RESEARCH PROJECT 2016 INDONESIA BUSINESS PROFILER

WWW.FSARESEARCHPROJECT.NL ABOUT FSA CONTENT

The FSA Research Project is one of several recurring projects INTRODUCTION 4 organized by the Financial Study association Amsterdam (FSA). The FSA is the largest financial study association in the Netherlands with over 4000 members and a project portfolio PREFACE 5 consisting of fifteen yearly events in the areas Banking, Investments, Consultancy and Accountancy. The board of the FSA consists of students from both the UvA and the VU, allowing ADVISORY BOARD 6 it to maintain a wide range of stakeholders. The FSA aspires to perform a “magnet” function; enabling financially orientated students to come in contact with the largest parties in the COMMITTEE OF RECOMMENDATION 8 financial sector and vice versa. Moreover, by participating in HISTORIE DOELGROEP one of our projects, whether national or international, we hope Startjaar: 1996 Studenten met een financiële achtergrond van to instil a sense of the practical importance of the theoretical CLIENT BENEFITS 9 de UvA, VU, DSF concepts learned during a university course in our members Sprekers and help them identify future employers. The FSA is part of 2013: Jan Peter Balkenende (Partner Ernst & Young), LOCATIE the Financial Association Netherlands (FAN), which aims to RoderickTESTIMONIALS Munsters (CEO Robeco), Pierre Sarrau 10Het Concertgebouw improve integration of the financial association and realize the (Managing Director Blackrock), Koos Timmermans (Vice- organization of nationwide events. Chairman ING), Jaqueline Cramer (ex-minister van VRM), PERIODE WHAT WE OFFER 12April All activities of the FSA are organized by students from both 2012: (DNB), Sarah Carlson (Hoofdanalyst universities of Amsterdam with an interest in finance. The FSA Moody’s), Stijn Claessens (IMF), Maarten Verwey MOGELIJKHEDEN TOT DEELNAME cooperates with a multitude of companies as well as other (EuropeseRESEARCH Commissie) EXPERIENCE 13Bedrijven financial study associations in Groningen, Maastricht, Rotterdam Deelname is mogelijk door het afnemen van and Tilburg within the Financial Association Netherlands (FAN). 2011: Jan Kees de Jager (ex-minister van Financiën), verschillende sponsorpakketten. Het leveren van een AdABOUT Scheepbouwer INDONESIA (CEO KPN), Doug Shaw (COO EMEA 14gastspreker (presentatie van ong. 30 min.) is eveneens Our slogan is “The urge to improve is what makes the difference” BlackRock), Lex Hoogduin (Directeur DNB), mogelijk, hier is een hoofdsponsorschap aan gekoppeld. and we would like to characterize our members as being Jan Maarten Slagter (Voorzitter VEB), Wim Boonstra In overleg kan gekeken worden naar de specifieke professional, ambitious and enthusiastic. The combination of (ChefeconoomCOMMITTEE Rabobank Nederland), 16wensen van de bedrijven. Daarnaast is het mogelijk om motivated students and a well-defined goal has made us what Jan Marten de Vries (Partner De Brauw Blackstone voor vooraf geselecteerde studenten een lunch of diner we are today and continues to stimulate us in being innovative Westbroek) te organiseren. in every aspect of our association. PARTICIPANTS 17 2010: Mark Rutte (fractievoorzitter VVD), Studenten Hans Hoogervorst (voorzitter AFM), Coen Teulings Studenten melden zich aan via www.fsa.nl. Voor (directeur CPB), Dirk Scheringa (ex-directeur DSB), deelname aan lunch of diner zenden de studenten ook Koos Timmermans (CRO ING), Klaas Knot (Plv. TG en dir. hun CV in. financiële markten Ministerie van Financiën) COLOPHON 2009: Nout Wellink (president DNB), Jan Kalff (oud- bestuursvoorzitter ABN Amro), Hans Hoogervorst Financial(voorzitter Study AFM), association Dick Sluimers Amsterdam (CEO APG), (FSA) Onno Ruding FSA Research Project Committee 2015-2016 Room(ex minister E 1.33/1.34 van Financiën) en Andrew Haldane (director RoetersstraatBank of Engeland) 11 Willem-Pieter Berger (Coordinator) 1018 WB Amsterdam Roos van Gaans (Coordinator) Aantal inschrijvingen van studenten Maartje Jans (Head acquisition) T:2013: +31 ong. (0)205256512 320 Boris van Minnen (Treasurer) F:2012: +31 ong. (0)20525916 350 Nicolaas Vermeulen (Chairman) E:2011: [email protected] ong. 350 Puck Voorneveld (Secretary) I:2010: www.fsaresearchproject.nl ong. 400 2009: www.fsa.nl ong. 390

