Investing in Indonesia

Indonesia is one of the fastest growing economies in Asia. It is a very attractive option for investors. There are several ways in which someone can invest in Indonesia. This can be done, for example, through the stock exchange. Another option is to start your own business in the former Dutch colony. At the same time, there are also disadvantages, such as the high level of corruption in the archipelago. Read all about it in this article. Indonesia is one of the emerging economies in Asia where it is very attractive to invest. The Jakarta Stock Exchange achieved an annual return of almost twenty percent from 2007 to 2012. These are the returns that an investor is excited about. There are several reasons why Indonesia is growing so fast. With almost a quarter of a billion inhabitants, Indonesia is the fourth largest country in the world in terms of population. This makes it a very attractive sales market for foreign and domestic investors. The population is expected to grow by more than one percent annually until 2035. Furthermore, the country is located in a region where the surrounding countries are all growing at least seven percent per year. India also benefits from this.

Economy of Indonesia

The former Dutch colony is also rich in mineral resources. Indonesia has a lot of oil in its soil. In addition, it is expected that there are still many undiscovered oil treasures in the seabed. In addition to oil, the country is also rich in natural gas, copper and nickel. Other products that are frequently exported are coffee, tea, spices and rubber. This has been the case ever since the Dutch started exporting it. Exports make up no less than 28 percent of Indonesia’s Gross National Product (GNP). The Indonesian rupee is the country’s currency.

Economic growth of Indonesia

At the same time, there are also risks that could reduce economic growth. There is a creeping conflict between Muslims and the Christian minority in the archipelago. This last group is increasingly oppressed and this is accompanied by considerable tensions. Another danger is high corruption, which makes the country less attractive to foreign investors. There is a lot of money left hanging. Two other factors that can pose a danger are the underdeveloped infrastructure. Large parts of the archipelago are difficult to reach and domestic transport is also poorly organized in many places. The second factor is the average low education level of the Indonesian population. Foreign investors who need more brainpower are therefore more likely to move to a country such as Vietnam, India or China. There is a surplus of highly educated young people looking for work.

Investing in Indonesia

There are different ways to invest in Indonesia. One option, for example, is to invest in Fidelity’s Indonesia Fund. The Royal Bank of Scotland also has a separate investment fund for Indonesia. This fund tracks the performance of the Indonesia Index one-on-one. The stock exchange itself is difficult to access directly, unless you have a bank account with an Indonesian bank. Deutsche Bank also offers a so-called Tracker that directly follows the Indonesia stock exchange.

Open your own business in Indonesia

Another option is to open your own company in Indonesia. If you really want to live there, you will probably have to bribe some officials for a residence permit. You can also choose to trade through an intermediary. This is relatively easy for Dutch people because many Indonesians live in the Netherlands. Many of them still have family ties in Indonesia and many of them still speak the language reasonably well. It is therefore relatively easy to seek help if you want to trade with Indonesia or start your own business there.