 INDONESIA

The name ‘Indonesia’ is formed from two Greek words: ‘Indos’ which means ‘Indian,’
and ‘nesos’ which means ‘islands’. The Indonesian name for Indonesia is ‘Tanah Air
Kita’ - Our Land and Water.

The Republic of Indonesia is the world’s largest archipelago, and is probably the last
territory on earth still not fully explored and mapped. It is estimated to have about
18,000 islands, of which 6,000 have been named and fewer are inhabited. Based on
these approximations, it would take 48 years in order to spend a day on each island
(not factoring transportation time).

Situated between Indochina to the north and Australia to the south, the archipelago
stretches east and west along the equator, from the Indian to the Pacific Ocean, for
more than 5,000 kilometres (the average length of a continent).

 Flag

Indonesia's flag was officially adopted on August 17, 1945, after Indonesia became
independent from the Netherlands.

The Indonesian flag is a horizontal bicolor with two equal horizontal bars (red [top]
and white). The height of this flag is two-thirds the width.

In Indonesian, this flag is called "Sang Saka Merah Putih" (meaning "lofty bicolor red
and white"). The red symbolizes human blood and the white represents the human
spirit. The design of this flag is based on the 13th century Javan Majapahit Empire
flag that had nine red and white stripes.

Indonesia's flag is very similar to the flags of Poland and Monaco, two other red and
white bicolors with the white on top.

 LANGUAGE

Although Indonesian (also know as Bahasa Indonesia or "language of Indonesia") is

the official language of Indonesia, it is only spoken as a first language by 17 to 30
million of that country's inhabitants. Second language speakers, however, amount to
over 140 million.

Indonesian is an Austronesian language; it belongs to the Western, or Indonesian,

branch of the language family. Standard Indonesian, which became the official
language of Indonesia in 1945, is based on the dialect found in the southern Malay
Peninsula (the so-called Bahasa Riau dialect). Unlike Malay in Malaysia, Indonesian
has become the lingua franca of Indonesia through its relative simplicity, as well as
the fact that it is not connected with any particular ethnic group in the country.

Like Malay, Indonesian has been greatly expanded through its borrowings from
languages such as "Arabic (in particular many religious terms), Sanskrit, Portuguese,
Dutch, certain Chinese dialects and more recently, English (in particular many
scientific and technological terms)."3 Indonesian's orthography and grammar are
regulated by the Pusat Pembinaan dan Pengembangan Bahasa or the Centre for
Language Development.
  Religion

Islam is the official religion of 85 percent of Indonesians; Christians (Protestant and

Catholic) represent about ten percent and are scattered throughout the
archipelago; combined Hindus and Buddhists account for approximately four
percent and live mainly on the islands of Bali and neighbouring Lombok.

 Livelihood

Agriculture provides employment for a large percentage of the working

population. Agricultural products include rice, cassava, peanuts, nutmeg, cloves,
palm oil, copra, coffee, cocoa, meat and eggs. Indonesia's other main industries are
petroleum, natural gas, mining, cement, chemical fertilisers, rubber, plywood,
textiles, clothing, footwear and food processing. Tourism is an important industry,
especially on the island of Bali.

 Sport

Traditional sports enjoyed by Indonesians include pencak silat, a form of martial arts;
sepak takraw, a ball game involving a rattan ball that must be kept in the air using
any part of the body except the hands; and boating. Indonesians are also fond of
football (soccer) and are “fanatical” about badminton (which rarely fails to earn
them Olympic gold). Kite flying is extremely popular amongst young children, whose
kites can be seen in the dusk sky almost every evening during the dry season – so
popular, in fact, that kites merit their own museum (the Kite Museum) in Jakarta.

Internationally, Indonesia is perhaps best known for its surfing and diving. Boasting
the best waves on earth (with Hawaii and South Africa), Indonesia attracts
thousands of international surfing competitors each year. And the coral reefs of the
coastline put Indonesia on the top-ten list of diving destinations.