Aantal deelnemende studenten Zie aantal inschrijvingen

RESEARCH PROJECT 2016 | 2 FSA InformatiebrochureRESEARCH PROJECT | 3 2016 | 3 INTRODUCTION PREFACE

The FSA Research Project is proud to present its destination for Since the start of the century, Indonesia has experienced a remarkable 2016: Indonesia. In July and August, a team of eighteen highly economic transition. Its national income per capita has risen from just talented and motivated students will conduct international $560 in 2000 to $3,650 in 2014, and poverty levels have been significantly research for companies with aspirations towards emerging reduced. This has now made Indonesia the 5th largest economic region markets. Extensive training and supervision by knowledgeable in Asia. Yet some problems still persist. Employment growth has lagged experts in the desk research phase will prepare the team for behind population increase, Indonesia’s health sector is struggling, and departure. around 10% of the population still lives below the poverty line.

The economy of Indonesia showed remarkable growth over the Indonesia’s prospects to solve these problems and continue its upward past decades and is expected to be the 7th largest economy in trajectory are favourable. Its 250 million inhabitants serve as great a the world by 2030 (McKinsey). Indonesia has been an important potential to increase its domestic production capacity and its rising middle trade country for many years due to its strategic location. class in urban areas provides an excellent opportunity for the service Furthermore, liberalization and encouragement of economic industry. Assisting this process is last year’s election of President Joko freedom by the government have improved the financial sector Widodo, who has since increased the country’s international outlook. and investment climate of Indonesia. These improvements This has already led to improved cooperation with its main regional resulted in a constant and stable GDP growth over the last 10 trading partners. However, the currently low oil prices have slumped the years, making Indonesia an attractive and promising investment country’s revenues from its dominant natural resource extraction sector. location for foreign enterprises. The most promising sectors in To realise its full potential, Indonesia must therefore diversify its economy. Indonesia are, amongst others: financial technology, harbor The government has already initiated several promising infrastructure development, infrastructure, healthcare and agriculture. projects, which will aid this transformation.

The FSA Research project is an excellent opportunity to provide The Netherlands has maintained a long and special relationship with answers to your business questions. We deliver tailor made Indonesia. Being born in Batavia (now Jakarta), I too have a special professional consultancy services and research reports for connection with this country. After the independence of Indonesia, the organizations with international aspirations. The FSA operates Netherlands has continued this unique connection. This is well illustrated on a non-profit basis, therefore, company-specific research today by the involvement of Dutch companies in the development of can be conducted at a competitive price. The quality of the Indonesia’s water works. Having entered politics after a long career as research projects is guaranteed by years of experience and a diplomat myself, I was delighted to hear that the new government careful selection of the researchers. In addition, seminars and appointed Indonesia’s ambassador to the Netherlands Retno Marsudi as language courses from knowledgeable experts are provided for its Minister of Foreign Affairs. our researchers and they are guided by the best professors the Universities of Amsterdam have to offer. I commend the FSA for selecting Indonesia for this year’s research project. Indonesia is likely to play an important role in the future of Asia, and This brochure is intended to inform you about the structure of will offer ample business opportunities for Dutch graduates of finance the FSA Research Project and how we can add value to your studies. Considering its impressive 23 year track record, I am confident business. If you have any further questions, please do not the FSA will succeed in their mission to secure challenging and stimulating hesitate to contact us. We are more than happy to provide any assignments, and that their members will experience a fruitful research additional information required. excursion.

