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After a democratic election process in 2004 which has resulted a smooth outcome of the first presidential elections in its history, President Susilo Bambang Yudhoyono has some economic program frameworks.

The 2004 target for the economic growth is 4.8% while the current situation (until 3rd quarter 2004) is 4.9%. The inflation was planned to reach 7% and until Nov 2004 it had shown 6.1%.

Previous government targeted SBI up to 7.5% from the current 7.3% (3 month). Rupiah's currency to US$ was also assumed to be Rp 8,900 or Rp 100 lower than the present Rupiah condition.

The 2004 oil price is US$ 37.6 from the US$ 36 prediction while total export growth has reached 15.08% from 7% target. The total export includes 15.76% non-oil and 18% manufacturing export growth.

The import capital goods growth is 38.41% and the trade balance until October 2004 is US$ 20.738 million.

Motor vehicle sales have shown 41% growth (year on year). The sales have reached 399,000 while the maximum sales before the economic crisis were 380,000. Still in 2004, the growth of motorcycle is up to 31%.

The former presidency predicted that the 2004 budget deficit would be 1.3% but it turns out that the deficit is 1.5% and supposedly 1% for 2005. The existing credit growth is 24.7% and at the same, job creation until the 3rd quarter of 2004 is 1.5 million posts.

Job creation

: to reduce unemployment rate from 9.5% in 2003 to 6.7% in 2009

Economic expansion

: GDP Growth from 4.1% in 2003 to 7.2% in 2009

Average growth

: 6.5% per annum (2004-2009)

Poverty eradication

: 16.6% in 2004 to 8.2% in 2009


: 20.5% in 2004 to 28.4% in 2009

Macro-economy stabilization

: stable and low inflation rate, appropriate interest rate, stable Rupiah and sustainable fiscal.


Indonesian Economy At-A-Glance

Inflation Rate

6.6% (2003)

Unemployment Rate

10.5% (2003 est.)

Exchange Rate

8,575 Rp : 1 US$ (2003)

Major Industries

Manufacturing; agriculture, livestock, forestry & fishery; trade, hotel & restaurant; mining and quarrying (2003)

Major Exports

Textiles, natural gas, electrical equipment, crude petroleum, mining products, timber, vegetable oil (2003)

Major Imports

Machinery and equipment, chemicals, fuels, foodstuffs (2003)

Major Exporters

Japan, United States, Singapore, South Korea, China, Malaysia, Taiwan, Australia, India and Germany (2003)

Major Importers

Japan, Singapore, China, United States, Thailand, Australia, South Korea, Saudi Arabia, Germany and Malaysia (2003)

Major Investors

Japan, United Kingdom, Malaysia, South Korea & Singapore, Australia, Brazil, New Zealand, Thailand and Netherlands (FDI approvals for Jan-Jul 2004)
Sources: ASEAN Secretariat, 2004; CIA World Factbook 2004; Statistics Indonesia; NAFED, Indonesia; Investment Coordinating Board (BKPM), Indonesia

Economic Report

Indonesia 's GDP grew by 4.1% in 2003, up from 3.7% in 2002. Domestic consumption, rather than external demand, was the main engine of growth in 2003. It accounted for more than 70% of GDP during the year. According to Indonesia 's Central Bank, the country's positive growth path is likely to continue into 2004, fuelled by rupiah and interest rate stability as well as low inflation.

In 2003, leading sectors in the country's economy include manufacturing (which accounted for 27% of Indonesia 's GDP growth in 2003), trading (16% of GDP growth) and agriculture (15% of GDP growth).

In the area of foreign trade, total exports led total imports to help Indonesia record a trade surplus of US$ 28.5 billion in 2003. Total exports (including oil and gas) rose 6.8% in 2003 to hit US$ 61.1 billion, while total imports (including oil and gas) increased 4.0% to US$ 32.6 billion. Of total exports, non-oil and gas constituted 77.6%, reflecting Indonesia 's increasing diversification away from such products as key exports. Non-oil & gas exports in Indonesia were up 5.2% from US$ 45.0 billion in 2002 to US$ 47.4 billion in 2003, while non-oil & gas imports rose 0.7% from US$ 24.8 billion in 2002 to US$ 24.9 billion in 2003. Indonesia 's main trading partners include Japan , USA , Singapore , South Korea , China and Australia .

Although the country's foreign direct investment (FDI) remained lower than pre-Asian Financial Crisis levels, it nonetheless has been on the uptrend. Indonesia 's Investment Coordinating Board (BKPM) approved 1,059 FDI projects to a tune of US$ 13.6 billion in 2003, up from US$ 9.8 billion in 2002. Major foreign investors include Japan , United Kingdom , Malaysia , South Korea and Singapore . On the domestic front, BKPM approved 196 domestic investment projects worth Rp 50,092.1 billion, nearly doubling that of 2002's Rp 25,230 billion.

In recent years, Indonesia 's Central Bank has been maintaining a relatively cautious macroeconomic stability policy. It has largely focused on achieving low inflation and relative currency stability, while providing room for further cautious easing of interest rates in line with global trends. Indonesia has also been steadily paying back its debts under the International Monetary Fund package entered during the 1998 financial crisis.

According to a statement issued by IMF following a visit by its staff to Indonesia in July 2004, Indonesia looks set to achieve the government's target of 4.8% GDP growth in 2004. The IMF also expects the current account to be maintained at a surplus of around 2.5% of GDP for the year, with official foreign exchange reserves reduced to about US$ 34 billion by end 2004. IMF added that this level is adequate to cover 150% of the country's short-term debt.

While attention on Indonesia in 2004 is likely to be side-tracked somewhat by the parliamentary and presidential elections, the economic outlook in 2004 is widely expected to be positive by both private and international observers.


Industrial Estates

Industrial estates are found in most of the major provinces in Indonesia . Currently, there are a total of 48 operating industrial estates and they cover a combined area of approximately 18,000 hectares.

Most of Indonesia 's industrial estates are located in West Java (e.g. Bekasi, Karawang, Purwakarta). Other large scale estates are found in Jakarta , Banten (Tangerang, Serang), Central Java ( Semarang , Cilacap), East Java ( Surabaya , Gresik, Sidoarjo, Pasuruan, Probolinggo), North Sumatra ( Medan ), West Sumatra ( Padang ), Lampung, Riau ( Batam Island , Bintan Island ), South Sulawesi (Makassar) and East Kalimantan (Bontang).

Infrastructure within the industrial estates varies, although most are equipped with adequate road networks, electricity and water facilities. While regulations pertaining to land use, conduct of tenants, pollution control, operation of factories are applied in all estates, the degree of enforcement may vary.

For profiles of the major industrial estates in various provinces, please visit the BKPM website .




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