 Arts

Indonesia has been influenced by many cultures throughout the centuries, and its art
forms reflect those influences. The famous shadow puppet (wayang kulit) shows of
Java and Bali display many of the ancient mythological stories of the islands. The
well-known Javanese and Balinese dances originated later (during the pre-Muslim
era) and are often based on Indonesian versions of the epic Hindu poems, the
Ramayana and Mahabharata. Gamelan orchestras, consisting mainly of percussion
instruments, accompany shadow puppet shows and traditional dance
performances.

Indonesia is famous for wooden carvings, batik and textiles. Traditional cloth
paintings can be seen in the temples and shrines of Bali. Hangings show scenes of
stories set out in consecutive boxes, often with themes from the Sanskrit epics.

The most well-known author in Indonesia today is Pramoedya Ananta Toer, who won
the Magsaysay Award and was considered for the Nobel Prize in Literature. Another
important figure is the late Chairil Anwar, a poet and member of the Generation 45
group of authors who were active in the Indonesian independence movement.

 Daily wear
Indonesia is home to some of the most elaborate and impressive styles of clothing in
the world. The costumes for special ceremonies are detailed and intricate. Like in
Australia, however, most Indonesians don't wear their best clothes every day.

In the larger cities like Jakarta, people tend to dress in western styles. There are
different styles of clothing for men and women. All Indonesians tend to wear light
clothes because of the hot and humid climate.

As most Indonesians are Muslim, women tend to dress conservatively. Women who
work in offices may wear business suits made of light material. They may also wear
skirts with blouses. Skirts are expected to reach at least to the knees and blouses or
shirts should cover their upper arms.

Even though it has a large Muslim population, women in Indonesia are not required
to wear traditional Muslim veils or scarves. Some women do choose to wear these
items as a sign of their own beliefs.

Outside of work, women often wear a light cotton shirt with a batik sarong. A sarong
is a long piece of cloth that is wrapped around the waist and tied and most are
about two metres long (see image 1). Women in rural areas wear sarongs more
frequently.

Men who work in offices often wear trousers with a shirt and tie. Some businesses
may be less formal and do not require men to wear ties. For important meetings they
are expected to wear suits.

Batik shirts are considered formal clothing in Indonesia and it is acceptable for men
to wear them with trousers while working.

Men often dress more casually once they have finished work for the day, sometimes
wearing a sarong and a casual shirt.

Men living in the country may wear sarongs as part of their everyday clothes.
Sometimes they wear a special, shorter type of sarong that allows them to move
more freely.

Many Muslim men often wear a velvet hat known as a peci. This hat is a sign of their
belief that all people are equal in the eyes of Allah. Men who have completed the
holy journey to Mecca will wear a white peci.

Younger people in the cities are even more casual and it's not unusual to see them
wearing jeans and t-shirts. Tourist areas are perhaps the most casual of all, where
people wear shorts and T-shirts as they visit sights and go shopping.

 Cloth

Indonesia is famous for some of the special fabrics that it makes. Two of the most
famous are ikat and batik. These are traditional cloths made by hand in Indonesia.

Ikat cloth is made by weavers who create patterns in the cloth by weaving different-
coloured threads into it. It usually uses a dark colour as the main part of the cloth
and a pattern is made from lighter-coloured threads (see image 3).
Batik cloth is made through a complicated dyeing process. Batik artists start with a
length of white cloth and carefully work a pattern over it using a special wax, this
pattern needs to be done on both sides of the cloth. Once the wax is set, the whole
cloth is dyed except for the pattern that the wax covers (see image 4).

Artists will then remove the wax and create another pattern of wax and dye the
cloth again with a different colour. This can be done many times over until the
complete pattern is finished.

Ikat and batik cloths can be worth a lot of money. Today there are some factories
that use modern technology to make similar cloth without using the traditional
methods that take a lot of time. This results in cheaper cloth but many people feel
that it is an inferior product when it is not made by hand.

