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INDONESIA’S ECONOMY IN A NUTSHELL t 16 The largest economy in the world h r 3 ranked in terms of average economic growth among G 20 and BRICS countries between 2007 -2016, mainly contributed by: Domestic Consumption (57%) Investment (32. 3%) Government Procurement (9. 4%) … an increasing Ease-of-doing-business index 2017 91 2016 10 9 …however, a decreasing tendency of competitiveness index 2014 2016 3 41 4 2017 36 “Needs to identify areas for deeper cooperation to assist improving competitiveness” 2

Over two decades, improvement on labor productivity—which is largely from specific sectors rather than a general shift out of agriculture—have accounted for more than of the country’s economic growth. Will have 135 million members of the consuming class. of the population lives in cities producing 86 percent of GDP. skilled workers are needed to run the economy dollar market opportunities in consumer services, agriculture and fisheries, resources, and education. The opportunities are there, wide-open and promising, for businesses and investors from China to take part in our journey towards an open and competitive economy. 3

INDONESIA’S DEREGULATION PACKAGES I SEPT 09 2015 II SEPT 29 2015 SUPPORT AND PROMOTE INDUSTRIAL COMPETITIVENESS: Simplify regulation and reduce bureaucracy. PROMOTE INVESTMENT AND GENERATING FOREIGN EXCHANGE: Simplify investment licensing procedures and incentives for exporters. V VI OCT 22 2015 ASSET REVALUATION AND ISLAMIC FINANCING ACCESS: Tax incentive for asset revaluation and incentives for real estate investments trust, deregulation on Islamic Banking. JAN 27 2016 IX ELECTRICITY INFRASTRUCTURE AND LOGISTICS: Accelerated construction of electricity infrastructure, Stabilise meat prices, and Improvements to rural-urban logistics sector, XIII AUG 24 2016 BOOST THE CONSTRUCTION OF LOWCOST HOUSING FOR THE POORER SEGMENTS OF INDONESIAN SOCIETY: Expedied and simplify the procedures and regulation and reducing the cost of constuction of low-cost housing. NOV 06 2015 OCT 07 2015 II IMPROVING ACCESS TO FINANCE AND REDUCING I PRODUCTION COST: Expand the scope of Public Business Credit (KUR), facilitation of financial services, export financing, land facilities, and incentives for electricity, fuel, and gas for industry. VII DEC 07 2015 TAX INCENTIVES AND LAND STIMULATE ECONOMIC DEVELOPMENT IN CERTIFICATION: REMOTE AREAS AND DISTRIBUTION OF PHARMACEUTICAL RAW MATERIALS: Incentives in SEZ, irrigation, electronic system (INSW) on pharmaceutical raw material procurement X FEB 11 2016 INCREASING INVESTMENT : Revised the Negative Investment List, increase protection for (MSME), and boost investment on hi-tech and capital intensive industry, and tourism. XIV NOV 10 2016 PROMOTION OF DIGITAL ECONOMY THROUGH BETTER FACILITATION AND PROTECTION OF E-COMMERCE: Create 1, 000 Indonesia technopreneurs and facilitating the use of e-commerce worth of 130 billion USD by 2020. Encourage competitiveness of laborintensive industries through tax relief under Article 21 and simplify procedure on land certification. XI MAR 29 2016 FINANCIAL ACCESS, DWELLING TIME, AND PHARMACEUTICAL INDUSTRY: Public Business Credit (KUR) on export and real estate investment fund, dwelling time standard procedure, goods storage, and development of the pharmaceutical industry. XV JUN 15 2017 IMPROVING LOGISTICS COMPETITIVENESS: enhancing the role of transportation insurance, reducing costs for logistic service providers, strengthening the Indonesia National Single Window authority and reducing the number of prohibited and restricted goods IV OCT 15 2015 WAGE SYSTEMS ASSURANCE AND LAYOFFS SECURITY: Wage system that is fair, simple and projected, and Public Business Credit (KUR) which is cheaper and extensive. VIII DEC 21 2015 BUSINESS SECURITY AND INVESTMENT OF MRO AND OIL: One map policies to harmonize the utilization of land, increase national oil production, and suport business service for aircraft maintenance, repair, and overhaul (MRO). XII APR 28 2016 EASE OF DOING BUSINESS: Enhancing the ease of doing business in Indonesia by cutting procedures, permits and costs. XVI AUG 31 2017 SINGLE SUBMISSION: Improvement of business permit system with end-to-end single submission and incentive to Special Economic Zones