Kind regards, Semoga Berhasil! (Good luck!)

Committee FSA Research Project 2016 Indonesia Bernard Bot

RESEARCH PROJECT 2016 | 4 RESEARCH PROJECT 2016 | 5 ADVISORY BOARD

Prof. Dr. A. Lucas Prof. Dr. S.J.G. van Wijnbergen Prof. Dr. T.L.C.M. Groot Finance Economics Management Accounting André Lucas is an expert in Financial Sweder van Wijnbergen is Tom Groot is professor Risk Management, Asset Pricing, and professor of economics at Management Accounting at the Financial Econometrics. His research the Faculty of Economics and Faculty Economic Sciences and focuses on empirical modelling issues Business at the University of Business Administration at the for market and credit risk, in particular Amsterdam. In 1997 Hans Wijers VU University. He is also head of at the portfolio level. He has published brought him in to the Ministry the department Accounting and on this topic in journals such as of Economic Affairs, where he director of the research institute Journal of Econometrics, Journal of worked as Secretary General Amsterdam Research Center in Business and Economic Statistics, until 1999. Van Wijnbergen studied physics at Utrecht Accounting (ARCA) and honorary Applied Mathematical Finance, and University and Econometrics at the Erasmus University. member of the Association of Financial Controllers. He Journal of Banking and Finance. He obtained his doctorate on economics at MIT in the US. regularly publishes in national and international magazines Between 1980 and 1992 van Wijnbergen was attached to about the performance measurement and -judgment, the World Bank, in the second half of this period as Chief management control and financial management in Prof. Dr. A.W.A. Boot Economist. His research area is focused on international commercial firms as well as non-profit organizations. Corporate Finance economics, finance, balance of payments- and financial Arnoud Boot is professor of Corporate crises. Finance and Financial Markets at the University of Amsterdam and Prof. Dr. Ir. H. Rijken Drs. L.A. van Eerden codirector of the Amsterdam Center Corporate Finance Financial Business Administration for Law & Economics (ACLE). He also Herbert Rijken is attached to Leo van Eerden is attached to directs the Amsterdam Center for the VU University as professor the VU University as a professor Corporate Finance (ACCF), a think tank of corporate finance at the at the finance department of the that seeks to stimulate the dialoque Faculty of Economic Sciences Faculty of Economic Sciences between academics and practitioners. and Business Administration. He and Business Administration. He studied Applied Physics at the TU studied International Economics He is chairman and member of various public bodies and Delft and Business Administration at the University of Tilburg and committees that help shape policy and holds a number of at the University Nyenrode. He at the moment he is working on non-executive directorships. Arnoud Boot is chairman of the has obtained his doctorate at the faculty Applied Physics his PhD at the VU University. His current research area is Bank of Council of the Dutch (DNB), member of of the TU Eindhoven. Education- and research activities mainly focused on financial crises, regulation, supervision the Scientific for Government Policy (WRR) and the Advisory are mainly focused on corporate finance, in particular on banks and system risk management. Scientific Committee of the European Systemic Risk Board credit risk and corporate governance. (ESRB) in Frankfurt. He is Research Fellow at the Centre for Economic Policy Research (CEPR) in London and at the Davidson Institute of the University of Michigan.

RESEARCH PROJECT 2016 | 6 RESEARCH PROJECT 2016 | 7 COMMITTEE OF CLIENT RECOMMENDATION BENEFITS

Prof. Dr. D.C. van den Boom For over 21 years, the FSA Research Project has conducted Rector magnificus University of Amsterdam research in a variety of emerging markets. This has resulted in an extensive network and the accumulation of valuable Prof. Dr. F.A. van der Duyn Schouten knowledge concerning this field of research. This enables us Rector magnificus VU University Amsterdam to continue delivering the required work and to end up with satisfied clients of the FSA Research Project year after year. Mr. D.R. Hooft Graafland RA Each individual research project will be customized to the Member Executive Board / needs of the participating organization with the objective to CFO at HEINEKEN N.V. completely satisfy the client. This way, we can offer:

Prof. Dr. A.H.G. Rinnooy Kan High Quality Ex-chairman Social Economic Counsil (SER) and Students conducting the research are selected based on professor at the University of Amsterdam both personal and professional performance. Primarily, these students are in the final stage of their study. Prior to Dr. M. van Straalen departure, the students carry out extensive desk research Chairman MKB-Nederland and study the sector and industry specific characteristics of the particular research subject. Because of this, the time Mr. G.T. Vinig spent in Indonesia can be fully dedicated to field research. Associate professor for Entrepreneurship at the The field research in Indonesia will last five weeks. In order University of Amsterdam to guarantee quality of the research, it will be conducted under supervision of university professors of both the VU Drs. F.W. Weisglas University Amsterdam and the University of Amsterdam. Ex-chairman of “de Tweede Kamer der Staten- Generaal” Confidentiality It is possible to manage discrete research. This means the company name and/or the results of the research will not be published or discussed publicly. Clients named in the subsequent section have given their explicit authorization.

Competitive Price Since the FSA is a non-profit organization, we are able to offer specific research at a competitive price, basedon research to be carried out by two students. The costs will rise accordingly in case the assignment requires more students.

Clarification • Expenses are based on the participation of eighteen students for a stay of five weeks in Indonesia. • Travel and accommodation expenses include airline tickets, insurance costs and transportation in Indonesia. • The organizational expenses consist of correspondence, telephone bills and brochures. • The academic supervision and the final report, which will be presented, are part of the research expenses. • Each participating student will contribute 750 EUR.