 Festivals and special occasions

 Waisak Day - this is a Buddhist festival held in May that celebrates Buddha's
birth, death and gaining of wisdom. Celebrations are held at Borobudur
Temple near Yogyakarta on the island of Java.
 Galungan - this is an important festival on Bali. The day it is celebrated
changes depending on the Hindu calendar. This festival honours ancestors
and people travel home to their families to make offerings and pay respects.
 Nyepi - this day is the Balinese New Year. It is also based on the Hindu
calendar and is very different from New Year celebrations in Australia. Before
Nyepi, the Balinese people take statues of the gods out and clean them. They
hold special ceremonies to cast out bad spirits and then on the day of Nyepi
they do nothing. The word Nyepi literally means silence and everything in Bali
closes, the people stay home and the whole island is quiet.
 Ramadan - this is the ninth month of the Islamic calendar and during this
month Muslims do not eat or drink while there is sunlight. This is a time to focus
on prayer and faith. In the evening families have small meals and visit friends.
It is the holiest time of year for Muslims.
 Id al-Fitr - this is the feast that immediately follows Ramadan. Muslims enjoy
food together and ask each other for forgiveness for any wrongs that they
have done during the year. This festival lasts for three days and many people
travel to be home with their families for it.
 Easter - this is the same festival that is celebrated by Christian people around
the world. It remembers the death and resurrection of Jesus.
 Christmas - this is also the same festival celebrated by Christians everywhere.
This is to celebrate the birth of Jesus.
 Food
-beef rendang
-ketupat
-satay
-fried rice
 FOREX

Currencies Value Sell Buy Graph

AUD 1.00 10,655.97 10,547.62

BND 1.00 9,853.37 9,752.00

CAD 1.00 10,930.82 10,820.60

CHF 1.00 13,800.44 13,657.85

CNH 1.00 2,030.43 2,009.67

CNY 1.00 2,032.38 2,012.22

DKK 1.00 2,124.42 2,103.00

EUR 1.00 15,807.67 15,649.52

GBP 1.00 17,567.92 17,392.31

HKD 1.00 1,703.21 1,686.27

JPY 100.00 12,042.90 11,920.19

KRW 1.00 11.76 11.64

KWD 1.00 44,158.65 43,706.04

LAK 1.00 1.61 1.59

MYR 1.00 3,168.61 3,134.94

NOK 1.00 1,688.24 1,670.43

NZD 1.00 9,655.44 9,557.01

PGK 1.00 4,277.56 4,017.77

PHP 1.00 260.22 257.46

SAR 1.00 3,547.91 3,512.52

SEK 1.00 1,655.78 1,638.82

SGD 1.00 9,853.37 9,752.00

THB 1.00 401.72 397.50

USD 1.00 13,305.00 13,173.00

VND 1.00 0.59 0.58

 Currency
Indonesian rupiah
  Exports

Indonesia is the 26th largest export economy in the world and the 52nd most
complex economy according to the Economic Complexity Index (ECI). In 2015,
Indonesia exported $161B and imported $139B, resulting in a positive trade balance
of $21.7B. In 2015 the GDP of Indonesia was $861B and its GDP per capita was
$11.1k.

The top exports of Indonesia are Coal Briquettes ($14B), Palm Oil($12.3B), Petroleum
Gas ($9.5B), Crude Petroleum ($5.93B) and Rubber($4.2B), using the 1992 revision of
the HS (Harmonized System) classification. Its top imports are Refined
Petroleum ($13B), Broadcasting Equipment ($2.77B), Vehicle Parts ($2.68B), Crude
Petroleum ($2.48B) and Telephones ($2.35B).

The top export destinations of Indonesia are the United

States ($20B), China ($18.5B), Japan ($18.5B), Singapore ($13.6B) and India ($12.6B).

