(Last updated: 24 January 2012)

Current business situation

The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Indonesia. This is regularly updated, and should be checked before planning travel.

Country facts

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Economic climate

On 10 January 2012 the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) entered into force for Indonesia; Australia’s most ambitious trade deal to date. Australian business is urged to take a close look at the opportunities created by the agreement, as it will deliver real commercial benefit for Australian exporters and investors doing business in Indonesia. More information on AANZFTA is available here.

Indonesia, South East Asia’s largest economy has significantly lifted its global economic and geopolitical profile posting positive growth in the face of weak economic conditions.

Equipped with lessons from previous financial upheavals, the Indonesian economy has withstood the global financial crisis better than many analysts expected.

Indonesia has considerably outperformed many of its export-oriented peers in the region. Within the region, only China and India have outperformed Indonesia.

According to the Indonesian Bureau of Statistics (Badan Pusat Statistik), signs of recovery were evident during the fourth quarter of 2009. Poised for solid growth in 2010, the Central Bank has raised its economic growth forecast to 5.6 per cent from an original forecast of 5.2 per cent. Central Bank (BI) has also raised the growth forecast for the first quarter to 5.7 per cent from 4.8 per cent.

For further information and the latest key economic indicators and statistics, please see the Department of Foreign Affairs and Trade - Country economic fact sheet.

Political climate

The Republic of Indonesia gained independence on 17 August 1945, and the Constitution was adopted as the fundamental law of the nation.

Under the provisions of the Constitution, the President is the leader of the country and is assisted by the Vice-President and Cabinet Ministers. The President is accountable to the People’s Consultative Assembly (Majelis Permusyawaratan Rakyat) where the sovereignty of the people rests, while the legislative power is vested in the House of Representatives.

Trade relations and statistics

Indonesia is a member of the Association of South East Asian Nations (ASEAN). Malaysia, Philippines, Singapore, Thailand, Brunei-Darussalam, Vietnam, Laos, Burma and Cambodia are also part of ASEAN.

The Australia-Indonesia Development Area (AIDA) is an initiative aimed to develop closer economic relations between Australia and the eastern provinces of Indonesia. By involving the private sector as the key player in the AIDA process and governments as facilitators of their efforts, AIDA aims to improve the environment for private sector trade and investment in the region.

AIDA's institutional mechanism is designed to provide the widest possible opportunity for interaction between government and business. The private sector will direct AIDA process through six sectoral working groups in the areas of agriculture, fisheries and animal husbandry, mining and energy, tourism, transport, education and training, trade and industry. The working groups will enable business to make and reinforce business contacts, and to make known their requirements to governments.

Please see the Department of Foreign Affairs and Trade - Country economic fact sheet for key trade statistics.