by Prema Nakra, Ph.D.

The Republic of Indonesia is the largest and most populous economy in Southeast Asia with 240 million people, making it the fourth largest country in the world. Located in the heart of the economic growth in Southeast Asia, it is a vast polyglot nation that stretches more than 5,000 kilometers across the equator and is made up of more than 17,000 islands.

In the first five articles in this series, I provided an overview of Indonesia, the investment opportunities that exist, the country's value proposition, and the non-tariff barriers to doing business in the country. Despite these challenges, Indonesia represents a market that cannot be ignored.

INDONESIA: A COUNTRY WITH SIGNIFICANT UNTAPPED POTENTIAL

Indonesia is unique in many ways. It is the biggest archipelago in the world, the largest Muslim-majority country, the world's third largest democracy, and a leading exporter of numerous high-value commodities such as palm oil and thermal coal. Its distinct characteristics are now coupled with political stability, self-reliance, and robust economic growth that saw the country largely shielded from the global economic crisis. Equipped with lessons from previous financial upheavals, the Indonesian economy has withstood the global financial crisis better than many analysts expected.

A 2012 World Economic Outlook report published by the International Monetary Fund illustrates that Indonesia is one of only six countries (along with Brazil, Argentina, India, China and Saudi Arabia) in the G20 that was experiencing growth 2.5% higher than pre-crisis levels. This country is bursting with geothermal energy that could power its growing economy and set an example for countries looking to develop cleaner energy sources. But confusing government regulations and other hurdles are blocking billions of dollars in potential investments.

Many world institutions and observers have predicted that Indonesia will soon migrate from being an emerging economy to an advanced economy. If the non-tariff barriers identified in this series of articles are removed, foreign direct investment will start flowing into Indonesia and help alleviate issues relating to physical and commercial infrastructure, unemployment among youth, and poverty levels.