RESEARCH PROJECT 2016 | 8 RESEARCH PROJECT 2016 | 9 TESTIMONIALS

Schouten Europe B.V. (India, 2012) Fusion Electronics, Packo Inox, De Heus (Vietnam, 2015) By Hans Schouten, Chief Executive Officer Fullwood Ltd. (Argentina, 2009) By Gabor Fluit, General Director The research conducted elaborated on market potential for In 2009 a research team of the FSA research project De Heus always keeps the customers’ needs or those of the ready-to-eat soy based meals in the Indian retail- and quick explored our opportunities regarding the market for milking sector in mind whilst constantly investing in knowledge, service restaurant sectors. The vast majority of the Indian machines, electronics for milking machines and cooling innovation and quality and by knowing what is important population consists of strict vegetarians. Bearing this in mind equipment in Argentina. “We were very impressed by the to them. In light of this philosophy we were happy to the students discovered opportunities and bottlenecks for degree of professionalism of both the researchers and give young, intelligent and highly motivated students the our products. Moreover they paved a way for an entrance the end-report. In addition, the researchers picked up the opportunity to conduct a market research for De Heus strategy by gaining fruitful contacts in the top-segment of these specifics of our products and our industry very rapidly. Vietnam. Even though the De Heus’s environment (animal sectors. I am pleased with the result that the FSA students have Furthermore, it was also appreciated that the researchers nutrition) is completely different than what they were achieved. Their end conclusions and advice were very helpful, maintained good contact during this period and sent regular familiar with, the students were flexible, eager to learn and they lowered the entrance barrier for me and helped me to updates of their progress. This was due especially important quickly managed to understand what the world of a farmer start first negotiations with Indian partners. in this case, due to the fact that besides our own company looks like in order to understand their needs. After five (Fusion Electronics) there were also parties involved in weeks of intensive field research they managed to deliver Cryo-Save Group N.V. (South Africa, 2011 and India, 2012) Belgium (Packo Inox) as well as England (Fullwood Ltd.). “ a profound structured and detailed report. Their research By Arnoud van Tulder, Chief Executive Officer has confirmed some of our expectations, but also has given Cryo-Save Group N.V., Europe’s leading family stem cell bank, Rabobank International (Argentina, 2009) us new insights. New insights that will be of great value for listed on NYSE Euronext, participated in the FSA project in 2011 By Marcel Veltrop, Vice President REIF, New York the further development and implementation of De Heus’ and 2012. I was directly involved in the decision to participate As a global bank that values sustainability very strongly, digital strategy! and the selection of the students. In 2011 two students went Rabobank emphases on financing renewable energy to South Africa where we, at that time, just started a joint projects worldwide. The departments of Clean Tech Dietal Lighting Innovator, (Vietnam, 2015) venture with a local stem cell bank. In 2012 two students Research and Renewable Energy and Infrastructure Finance By Ludovic Desmarchelier, went to India where we are in business since 2008, but with Americas (New York) commissioned for the FSA researchers International Development Manager a performance behind expectations. The South African project to explore the Chilean renewable energy market and map Dietal is a manufacturer of indoor lighting based in France. focused more on external factors impacting our performance out the potential opportunities of this market and come Our turnover is 50% based on export, mainly in Europe. (awareness, reaching potential customers and marketing with an advise. “Rabobank was very pleased with the Our development strategy is focused on exploring new activities). The Indian project put more emphasis on internal extensive research that was done and the well-founded markets. After achieving encouraging results in the Middle elements like recruitment, training and communication. In both advice the students came up with. We have experienced East and the opening of a local office in Dubai, we decided countries the students interviewed customers and doctors. the collaboration with these students as very positive and to target far-east markets. Vietnam has one of the most The main reasons for me to participate in this project was to approached the students at a later stage for a similar project dynamic economies in the region, which is why we took give students the opportunity to experience how it is to work in another country.” the opportunity of the FSA Research Project to get a better abroad in non-western countries, at the same time expecting understanding of our potential in Vietnam. We worked a useful contribution how to improve our performance from REDOX Water Technology (Argentina, 2009) with two students and together we have implemented an intelligent, ambitious youngsters with a fresh, open minded By John Luppens, Area Manager, REDOX Water & recycling action plan, with one meeting being organized in France view. Also the fact that the students have to invest financially Technology and another one in Vietnam. The report they supplied gives in this project themselves was an important condition for me REDOX is a manufacturer of virtually all wastewater us a vision of the economy of Vietnam and the way of doing to say yes to this project. I was very satisfied with the outcome treatment equipment and systems. In 2009, REDOX asked business with local actors. They also provided an analysis of of these projects. The students prepared themselves very well students of the FSA Research Project to make stocktaking our sector of activity and potential companies and partners in the Netherlands (the desk research phase), and showed that of the Argentine water market. Besides this, the students we could start negotiations with. I already made one trip and they were mature and professional enough to do their field identified several potential partners for REDOX. Of which shall make a second one in January based on the contacts work locally, not always under easy circumstances in India and finally one was chosen, who still today functions as our agent provided. This is a very good base to start a prospection, I South Africa as you will understand. Also confidentiality was for the Argentine water market. “The FSA approached the recommend it. fully understood by them. I managed these projects from my market research very thorough, in addition they made use office in the Netherlands, but they frequently informed me on of all the relevant resources. Through regular consultations progress. They presented their findings to local management the research was done efficiently and in a relatively short and me verbally and in writing. This FSA project is set up in timespan. We experienced this collaboration as very such a professional way, run by very motivated and capable pleasant and we would like to participate in a follow-up students, I really recommend everybody to give these students study and/or consider conveying research in another the chance to do research for any other company. country for our Solid Waste Recycling business unit.“

