1. “INDONESIA GOES BUSINESS” Jl. Jenderal Gatot Subroto No. 44. Jakarta 12190. Indonesia Telephone: +62 21 525 0023 ∙ Fax: +62 21 522 7607 Website: www.bkpm.go.id ∙ Email: sysadm@bkpm.go.idwww.bkpm.go.id Hari Baktio Deputy Chairman for Investment Cooperation The Investment Coordinating Board Republic of Indonesia Jeju Island, ROK, May 31 st 2009 1

2. 22 USA Industrial Production & Capacity Utilization AS Japan IP dan Capacity Utilization Asian Economics GrowthAsian Export Growth Significant Decrease of Economic Perfomances Suffered by USA,, Japan and Asia on the 1st Quarter of 2009

3. 3 World Economic Growth Projections in 2009 0,7 Argentina 0,3 BRAZIL 3,0 CANADA 4,0 USA 2,8 MEXICO 2,4 EU 3,7 UK 3,3 FRANCE 4,3 ITALY 5,3 GERMAN 3,3 TURKEY 5,6 RUSIA 6,6 JAPAN 3,0 South Korea 0,3 Australia Philipine 2,5 Saudi Arabia 0,7 INDIA 4,3 CHINA 6,3 INDONESIA 3,4 5,0 Singapur 2,0 Thailand 0,2 Malaysia Sources, IMF, ADB South Africa 0,8 : Growth (+): Growth (-) 3

4. 4 INDONESIA Biggest archipelago country in the world - Island : > 17.000 - Lands : ± 2 million km 2 - Sea : ± 5.8 million km 2 - Coastal line : ± 81.000 km Population 228.523.300 people Hundreds of ethnics More than 750 languages & dialects One of biggest democratic country Vast natural resources Huge potential market and competitive workforce Strategic location 6.435 Km 4

5. 5 Indonesia Situation Today Macroeconomic Indicators Reserve (Apr 09)US$ 56.56 Billion Interest Rate7. 25 % Foreign Debt Ratio (08)30.7 % Inflation yoy (Apr 09 : Apr 08) Apr 09 Inflation Jan 09 – Apr 09 7. 31% -0.31% 0.05% Market Cap (Oct08)US$ 116.7 Billion 200620072008 GDP5.5 %6.3%6.1% 5

6. 6 Unemployment No. of Unemployed :8.46% (Feb’08) Growth of Workforce p/a :2.31 M people 1% Economic Growth = 400.000 Workforce 6

7. 7 NoCOUNTRY VALUE OF INVESTMENT (US$. Million) NUMBER OF PROJECT 1Japan 21,063.71,819 2Singapore 13,537.11,106 3Mauritius 10,521.851 4United Kingdom 8,420.4510 5United States of America 7,363.4428 6South Korea 5,133.01,236 INVESTMENT REALIZATION BY COUNTRY 1990 – APRIL 2009 7

8. 8 NoSECTOR VALUE OF INVESTMENT (US$. Million) NUMBER OF PROJECT 1Metal, Machinery & Electronic Industry 1,897.2190 2Chemical & Pharmaceutical Industry 697.053 3Textile Industry 509.7288 4Leather Goods & Footwear Industry 440.586 5Food Industry 389.924 INVESTMENT REALIZATION FROM SOUTH KOREA BY SECTOR 1990 - APRIL 2009 8

9. 9 Workforce Absorption Total by the end of 2005 Addition 2006 Addition 2007 Addition 2008 Addition by the end of Feb 2009 TOTAL 253.58141.48645.31553.0237.179400.584 9

10. 10 Measures to Reform and to Improve Investment Climate Introduction of new and revisions of existing laws and regulations Institutional changes to improve overall governance as well as to enhance its competence Accelerate the development various types of important infrastructures Change of Mindset 10

11. 11 INDONESIA COMMITMENT Indonesia is pro business Indonesia is pro growth Indonesia is pro job creation Indonesia is pro to poverty elimination 11

12. 12 Economic Reform Agenda Reduction of tariff and non-tariff barriers Improving economic competitiveness through simplification of regulations, consistent enforcement of regulations, better tracking mechanism for trade activities Convening regular public and private dialogue involving all stakeholders. 12

13. 13 Features of Law on Investment 1.Equal Treatment 2.No Minimum Capital Requirement 3.Free to Repatriate Investment & Profit 4.Legal Guarantee 5.Dispute Settlement 6.Investment Services 13

14. 14 Opportunities to Invest in Indonesia Encouraging law and regulations Large amount of potential enterprises Value added target Competitive cost producer Open market-oriented economy Prospective sectors Free foreign currency exchange regime 14

15. 15 Comparative Advantages (Natural Resources) NoCommodityProductionLocation Rank in the World 1Crude Palm Oil19 million ton (2008)Sumatera, Kalimantan, Sulawesi, Papua 1 st 2Tin65 Thousand ton (2007) Sumatera 2 nd 3Cocoa770 thousand ton (2007) Sulawesi, Sumatera, Java, Kalimantan, East Nusa Tenggara 2 nd 4Copper818 thousand ton (2006) Papua, Maluku, Nusa Tenggara 2 nd 5Nickel4.35 million ton (2006)Sulawesi, Sumatera, Maluku, Papua 5 th 6Gold89 thousand kg (2007)Kalimantan, Sumatera, Maluku, Papua 7 nd 7Coal178 million ton (2006)Kalimantan, Sumatera 8 th 15

16. 16 AEC Blueprint single market and production base competitive economic region equitable economic development in the region integration into the global economy 16

17. 17 Most Prospective Countries for FDI by Japanese Manufactures Rank19972002200320042005200620072008 1China 2USAThailand India 3IndonesiaUSA IndiaThailandVietnam 4ThailandIndonesiaVietnam Thailand Russia 5IndiaVietnamIndiaUSA RussiaThailand 6VietnamIndiaIndonesiaRussia USABrazil 7PhilippinesKorea IndonesiaKoreaBrazil USA 8MalaysiaTaiwan KoreaIndonesiaKoreaIndonesia 9BrazilMalaysia TaiwanBrazilIndonesiaKorea 10TaiwanBrazilRussiaMalaysiaTaiwan 17

18. 18 FDI FLOWS TO ASEAN 18

19. 19 ASEAN FDI INFLOWS FROM KOREA 19

20. 20 MAJOR SOURCES OF FDI FLOWS TO ASEAN Rank20032004200520062007 1United KingdomJapan 2 United States ASEAN 3 United Kingdom NetherlandsUnited Kingdom 4Netherlands ASEANUnited KingdomUnited States 5 ASEANNetherlandsUnited StatesNetherlands 6Taiwan (ROC)Cayman IslandsFranceCayman IslandsRep. of Korea 7 GermanyLuxembourgGermanyBermuda 8FranceBermudaGermanyBermudaHong Kong 9LuxembourgRep. of KoreaChinaHong KongCayman Islands 10Cayman IslandsChinaRep. of Korea France 20

21. 21 ASEAN FDI INFLOWS BY SECTOR 21

22. 22 www.bkpm.go.id 22