Indonesia offers a substantial labor force of over 142 million people—the largest in Southeast Asia—coupled with competitive wages ranging from $1.80 to $3.00 per hour.This combination provides significant advantages for businesses, particularly in labor-intensive sectors like textiles and apparel.
The country's well-developed manufacturing sector spans key industries, including textiles, furniture, electronics, automotive parts, and handicrafts, allowing businesses to source a wide array of products from a single location.
Indonesia is rich in natural resources like palm oil, rubber, and coal, providing a solid base for industries relying on these materials and supporting sectors such as food and beverage production.
Situated in Southeast Asia, Indonesia's location offers access to ASEAN markets and global trade routes, making it an attractive hub for sourcing and manufacturing activities.
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Weak transportation infrastructure significantly increases logistics expenses, contributing up to 23% of Indonesia’s GDP, making supply chain operations costly for businesses.
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Unpredictable transportation conditions can cause delays, stock shortages, and production disruptions, ultimately impacting revenue and customer satisfaction.
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99% of Indonesian businesses are MSMEs, yet they receive only 21.3% of total bank lending, restricting growth and infrastructure improvements.
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Inadequate infrastructure investment limits economic expansion and market accessibility, preventing businesses and the population from fully benefiting from Indonesia’s economic potential.
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Setting up a business in Indonesia requires navigating multiple agencies, extensive documentation, and slow approval processes, delaying market entry and increasing administrative costs.
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Frequent regulatory changes, varying enforcement across regions, and unclear guidelines create uncertainty for foreign businesses, impacting long-term investment planning.
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Corruption remains a challenge, with unofficial payments often expected for permits, customs clearance, and regulatory approvals, increasing operational costs for businesses.
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Favoritism and inconsistent rule enforcement can disadvantage foreign businesses, making compliance and fair competition more difficult in regulated industries.
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Rising worker demands for better wages and conditions have led to labor strikes, disrupting industries like manufacturing, textiles, and plantations.
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Regional differences in minimum wages create uncertainty for businesses, and some employers struggle with compliance, leading to disputes.
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The palm oil and mining industries contribute to deforestation, habitat destruction, and carbon emissions, attracting global scrutiny and stricter sustainability regulations.
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Increasing international environmental regulations, such as EU deforestation laws, impact exporters and businesses relying on Indonesian raw materials.