RESEARCH PROJECT 2016 | 10 RESEARCH PROJECT 2016 | 11 WHAT RESEARCH WE OFFER EXPERIENCE

We conduct high quality, company-specific research in Economics and other related disciplines such as Law Over the last 21 years the Financial Study Association of partners for the joint-venture NEC Philips in Mozambique, emerging markets on a non-profit base for companies with and Social Science. We have selected twelve of the most Amsterdam has gained considerable experience in organizing Tanzania, and Kenya to distribute one of their products. In order international aspirations. promising students. foreign Research Projects. The destinations of the previous to realize this they had to plan and arrange a large variety of editions are displayed in the ‘FSA Research Project – world map’ business meetings with potential distributors in each of these What? • Final stage of study (150 ECTS prerequisite) at the end of this brochure. In each of these projects, research countries. The outcome of this research assignment was an The main objective of the project is to conduct research in • Highly motivated and ambitious assignments have played an important role. As mentioned advisory report concerning which distributors were best suited Indonesia, which can be fully customized to the wishes of • Internationally oriented before, the research can be conducted in a variety of fields. for the job. NEC Philips actually used their advice to select one of the company. Research can be conducted in several areas. • Organizational experience Examples of participating companies in the past have been: the potential partners. Examples of such areas include: • Good academic results • Team playing skills ABN Amro, Royal Philips, ABP, P&O Nedloyd, Corus, Dutch Trade Board (India, 2006) The research in India was • Market Analysis Rabobank, , Stork, DHL, TPG, performed for the Dutch Trade Board (DTB), which is an agency • Competitor Analysis Note: Participating companies are able to express their Grontmij, TNO, ING Group, Unilever related to the Dutch ministry of foreign affairs. This research was • Industry entrance analyses preference for participating students. focused on the trade relations between Dutch and Indian SME’s • Sector Analysis FMCG Supply Chain (South Africa, 2011) The goal of this in the biotech, medical, automotive, ICT and agricultural sector. • Growth strategy analyses Desk Research research was to find out who the most important players were The final report is now used by the EVD in providing information • Feasibility Analysis Desk research covers a period of approximately six months. in the FMCG Supply Chain from producer through packager about India to Dutch companies. • Identification of possible business partners The first half of this period will be used to learn about the to retailers. The mission was to find out how technologically • Background research and competitive market analyses local economy, politics, culture and language. The students advanced each industry link was, where decision power and DHL (Brazil, 2005) The scope of this research assignment was • Distribution and Logistics Research acquire this knowledge through lectures given by guest autonomy lies, how the market is evolving and which industry the Brazilian expressmarket and the interaction with the Benelux • Finance or Investment Opportunities speakers, i.e. people from business practice. During the and consumer trends in South Africa are noticeable. Shortly put, ex- press-market in particular. Furthermore they explored the • Outsourcing and Off Shoring second half of the desk research students will start the the interviews, that took the researchers from Johannesburg possibility of expanding their business. • Import and Export Analysis research for their individual business assignments. through Durban to wonderful Cape Town, were designed to help • Market Expanding Opportunities a Dutch player gain foothold if they were to start conducting any Rabobank (Russia, 2004) The FSA conducted research within the Field Research type of operations in the country. agricultural business and provided Rabobank with a qualitative How? During the Research Project, approximately five weeks industry entrance analysis of the Russian agricultural market. Before going abroad, thorough desk research will be of field research will be carried out in Indonesia. The Green Technology (China, 2010) This research identified the performed to ensure maximum preparation. Researchers information needed for these assignments will be obtained opportunities for Green Technology in the Chinese market. ING group (India, 2003) The FSA provided ING Vysya Life are offered intensive training about conducting research, by means of interviews and visits to companies and The focus was on Shanghai, Beijing and the province of Insurance with a quantitative analysis of their investment Indonesia, and relations with clients. The acquisition period institutions. The way the field research is conducted can Shandong. The research consisted of two parts. On one hand, portfolio in India. A decreasing interest rate was the reason to starts in January and as soon the client has given the final be adjusted according to the specific preferences of the the aim was to find out possibilities for doing business in China assess whether, next to bonds, investments should be expanded assignment desk research will start. During the entire participating companies. (including the legal aspects). On the other hand, it was focused to stocks. ING used the report to rebalance its investment process we will be supported by our advisory board. They on sustainability and agriculture in particular. To highlight the portfolio. can be contacted by the committee in case of questions and Reporting reciprocal investment possibilities, also a blueprint was made of will act as our consultants. After our visit to Indonesia each participating student will both these sectors in the Dutch market. Dialight corporation (Mexico, 2002) Dialight Corporation is analyze and process the information gathered during the an American lighting firm that produces and develops the LED The field research will take place in Indonesia and will last previous phases of the Research Project. The individual Synclair Packaging B.V. (Argentina, 2009) The research included Technology. LED (Light Emitting Diode) is a new technology based for five weeks. Once the participants have returned to the contributions of the participating students to the general a market-scan of the flexible food packaging industry in Argentina, on semi-conductors. The FSA Research Project was asked to Netherlands, the gathered data will be processed and the survey will then be compiled to a customized report specifying the meat industry, and the identification of possible extensively research the Mexican led Traffic Light market. In the final report will be written. The company will constantly covering the research question proposed by the client. The distributors. This was done in order to give recommendations three largest cities of the country (Mexico City, Guadalajara and be kept well-informed and updated about the project’s students will present their individual research reports to the about entering the Argentinean food packaging market. Monterrey) three students interviewed government officials, progress. The research results will be presented to the participating companies. the competition representatives, as well as other related third contracted company and, upon request, the report will be Strawberindo Lestari (Indonesia, 2008) This research parties. published. represents a study on the logistical process of PT Strawberindo Lestari’s export activities to Singapore and Malaysia. The goal Dietal (Vietnam, 2015) The FSA conducted a research assignment Student Selection of this project was to find a more cost efficient method of for Dietal Lighting Innovator, a manufacturer of indoor lighting Each year around 70 students apply for the FSA Research transportation, while preserving the quality of the products. based in France. The specific research was focused on expansion Project. These students are active in the field of Finance, to the far-east by analysing the potential of Vietnam and setting Accountancy, Management Accounting (Controlling), NEC Philips (South Africa, 2007) up a specific action plan. International Financial Economics, Marketing, Fiscal This particular research was about finding appropriate business

