ASSIGNMENT OF BUSINESS

ECONOMIC
THE FACT OF ECONOMIC GROWTH OF INDONESIA
AND THE CRITICISM OF THE GOVERNMENT
Young Professional 59 C
Syndicate 5, 11, 12
● Fajarina Ambarasari 29118048
● Irwin Prawira Santoso 29118052
● Ria Riska T 29118103
● Muhammad Faris Ghiyats 29118139
● Segha Relangga 29118210
● Sandi Rudiansah 29118215
● Hervino Winanda Putra 29118231
● Muhammad Hanif Hidayat 29118233
Indonesia Government Achievement
 Poverty Rate
This year Indonesia for the first-time
recorded history of poverty which
touched 9.8%, equivalent to 25 million
people with a total population of
around 270 million inhabitants. The
poverty rate according to BPS is
defined as a population that has an
income of less than IDR400,000 per
month.
For the level of income inequality
(Gini Ratio), Indonesia recorded
good results with an increase in
overall welfare, except that the
decline in the Gini ratio was only
concentrated in urban areas. In
rural areas this year there was a
slight increase from the previous
year from 0.32% to 0.324%, which
indicates that the portion of cake
for development is still uneven.
 Unemployment
Rate
Data of unemployment rates in
Indonesia since 2005 has
continued to decline until 2018,
with the proportion of
unemployment at the urban
level higher than in rural areas.
 Infrastructure Development
• Infrastructure of Connectivity
• Roads and Bridges. Road and bridge records built
in four years Jokowi-JK
• Railways
• Airport
• Harbor
• The infrastructure of Supporting Food Security
• Construction of Dams
• Construction of reservoirs by 3 ministries
• Infrastructure of Telecommunication
• The West Indonesia Network
• Central Indonesia Network
• East Indonesia Network
 Tourism in Indonesia
According to the World Travel & Tourism Council (WTTC),
Indonesia's tourism is the 9th fastest in the world, number three in
Asia, and number one in the Southeast Asia region. This also
includes foreign exchange earnings from the tourism sector which
has continued to increase since 2015 and accounts for around 10%
of total state revenues. In addition to tourist destinations and
cultural diversity, Indonesia also organized several important
events such as Asian games, Java jazz, Borobudur marathon, and
so on, which eventually invited domestic and foreign tourists to
visit
Pendapatan Devisa Indonesia dari Sektor Pariwisata (2009 – 2019E)
Criticism of the Government
The deficit in Trade balance
An important driving factor of the surge in the trade deficit in
2018 was the widening deficit in the oil and gas sector which
reached USD 12.4 billion. The increase in world oil prices
almost throughout 2018 has driven a surge in oil imports from
net oil-importer countries such as Indonesia. Indonesia's oil
and gas imports jumped from USD 24.3 billion in 2017 to USD
29.8 billion in 2018 or grew 22.6 percent. In addition to oil and
gas, the non-oil and gas sector also faces no less serious
problems. Although still a surplus, there was a sharp decline
in non-oil and gas surpluses from USD 20.4 billion in 2017 to
USD 3.8 billion in 2018 or a contraction of 81.4 percent. 75
percent of imports are raw/auxiliary materials and 15.9
percent are capital goods needed for productive activities in
the country. However, the acceleration of imports did not
only occur in the category of productive goods but also in the
category of consumer goods.
 Children in Indonesia Losing Their
Childhood
• Many children in Indonesia have lost their
childhoods due to death, chronic nutrition,
dropping out of school to early fishing.
• According to the final childhood index of End of
Childhood Report 2018, Indonesia has the fourth
worst score in Southeast Asia.
• The mortality rate of children under the age of five
in Indonesia: 26 percent.
• dropout rate and marriage of girls in Indonesia:
>12 percent.
• the level of stunting or short : 36 percent.
• The potential loss of gross domestic product
(GDP) due to stunting is estimated at IDR300
trillion per year.
 Human Resource Competitiveness
And Workforce Readiness
• The Institute for Management Development (IMD)
evaluates the competitiveness of workers in 63 countries in
the world: Indonesia had improved its ranking from 47 to 45
in 2018.