 Imports

Indonesia imported $139B, making it the 31st largest importer in the world. During the
last five years the imports of Indonesia have increased at an annualized rate of 0.7%,
from $133B in 2010 to $139B in 2015. The most recent imports are led by Refined
Petroleum which represent 9.3% of the total imports of Indonesia, followed
by Broadcasting Equipment, which account for 1.98%.
The top import origins are China ($34.4B), Singapore ($27.8B), Japan($11.3B), South
Korea ($7.87B) and Thailand ($7.71B).

Indonesia borders Malaysia, Timor-Leste and Papua New Guinea by land

and Christmas Island, India, the
Philippines, Singapore, Thailand, Vietnam, Australia and Palau by sea.

 Growth Prospects

According to World Bank, Indonesia continues to post significant economic growth.

The Central Intelligence Agency (CIA) goes on to say, “During the global financial
crisis, Indonesia outperformed its regional neighbors and joined China and India as
the only G20 members posting growth.”

Most of Indonesia’s success is largely homegrown.

Meaning, domestic consumption (roughly 60%) has enabled Indonesia to grow

faster than its neighbors, such as Singapore, whose economy is more dependent on
import/export trade and therefore more vulnerable to slowing export demand.
Indonesian exports are worth about 25% of the country’s economy.

 Homegrown Products

The products Indonesia is best known for are rubber and similar products, palm oil,
poultry, beef, forest products, shrimp, cocoa, coffee, medicinal herbs, essential oil,
fish and its similar products, and spices.

 Exporting to Indonesia

If you are interested in exporting to Indonesia, your best approach for entering the
market is to work with local agents and distributors. The U.S. Commercial Service
Jakarta helps U.S. companies identify and qualify potential Indonesian
representatives. Once you find a qualified representative, visit the market and meet
with him/her. Relationships are important to Indonesians. And they base a lot of their
decisions on receiving competitive pricing, creative financing and after-sales
service. Treat your representatives well and the return to your business will be
increased revenues and profits.

What do Indonesians need? They seek infrastructure development. U.S. industry is

well positioned and qualified to supply the kinds of architectural, design and
engineering services and project management skills needed to successfully tackle
major projects in Indonesia.

 Business Industry

Indonesia has outperformed most countries in the World throughout the crisis years
on the back of domestic demand. However, in order to maintain that growth level,
and not be faced with increasing inflation, the country will need to seek structural
improvements.

Strengths and weaknesses

*Strengths

-Demographics

Indonesia has a young and growing population (currently 246 million people), with a
growing middle class.

-Strong government finances

Indonesia has a rather low public debt (25% of GDP), and posts only limited fiscal
deficits. This is also due to the government not being able (bureaucratically) to
spend.

*Weaknesses

-Business environment

Indonesia scores poorly on social indicators such as the Ease of Doing Business,
Corruption Perception and Press Freedom. Also, the infrastructure of the country
(roads, electricity) is poor.

-Energy subsidies

Fuel is heavily subsidized in Indonesia, leading not only to a flip of the current
account into a deficit position, but also to reduced competitiveness of the economy
and fiscal inflexibility.

 Dos and don’ts of doing business in Indonesia

 Do be respectful of Indonesian associates – avoid applying pressure or being
confrontational and speak in a gentle manner in business meetings
 Do exercise patience – Indonesians prefer to take their time and consider
business propositions carefully
 Don't touch or pass something over the top of someone’s head as it is
considered to be the most sacred part of the body
 Do hold face-to-face meetings as these are generally more effective than
written communications in Indonesia
 Don't give or receive anything with the left hand – always use the right hand
or both hands together
 Don't sit with the soles of your feet showing as it is considered to be
discourteous
 Don't stand with your hands on hips or arms folded – both these stances are
considered aggressive and rude
 Do leave enough time to get to business meetings, especially in Jakarta and
other larger cities, as traffic congestion is a constant hindrance
 Don't make too much eye contact when speaking to Indonesian associates –
this can be viewed as suspicious and threatening