Business Data
Indonesia operational risk report Q4 2016 : includes the BMI operational risk index
Investors in Indonesia face a variety of challenges that hinder the business environment in the country. Chief among these risks are the restrictions on foreign direct investment (FDI), excessive red tape associated with trading and setting up a business, a poorly skilled labour market, a disjointed and highly variable logistics network and the threats to foreign workers and businesses from crime and terrorism. Having said that, we note that there are opportunities for investment in Indonesia, which is South East Asia's largest economy. The manufacturing, oil & gas and infrastructure sectors all represent attractive options for FDI, while portfolio investment through increasingly sophisticated financial markets is a key source of capital inflows. Furthermore, businesses in Indonesia are able to make use of the country's strategic location on vital global shipping lanes, which keeps the cost of importing and exporting low. The challenges faced by businesses in Indonesia mean that the country performs moderately in the BMI Operational Risk Index, with a score of 52.6 out of 100 placing it 12th out of 35 states in the Asia region, and 83rd out of 201 countries globally.
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