Indonesia Country Report

With a population of 226 million and a per capita GDP of 1,280 dollars, Indonesia is South-East Asia’s largest country and one of the poorer countries in the region. Since 2004 a series of major natural disasters, including the tsunami of December 2004 and the more recent earthquakes in Nias and Yogjakarta, have imposed enormous social and economic challenges. However, economic recovery has been strong, with GDP growth rates above 5 per cent. Unemployment remains high, at 10.4 percent in 2009 with underemployment estimated at 20 percent. As recent growth is concentrated in non-labor intensive sectors, prospects of future employment growth are limited, the World Bank noting that the level and sources of growth are failing to keep pace with the growing labor force, and that Indonesian workers are becoming more pessimistic about their job prospects (). In response to the lack of economic opportunities at home, increasing numbers of Indonesian workers are looking abroad. Indonesia is a cultural and ethnic medley whose society is as interesting as its history. This immense archipelago is characterized by a unique mixture of distinct ethnic, linguistic and religious groups that have contributed to Indonesia’s rich and diverse culture. The people of Indonesia share fundamental beliefs that contribute to daily life and business practices. In order to achieve success in this market, it is vital to understand and have an appreciation of the cultural nuances that define Indonesia. Three major influences of business culture in Indonesia are the cultural environment, the geographical concerns, and the economic environment.

The cultural environment is also a factor in influencing business in Indonesia [this seems awkward given the last sentence of the previous paragraph]. Differing cultural values and religious values affect the way people interact. Indonesians tend to communicate in a subdued and indirect manner. They do not always say exactly what they mean....