1. WELCOME TO OUR PRESENTATION

2. Presentation On Case Study On Indonesia—the Troubled Giant

3. Submitted To: Lecturer, Department of Marketing,
Bangladesh University of Business & Technology (BUBT)

4. Presented By
Believe Thyself
Name of students
ID no.
Intake
Section

5. Case Summary

6. Question
What political factors explain Indonesia’s poor performance? What economic factors? Are these two related?
Why do you think foreign firms have been exiting Indonesia in recent years? What are the implications for the country? What is required to reverse this trend?
Why is corruption so endemic in Indonesia? What are its consequences?
What are the risks facing foreign firms that do business in Indonesia? What is required to reduce these risks?

7. Q-1. What political factors explain Indonesia’s poor performance
Q-1. What political factors explain Indonesia’s poor performance? What economic factors? Are these two related?
Indonesia’s poor performance is explained by political and economic factors. Indonesia is the world’s most populous Muslim nation and also one of the most culturally diverse. The wealth of Indonesia is its diversity, but it is also a weakness. It can easily trouble the nation with ethnic rivalries. The transition from autocracy to democracy led to many economical uncertainties. Although Indonesia is now under a democratic rule but many problems accumulated after living for 30 years under the rule of a autocrat_ Suharto. Although the economy is growing but there are a lot of factors contributing for Indonesia poor performance.

8. Unemployment is still high at around 10% of the working population.
Growth in labor productivity has been nonexistent for a decade.
 Foreign capital is fleeing the country,
It takes approximately 151 days on average to complete the paperwork necessary to start a business. It's the sort of environment foreign investor’s withdraw from.
High level of corruption from government bureaucrats
What makes an international business even worst is the extremely poor infrastructure. 
Indonesia is an example of how political and economical factors are closely related and how they impact the international business. The challenge for the Indonesian government is to keep the economy certain while attracting foreign investments.

9. Q-3 Why do you think foreign firms have been exiting Indonesia in recent years? What are the implications for the country? What is required to reverse this trend?
The excessive red tape has driven foreign firms away. It takes 151 days for the paperwork to go through to open a business. The country will suffer because the economy is not being motivated by would be businesses. The strict policies will have to change in order for Indonesia to thrive.
After Suharto, Indonesia moved rapidly toward a strong democracy, culminating in October 2004 with the appointment of Susilo Bambang Yudhoyono, the country’s first directly elected president. The economic front has also seen progress. Public debt as a percentage of GDP fell from close to 100 percent in 2000 to less than 60 percent by Inflation declined from 12 percent annually in 2001 to 6 percent in 2004, and the economy grew by around 4 percent per annum during 2001 to 2005.
In turn, the excessive red tape translates into long lines of government bureaucrats, whose low salaries make it attractive for them to seek a bribe at every step of the business transaction, further distracting and detracting the entrepreneur from lawful business pursuits.

10. Q-3. Why is corruption so endemic in Indonesia
Q-3. Why is corruption so endemic in Indonesia? What are its consequences?
Transparency International, which studies corruption around the world, ranks Indonesia among the most corrupt, listing it 137 out of the 158 countries it tracked in2005. Government bureaucrats, whose salaries are very low, predictably demand bribes from any company that crosses their path—and Indonesia’s weakness for bureaucratic red tape means a long line of officials might require bribes. The police have been known to throw the executives of foreign enterprises into jail on the flimsiest of pretexts, although some well-placed bribes can secure their release.
One reason is that government bureaucrats’ income is extremely low. They result to bribes to make more money. Also the police are throwing foreign business owners in jail for the littlest things to make a profit off of bribes. This is driving businesses away.

11. Q-4. What are the risks facing foreign firms that do business in Indonesia? What is required to reduce these risks?
Jail time, loss of income to bribes, and long waits to establish a business are the risks that foreign firms are facing. A radical change is required to reduce these risks. Indonesia has an anticorruption drive which may or may not work
Indonesia, like many other developing countries, aside from presenting attractive opportunities also presents a variety of potential risks to which investors may be showing and exposed. These risks range from six years of political and economic turmoil, a history of civil unrest, religious conflict and the threat posed by Islamic extremist groups, socio-economic issues and the resulting effect of increased unemployment, which is estimated now to be as high as 40% of a population of 220 million and as a result rising crime.

12. The road system is a mess, half the country’s population has no access to electricity, and 99 percent of the population lacks access to modern sewerage facilities. The tsunami that ravaged the coast of Sumatra in late 2004 only made matters worse This is in addition to having to work within an environment which for the unprepared can not only is costly, but also challenging in terms of:
A poor regulatory environment and lack of transparency;
An ineffective and corrupt legal system; and
An increasingly militant labor force, with manpower laws heavily in favor of the workforce.
Indonesia remains an attractive country in which to do business in for many. In order to reduce weakness to the numerous of risks it presents; companies must take a pro-active approach to security and risk management. Doing so naturally reduces the chances of a company becoming a victim, but also minimizes the likely argue in the event an incident was to occur.

13. THE END
Thanks for
your attention
4/23/2017