking no account of a prices and incomes policy) or 5
and 7 percent (including such a policy). In view of the persistently weakening
exchange rate during most of the year, it looks increasingly likely that the
inflation outcome will exceed the target. To keep the inflation rate within a
reasonable level and to keep the exchange rate movement less volatile,
monetary policy is continuously being directed to absorbing excess liquidity in
the money market, which at the same time will reduce the use of the rupiah for
speculative activities. The tight monetary policy and strategy understandably
will push interest rates higher but gradually they will be reduced/eased down in
line with the prevailing money market conditions.
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