RESEARCH PROJECT 2016 | 12 RESEARCH PROJECT 2016 | 13 ABOUT INDONESIA

The Indonesian archipelago has been an important trade Foreign Direct Investments • Financial services. To this end, the Government’s region since at least the 7th century. With Hindu and Buddhist Foreign direct investment in Indonesia increased by 18.1 focus on maintaining and strengthening the stability kingdoms, followed by Muslims, and later Europeans, Indonesia percent year-on-year to 92,500 billion IDR in the third of its financial system over the past decade has has always been influenced by foreign powers drawn to its quarter of 2015, following an 18.2 percent rise in the been highly successful and needs to be continued. natural resources. Following three and a half centuries of Dutch previous quarter and beating market forecasts. In the latest Indonesia has made good progress in improving its colonialism, at times interrupted by French, Portuguese and quarter, the biggest investment was contributed by utility, investment climate. Formal sector employment is British rule, Indonesia secured its independence after World property and mining sectors. Singapore, Japan and the once again expanding, poverty has been falling, and a War II. Indonesia consists of hundreds of distinct native ethnic Netherlands were the top three countries with the largest broader middle-class is emerging. Less affected than and linguistic groups, of which the Javanese is most prominent. investment. Indonesia and the Netherlands maintain its neighbours by the global financial crisis, Indonesia Under the lead of Sukarno, the founding father and first close relations. Dutch businesses are making considerable has a unique opportunity during the recovery and post- president of Indonesia, the country developed a shared identity, investments in Indonesia’s fast-growing economy. recovery to increase both its global market share and defined by a national language, ethnic diversity, religious Dutch companies invest in Indonesia’s financial sector, domestic consumption. The key is to push ahead with pluralism within a majority Muslim population, and a history of telecommunications, oil and gas, hydraulic engineering and reforms designed to improve competitiveness, increase colonialism and rebellion against it. Over the last twenty years the retail sector (foodstuffs). flexibility in the labour market, and avoid protectionism there has been a lot of political instability, though the last five that stifles efficiency and innovation. There remains years show more consistency and a fast growing economy, with Promising sectors a requirement to create the institutional structures great opportunity. • Agriculture. With its vast and abundant fertile soils needed to deliver consistent policy. Global evidence Indonesia is a major global key producer of a wide indicates that strong institutions drive regulatory Economy variety of agricultural tropical products, and although reforms and improve coordination. Indonesia boasts the largest economy in the Association agriculture’s share of the country’s gross domestic of Southeast Asian Nations (ASEAN), and the 16th largest product (GDP) has declined markedly during the last worldwide. The country has recorded strong economic growth five decades, it still provides income for the majority over the past six years, and has made significant strides in of Indonesian households today. In 2012 this sector reducing the incidence of poverty. Although the Asian Financial employed around 49 million Indonesian individuals, Crisis had disastrous consequences (especially on the poorer which represents 41 percent of the total Indonesian urban segments of society), important lessons have been labour force. But although in absolute numbers the learned too. The financial system for example, which to a large agricultural workforce keeps growing, its relative extent lacked supervision and transparency, was replaced share of the total Indonesian workforce has declined by a system entailing more prudent fiscal policies in line with significantly from 55 percent in the 1980s to 45 percent international economic standards, thus fostering integration in the 1990s and currently to 41 percent. Only during with global markets. Moreover, the Asian Financial Crisis has the Asian Financial Crisis in the late 1990s this share been the catalyst for a process of political democratization grew significantly because unemployment in both the and liberalization that continues up to the present. The industry and services sectors was absorbed by the new government has pledged to enhance the country’s agriculture sector (mostly informally). competitiveness by accelerating infrastructure development, improving human resource development, and implementing • Industry. The industrial sector is the sector that currently bureaucratic reforms. contributes most to Indonesia’s annual GDP growth. The two most important sub-sectors of industry are mining and manufacturing, both being major pillars of the Economic indicators 2014* nation’s economy since the 1970s, thus being engines GDP $923.7 billion of economic change and development during Suharto’s GDP per capita $10,190 New Order regime. Although the manufacturing sub- GDP real growth rate 5.0% sector has lost its momentum after the Asian Crisis of Inflation rate 6.4% the late 1990s, it still constitutes the most popular sub- Unemployment rate 5.8% sector of Indonesia in terms of foreign direct investment Foreign Direct Investment $25.9 billion (FDI), followed by the mining sub-sector. Especially the Labour force 123.8 million cement-, textile- and automotive industry are the most Population 255 million important manufacturing sectors.

