foreign trade and investment in indonesia
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As per the current scenario, global economic
conditions appear to be improving as
compared to 2012, but at a slow and uneven
pace.
Like other commodity exporters, Indonesia
has clearly felt the effects of the weaker
global economy in 2012 through the trade
channel.
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The economic development of Indonesia
in the past half a century has waxed and
waned.
From near economic ruin and hyper-
inflation in the 1960s, to the oil boom ofthe 70s, to the economic crash of the late
nineties and finally to the relative
smooth sailing of the present globalfinancial crisis.
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The current trade agenda pillar of the
broader strategy is predicated on three
medium term trade policy objectives:
1. To increase the export of non-oil
products
2. To strengthen the domestic market and
manage the availability of basic
products3. To strengthen national distribution
channels
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Trade deficit of 846.60 USD Million in June of 2013
Balance of Trade averaged 788.24 USD Million from 1960 until
2013
All time high of 4641.92 USD Million in December of 2006
Record low of -1700 USD Million in April of 2013.
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Since the 1970s Indonesia has been
recording trade surpluses due to exports
growth.
However, in 2012, the country posted
trade deficit, as exports fell due to aslowdown in the global economy and
surge in imports.
Much of the decline in exports can beattributed to weaker commodity prices,
many of which remain under pressure.
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Imports decreased to 15587.30 USD Million in June
of 2013 from 16660.50 USD Million in May of 2013.
Indonesia Imports averaged 2598.62 USD Million
from 1959 until 2013, reaching an all time high of
17207.93 USD Million in October of 2012 and arecord low of 21 USD Million in September of 1959.
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Oil and gas (around 22 percent of total
imports)
Machinery (15 percent) Electrical equipment (10 percent)
Iron and steel (5 percent)
Vehicles (5 percent)
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China (19 percent)
Japan (15 percent)
The United States (7.5 percent) Singapore (7 percent)
Thailand
South Korea
Malaysia
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Exports decreased to 14740.70 USD Million in June of 2013
from 16133.40 USD Million in May of 2013.
Exports averaged 3434.26 USD Million from 1960 until 2013,
reaching an all time high of 18647.83 USD Million in August of
2011 and a record low of 30 USD Million in January of 1961.
Exports have been an engine of growth in recent years
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China (14 percent)
Japan (12 percent)
The United States (9.5 percent) India (8 percent)
Singapore
Malaysia
South Korea
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Indonesia has become a darling of someinternational companies and investors in recent
years as its strong economic expansion and
relative political stability have given more
people confidence in the market
Foreign direct investment in Indonesia grew 20%
last year to 175 trillion rupiah ($19.3 billion)
At that rate, Indonesia now appears to besignificantly outpacing many other Asian
countries that used to easily surpass it in
drawing foreign money
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Top foreign investors in Indonesia are
Singapore
Japan
The United States
The Netherlands
South Korea
The industries that attract the most
international investment are transportation,
mining and utilities.
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Posco plans to spend up to $3 billion on a
steel-making project in Indonesia by the end
of 2013.
Suzuki Motor Corp. will spend $779 million to
build an engine plant and increase output in
Indonesia.
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Toyota Motor Corp. has committed
$337 million to expand production
capacity.
Caterpillar Inc. will invest $150million to build a new factory to
produce mining trucks for
customers in Indonesia and
elsewhere in Asia.
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Complexity, lack of transparency and
trade-impairing effects of import
licensing requirements Export restrictions and taxes on raw
resources
Ownership limitations on banks
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Enactment of important laws and reformmeasures to investments, export
financing, customs procedures, as well as
in sectors such as agriculture, fisheries,shipping, mining and tourism.
Systemic efforts to reduce constraints on
trade, investment and production and to
streamline procedures at the border.
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