Doing business in Indonesia and Malaysia

Course contents (Asia)

1. Indonesia: Introduction. Economy. Doing Business.
2. Malaysia: Introduction. Economy. Doing Business.

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Learning Unit Summary

The Republic of Indonesia is the largest archipelago country in the world, comprising 17,508 islands stretching along 5,120 kilometers from east to west, and 1,760 kilometers from north to south. The islands scatter over more than one tenth of the equator between Southeast Asia and Australia, covering a land area of around 2 million square kilometers and territorial waters nearly four time of that size. The total population of Indonesia is 203,456,005.

Exports fell, responding quickly to weakening external markets, first as a result of the bursting technology stock market "bubble" and then of the 11 September terrorist attacks in the United States (US).

With weaker prospects for exports, investment in plant and equipment has slowed. International conditions after the terrorist attacks, combined with highly publicized governance problems in the legal and judicial systems and continuing security concerns in some regions of Indonesia, have discouraged investment, especially foreign investment.

In 2003, gross domestic product (GDP) grew by 4.1%, a modest improvement over 3.7% the previous year, even though the country was hit by another terrorist attack and faced the regional problems caused by severe acute respiratory syndrome (SARS) and the conflict in Iraq. Inflation slowed to 5.1% at the end of the year, the reference interest rate fell, and the rupiah firmed against the dollar.