Why this is important to Wisconsin businesses: The opening up of the information technology and health care sectors, among others, presents immediate opportunities for Wisconsin companies.
In an unprecedented move, the Indonesian government announced in February 2016 a group of sweeping reforms to liberalize its economy by opening 35 sectors to foreign investment and allowing greater foreign ownership.
Sectors that were opened include cold storage, sports centers, film processing labs, crumb rubber, warehousing, tourism, e-commerce with a marketplace value above $10 million, toll road construction, telecom device certification, non-hazardous waste management and raw medicine materials. Wisconsin, which has demonstrated strength in some of these sectors, stands to profit from Indonesia’s liberalization.
As the fourth most populous country in the world, Indonesia is considered a huge market for the health care sector in particular. With Indonesia’s health care expenditure at only 3.1 percent of GDP in 2013, the general consensus is that the market is significantly underserved. Indonesia’s fast-growing middle and upper classes, expected to double in size by 2020 to 141 million, are seeking better health care treatment and facilities.
Indonesia also has one of the most rapidly emerging digital economies in the world, as its large population of 250 million switches en masse to regular usage of technology products. Opportunities exist across the information and communications technology (ICT) sector, including in e-commerce, cybersecurity, cloud technology, online learning and e-health. Indonesia’s e-commerce market, particularly in electronic goods and online fashion, is fast becoming one of Asia’s most attractive destinations for investment.
Implementation of the reforms will have to wait till the enactment of the revised DNI Regulation (negative investment list), which is expected to take place in March 2016. The time may be ripe for Wisconsin companies to look into investment and joint-venture prospects in the Indonesian market.