Indonesia Risk

6. Country risk analysis

POLITICAL RISK

The Courting Has Just Begun US President Barack Obama's visit to Indonesia on November 9 came as Indonesia's strategic importance is on the rise, in tandem with its belated economic emergence. Indonesia was somewhat marginalised after the Asian crisis of 1997-1998, and the country experienced several years of instability and near civil war. As of 2010, Indonesia has staged an impressive economic comeback and is once again being courted by the world's major powers – principally China and the US, but also India and Japan – as part of a wider struggle for influence in the Asia-Pacific region. Indonesia's short-term political rating is 74.2

ECONOMIC RISK Car Sales Head For Record Sustained robust domestic demand for new vehicles in Indonesia has prompted BMI to revise our forecast for sales growth in 2010 upwards to 52% for the whole market. Total vehicle sales for October were up 35%, taking sales for the 10-month period up 60.7% to 622,526 units. This is already 28.7% higher than full-year sales in 2009, driven by wider private consumption growth of 5.2% in Q310. Notably, despite having one of the largest passenger car markets in South East Asia, commercial vehicles have been outperforming the industry average so far this year. Indonesia's short term economic rating is 66.5.

BUSINESS