Despite some recent headwind challenging global trade growth, Indonesia is set to remain on a positive trajectory for years to come. With a population approaching 260 million, the country will continue to strengthen its position in the region and as an important force in the world economy. Rising domestic demand, massive investments in physical and digital infrastructure, and a shift towards value-added production will provide vast opportunities for Swedish companies. At the same time, upcoming trade agreements with the world’s largest economies including EU as well as a progressive government reform agenda will drive long-term trade and investment growth.
Over the last decade few economies have expanded more rapidly than Indonesia and this study shows an unanimously positive outlook among the Swedish companies present here today. However, the total Swedish footprint in Indonesia is yet to realise its full potential. Indonesia is by far the largest economy in ASEAN with over 40 percent of total GDP. Still, less than 10 percent of Swedish FDI to ASEAN-6 between 2005 and 2015 was directed to Indonesia. Compared to major Asian investors as well as most EU peers, Sweden is lagging behind and the gap is significant.
Missing the opportunity to strengthen the presence in Indonesia today would be similar to avoiding China over the past decade – a costly mistake. As with all emerging markets obstacles and challenges to capture the growth opportunities exist, and winning in Indonesia requires a growth formula that is prepared not only to adjust to the business environment, but also to actively form it. Still, to any Swedish company with international growth ambitions, Indonesia cannot be ignored.
We hope this report will inspire a new strategic approach to doing business in Indonesia and help propel the next wave of growth for Swedish companies.