85 TYPES DIGITAL ECONOMY export-import licensing procedures. 9 manual system. 76 are transformed to online system. part of the drive toward an open and competitive economy. 34/76 completed by digital signatures. Responding to the challenges of economic opening through the improvement of the livelihood. Improving the efficiency of the economy. Enhance competitiveness in view of stiffer economic competition at the global stage. Allow farmers, fishermen, young and women entrepreneurs, and SMEs to flourish and contribute better to the economy. 5

CONSUMER PROTECTION IN INDONESIA POWERLESS CONSUMER 1 National Strategic on Consumer Protection Current Situation 1 Policy Direction 80, 1 – 100, 0 (EMPOWERED) Increasing community welfare Strengthen the foundation and accelerate implementation of consumer protection in priority sectors 60, 1 – 80, 0 (CRITICAL) Creating a business climate and a more equitable business-customer relationship IKK European Union(2011) : 51, 31 40, 1 – 60, 0 (ABLE) 2 IKK Indonesia (2016) : 30, 86 20, 1 – 40, 0 (UNDERSTAND) 0. 0 – 20, 0 (AWARE) 2 LOW CONSUMER COMPLAINT BEHAVIOR 3 COMPLIANCE ENTREPRENUERS STILL LOW Number of Complaints Per 1 Million Population 3 INDONESIA KOREA Source: Ministry Trade Survey Results 2016 Source: Case Recapitulation at BPSK and Korean Consumer Agency 4 Priority Sector Food and Drug Health Services Property Telecommunication Service Transportation Electricity & Gas Know but Do not Know the Functions of Consumer Protection Agencies Do not Know the Consumer Protection Agency Source: Ministry Trade Survey Results 2016 Financial Services Electronic goods, Telematic and Motor Vehicles Basic strategy The Role of Government Facilitator: Provides correct information and educates consumers Regulator: Setting up a strong regulatory and institutional framework Executor: Practice effective oversight and law enforcement Improving the Effectiveness of the Role of Government CONSUMER PROTECTION AGENCY HAS NOT BEEN USED AND KNOWN TO THE PUBLIC Learn about and Understand Consumer Protection Agencies E-Commerce Consumer Empowerment Mental Revolution (Consumer and Business) - Indonesian consumers are smart and competitive - Business actors who have a consumer protection value Improving Entrepreneurs Compliance Purpose The national economy is highly competitive

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Public Relations Bureau | October 2017 Food and Drug Financial Services Transportation Electricity & Gas Property Telecommunication Service Health Services E-Commerce Electronic goods, Telematics and Motor Vehicles Consumer Protection Priority Target of 2019 By increasing the effectiveness of the government's role, compliance of business actors , and consumer empowerment

ASEAN with 600 mio consumers. ASEAN Strategic Action Plan for Consumer Protection (ASAPCP) 2025: to provide further detail and target of strategic measures on consumer protection Main initiatives; 1. ASEAN recalls portal: www. aseanrecalls. org 2. ASEAN Consumer Empowerment Index (ACEI) 3. Handbook on Consumer Protection 9

DIGITAL ECONOMY “The key is a good partnership between businesses and consumers, between region investors and the community around. “ is part of the drive toward an open and competitive economy. MANAGING INDONESIA’S MARKET AND BUSINESS OPT FOR THE RIGHT POLICY MIX BENEFIT FOR MARGINALIZE D CONSUMERS 10 8

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