The Indonesian Political Climate
Being the world’s third largest democracy, and largest economy in the Southeast Asia region, Indonesia is also a proud member the G20.
From how it used to be, it has transformed itself to become a role model for a successful political transition. This is because now, Indonesia is stable politically and has a Presidential system of democracy.
In President Joko Widodo, Indonesia has the first elect to come from outside the political and military elite. Unlike a constitutional monarch, bylaws are passed by Parliament or by Presidential decree. However, a Presidential decree needs to be confirmed by Parliament for it to take effect.
Indonesian Market Overview
Indonesia’s economy has high rates of informality particularly in the labour market. The International Labour Organization (ILO) has estimation that 60% of non-agricultural jobs in Indonesia are informal.
Stringent hiring and firing rules at the labour market regulation has pushed many Indonesian firms to run unregistered business to avoid compliance with the Indonesian labour law.
However, that is forecasted to changed as the new economic reform programme has been giving positive results.
Key reforms are in place to improve the business environment, access to electricity, registering property, paying taxes, acquiring finance, and establishing cross-border trade and contracts.
Indonesia is a large and geographically diverse country that relies heavily on the export of natural resources therefore new or existing companies should research the market and prospective partners thoroughly.
Top 10 industries importing into Indonesia
- Oil and Gas
- Iron and steel
- Electronic products
- Organic chemicals
- Iron or steel products
- Food waste and animal fodder.