INDONESIA OUTLOOK

From Bloomberg Business Week Sept 19, 2012 Indonesia's struggle to boost sugar output due to competition for land and under-investment is forcing the country to spend heavily and become the world's biggest importer of the sweetener in place of China, which has ramped up domestic output.  Sugar consumption in Indonesia, the world's fourth most populous country with around 240 million people, is seen growing  around 4 percent annually, according to the  International Sugar Organization  (ISO).  "We forecast that  Indonesia  will import 2.15 million tonnes of raw sugar in 2012/13 (October/September), which will make the country the world's largest raw sugar importer," said Sergey Gudoshnikov, a senior economist with the ISO.  "They are condemned to seek large-scale imports." Yamin Rahman, executive director of the Indonesian Refined Sugar Industry Association, said, "Our raw sugar imports are big because our population is large and ...

From JakartaGlobe Sept 20, 2012 Goldman Sachs Group raised its recommendation on Indonesian stocks, citing the Southeast Asian nation’s fundamentals, easing policy concerns and its lagging performance to other regional markets.   “We are positive on Indonesia’s long-term growth potential — demographic trends, urbanization, capital formation, financial deepening — and we see its underperformance against its Southeast Asian peers as an attractive opportunity to re-engage,” said a group of Goldman analysts led by Timothy Moe, in a report released in Jakarta on Wednesday.   The US investment bank lifted its rating to overweight from marketweight, meaning it suggests that investors own more shares in Indonesia than what is currently allocated in a model investment portfolio.   The MSCI Index for Indonesia has risen 2.7 percent so far this year, lagging the 16 percent gain of the Asean index this year in dollar-denomination terms.   Goldman says it ...

From Economic Times Sept 18, 2012   Indonesia  could overtake Britain to become the world's 7th largest economy by 2030 - if it raises its growth rate to take advantage of a rapidly expanding consumer class, the  McKinsey Global Institute  said on Tuesday. The Institute, linked to management consultant McKinsey & Co, said Indonesia's young population, ongoing urbanization and growing middle class incomes favoured its growth prospects. Indonesia has sustained  GDP  growth over 5 per cent per year but it had to grow at 6 per cent annually to achieve the target the report said was possible. The economy grew at a stronger-than-expected 6.4 per cent last quarter, defying a global downturn, in part because of domestic consumption by the expanding middle class and also investment. Indonesia, a secular state, is the world's fourth biggest by population and has the world's 16th largest economy. It is the biggest economy in  Southeast Asia ...

From CNBC 18 Sep 2012 Southeast Asia's most populous nation is on track to become the world's 7th largest economy by 2030, putting it ahead of the developed nations of Germany and the U.K., a new report by McKinsey Global Institute showed Tuesday. The report cites the country's young population, new consumer class and the rapid urbanization of cities as reasons that will elevate Indonesia's $850 billion economy up nine spots from its current place of 16th largest economy globally.  "Indonesia has a much younger, productive, and growing population. That is a different demographic outlook to the situation in many Western European economies, where the labor force will be either static or decline in size in the future," said Raoul Oberman, Chairman of McKinsey & Company, Indonesia. The country's rapid pace of urbanization-especially in its smaller cities-as it moves up the value chain will contribute significantly to the country's ...

From  Joshua Kurlantzick at the Atlantic 4 Sept 2012 Over the past decade and a half, Indonesia's democratic transition has been praised (including by me) as one of the most impressive of any developing country in the world. The distance traveled from the chaos, and potential split-up of the country, in the late 1990s, to the relative stability and high growth of today, is truly impressive.  One of the main aspects of the democratization often highlighted by both Indonesia experts and many Indonesians themselves is how the country utilized political and economic devolution to reduce the power of Jakarta, cut the legacy of Suharto's rule, increase local participation in politics and the economy, and improve citizens' feeling of belonging to the polity. Decentralization clearly has had many benefits. It has helped broaden and spread growth, and in some ways has helped pit local officials against each other in the race for investment, forcing them to take measu...

From Bloomberg   6 Sept 2012 Kuwait Petroleum International Ltd. and   South Korea ’s   SK Energy Co. (096770)   agreed to develop a refinery in Indonesia that can process as much as 300,000 barrels a day of crude, Kuwait’s state-run KUNA news agency   reported . Officials with the two companies signed a memorandum of understanding on Aug. 29 to develop the facility in West Java, which will be designed to process Kuwaiti oil, KUNA said on its website Sept. 5, citing a statement by Kuwait Petroleum. PT Pertamina, Indonesia’s state-owned oil company, will also be a partner in the project, KUNA reported. For detail story visit here

From Economic Times 11 Sept 2012 NEW DELHI: Homegrown auto major  Tata Motors  announced its foray into Indonesia with the setting up a wholly-owned Jakarta-based subsidiary and plans to launch its products in 2013.  The company will foray into both passenger and commercial vehicles through its arm PT Tata Motors Indonesia, the company said in a statement.  "Indonesia is a key market for Tata Motors, which has a wide range of products from small cars to buses in passenger vehicles and from 0.5T mini-trucks to 49T heavy trucks in commercial vehicles," it added.  Commenting on the development, Tata Motors Managing Director  Karl Slym  said: "As elsewhere in the world and as is the Tata practice, we will function in Indonesia as an Indonesian company...We will establish deeply rooted local operations and will grow in tandem with the prosperity of the country and its people".  On the company's product launch programme for the Ind...

From Washington Post KUALA LUMPUR, Malaysia — Indonesia’s Lion Air said Tuesday it will set up a low-cost airline in Malaysia that will take off in May 2013 as part of an aggressive regional expansion. The move will see Lion Air, which controls nearly half the air travel market in Indonesia, playing catch-up to the region’s top budget carrier AirAsia. It follows AirAsia’s recent acquisition of Batavia Air in a bid to tap Indonesia’s 230 million population. Lion Air will own 49 percent of the new airline, Malindo Airways, and Malaysia’s National Aerospace and Defence Industries the remaining 51 percent. Lion Air President Rusdi Kirana said Malindo Airways will start flying between the two countries with a fleet of 12 new Boeing 737 planes in May, before expanding to other cities in Southeast Asia. Malaysian Prime Minister Najib Razak said at the signing ceremony that air traffic in Asia-Pacific is expected to grow 6.7 percent annually in the next 20 years, from 780 milli...

From the JakartaGlobe Indonesia could see more investment coming from China, as its strategic location and abundance of natural resources serve as a drawing factor, according to Suryo Bambang Sulisto, chairman of Indonesian Chamber of Commerce and Industry.  “[As an investment destination] Indonesia is the most attractive because in terms of distance [from China] we are closer than Australia and Africa,” Suryo said at the Indonesia International Infrastructure Conference and Exhibition in Jakarta on Thursday. The Investment Coordinating Board (BKPM) reported that China invested $52.6 million in Indonesia in the first half of this year, a small amount compared to the total foreign direct investment of $11.9 billion.  China invested a total of $128.2 million over 160 projects in Indonesia last year. For more coverage visit here