• Indonesia was still unable to compete with Malaysia and
Singapore.
• Indicators of rating appraisal of the attractiveness and
readiness of Indonesia's human resources (HR) have
declined in the past five years. While the investment rating
and quality development began to experience
improvements in the 2017-2018 period.
• Improving the quality of Indonesia's HR competitiveness is
the government's homework. Because, based on the
projection of Global Talent Crunch, Indonesia will experience
a shortage of 18 million experts by 2030. This can slow the
growth of labor in all industrial sectors.
The Uneven Economic Center
Java Island is still the center of the national
economy. Nearly 60 percent of economic
activities are on the 128 thousand km2 island.
Badan Pusat Statistik (BPS) recorded a national
gross domestic product (GDP) of IDR14.8
thousand trillion in 2018. Java's economic activity
was recorded to contribute 58.5 percent of the
total GDP or grew 5.7 percent compared to the
previous year.
Sumatra Island is on the second place as a
contributor to the national GDP of 21.6 percent.
Then Kalimantan, Sulawesi, Bali, and Nusa
Tenggara were 8.2 percent, 6.2 percent, and 3.1
percent respectively. The Maluku and Papua
contributed 2.5 percent.
Jakarta Stock Industrial
Clasification (JASICA) IDX
1. Agriculture
2. Mining
3. Basic Industry And Chemical
4. Miscellaneous Industry
5. Customer Good Industry
6. Property, Real Estate, Building
7. Infrastructure, Utilities, Transportation
8. Finance
9. Trade, Service, Investment
Based on the figure above, the highest
growth of GDP in the main industries is
information and communication, and
transportation and storage.
 Automotive is always used
every day by all people,
especially the Indonesian
people. A variety of new
variants that are always be
taken out indicate an increase
in market absorption. The
entry of a new brand from
China can also indicate a
sector that still has the power
to attract future growth.
 Another sector that good to invest
in the future is in the agriculture
sector, especially the plantation.
Crude Palm Oil (CPO) in global
consumption is growing, with an
annual average growth of around
5.3%. India and Indonesia are the
main consumers of CPO, with
consumption of 20 million tons in
2017 or around 30% of total global
CPO consumption. Global
dependence on CPO tends to
increase as soybean production
slows, tensions between the US and
China have the opportunity to
divert demand to CPO
 Pulp and Paper sub-sector can be
one alternative to invest. The level of
paper consumption in ASIA is still
very large, especially in China. The
level of paper consumption per
capita in China reaches 42 kg/year.
The demand for paper-based
products will not disappear with the
entry of the digitalization era. The
era of digitalization which made it
easy to shop online pushed the
demand for paper for packaging,
because the function of cardboard
for packaging was still very difficult
to replace by plastic
 Subsector for Retail (textile and
wearing appeal, food and
beverage, tourism) will never
disappear because it is one of the
most important things in every
human life. Every year there are
developments and growth of
retail in Indonesia by presenting
new innovations that attract all
consumers. This will increase the
profit of each retail company. The
increase in the UMR in each
region and the potential for
increased political spending will
be able to drive the growth of
public consumption.
 The survey of the Indonesia Internet
Service Provider Association (APJII) in 2017
shows internet users in Indonesia have
reached 143.3 million or about 54.7% of
the total population in Indonesia. The
average growth of internet users reached
34.7 percent from 1998 to 2017. One of the
factors that can trigger growth in the
telecommunications sector is also the
growth of affordable smartphones, for
example, Xiaomi and Oppo.
 The Sectors That Are Predicted To Grow In The
Following Year
● Trade, Service, and treatment
○ With health care, tourism, restaurant, hotel, and advertising, printing, and
media subsectors
● Infrastructure, transportation, dan utilities
○ With subsector is the telecommunication
● Consumer industry
○ With subsectors are Food and beverage
● Miscellaneous industry
○ With textile and garment, footwear, automotive and components
subsectors
● Basic Industry and Chemical
○ With subsectors are pulp and paper
● Agriculture
○ With subsector is Plantation