*Source: CIA World Factbook

RESEARCH PROJECT 2016 | 14 RESEARCH PROJECT 2016 | 15 COMMITTEE PARTICIPANTS

Annette de Graeff Hendrina Zijlstra Vera Ide Ella Wissink MSc Finance MSc International MSc Development BSc Economics & Business Management Economics Economics

vlnr; Willem Pieter Berger, Roos van Gaans, Nicolaas Vermeulen, Puck Voorneveld, Boris van Minnen, Maartje Jans

Abe Hendrinks Sebastiaan Geenen Yorick Schut Martijn Ophof BSc Future Planet Studies MSc Finance MSc Finance BSc Economics & Finance Willem Pieter Berger Roos van Gaans Nicolaas Vermeulen Coordinator Coordinator Chairman BSc Finance & Organisation BSc Economics & Finance MSc Strategy

Puck Voorneveld Boris van Minnen Maartje Jans Secretary Treasurer Head Acquisition MSc International Management Pre-MSc Accountancy & Finance MSc Marketing

Gijs van Keulen Floris Meijer Eveline Sintnicolaas Eline van Walsem BSc Industrial Engineering & BSc Finance & Organisation MSc Entrepreneurship & MSc Strategy Management Innovation

RESEARCH PROJECT 2016 | 16 RESEARCH PROJECT 2016 | 17 Russia 2004

Central Europe 1995

China 2010 Israel 1994

Mexico 1998/2002 Vietnam 2015 India 2001/2003/2006/2012

Singapore and Malaysia 2013

Indonesia 2008

Brazil 1997/1999/2005

South Africa 2000/2007/2011

Argentina 1996/2009 Financial Study association Amsterdam (FSA) Room E 1.33/1.34 Roetersstraat 11 1018 WB Amsterdam

T: +31 (0)205256512 F: +31 (0)20525916 E: [email protected] I: www.fsaresearchproject.nl www.fsa.nl