How to Do Business in Indonesia
By McElroy Translation,
Austin, Texas 78701 USA
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Indonesia’s Gross Domestic Product (GDP)
for 2006 was US$364 billion (US$960 bn PPP). In 2006, nominal
per capita GDP was US$1,640, and per capita GDP PPP was
US$4,752 (International Dollars). The services sector is
the economy’s largest and accounts for 45.3% of GDP (2005).
This is followed by industry (40.7%) and agriculture (14.0%).
However, agriculture employs more people than other sectors,
accounting for 44.3% of the 95 million-strong workforce.
This is followed by the services sector (36.9%) and industry
(18.8%). Major industries include petroleum and natural
gas, textiles, apparel, and mining. Major agricultural products
include palm oil, rice, tea, coffee, spices, and rubber.
Indonesia’s main export markets are Japan
(22.3% of Indonesian exports in 2005), the United States
(13.9%), China (9.1%), and Singapore (8.9%). The major suppliers
of imports to Indonesia are Japan (18.0%), China (16.1%),
and Singapore (12.8%). In 2005, Indonesia ran a trade surplus
with export revenues of US$83.64 billion and import expenditure
of US$62.02 billion. The country has extensive natural resources,
including crude oil, natural gas, tin, copper, and gold.
Indonesia’s major imports include machinery and equipment,
chemicals, fuels, and foodstuffs.
The official language is Bahasa Indonesia,
although many government officials and business people speak
English. The official unit of currency in Indonesia is the
rupiah, which is divided into 100 sen. (Credit cards are
really only useful in large hotels, restaurants and foreign
companies, so it is inadvisable to rely solely on plastic
money in Indonesia. Travellers’ cheques and foreign currency,
particularly US dollars, can be easily exchanged at banks
across the country. If you are travelling beyond large Indonesian
centres, try to attend to your banking before you go, or
carry a supply of cash for currency exchanges.)
Post and Telecommunications
- The postal service in Indonesia is quite
efficient, particularly from large centres such as Jakarta
- International calls can be made from
Wartel (Warung Telekomunikasi) offices across the country.
- As in most Asian countries, business cards
are very useful for making introductions. Never pass or
receive cards with the left hand, as this hand is considered
- General forms of address in Indonesia are
"Pak" for a man and "Ibu" for a woman.
- It is conventional to give a light bow
of the head when shaking hands or taking one’s leave.
- Gifts, though small, are frequently given.
- Gifts are not opened when given. This
practice shows the recipient is gracious, not greedy.
- The most important thing to remember
when selecting gifts for Indonesian people is that Indonesia
is a Muslim country and therefore, alcohol and products
made from pigskin are unsuitable.
- Be particularly careful when selecting
gifts for Indonesian women, as certain items of clothing
or cosmetics may not be suitable for devout Muslims.
- Always take care to respect Muslim religious
conventions. Although most Indonesians are Muslims, Indonesia
is not an Islamic state and allows freedom of worship
to all religions. Indonesia also contains large Hindu
and Christian minorities.
- Always avoid pork and alcohol, as these
products are not consumed by Muslims.
- Avoid lunch appointments during the holy
Ramadan fasting month. This month is calculated according
to the lunar calender and varies from year to year.
- Do not schedule meetings between 11am
and 1pm on Fridays, as this is the time most Muslim people
attend the mosque.
- Never shake hands or pass or receive
objects with the left hand, as this hand is considered
- Never touch a person’s head, or point
with a forefinger, as this is considered impolite.
- Give ample time when requesting an initial
appointment with a company. An initial telephone call
should be followed up in writing with a dossier of information
on the requesting company and the purpose of the meeting.
- Always avoid adopting a didactic position
at meetings. It is better to take a low profile and whenever
possible, let your host do the talking. Never be pushy
- Do not crook your index finger to call
someone over. This gesture is offensive.
- Do not put your hands into your pockets
when talking with someone.
- No physical contact between men and women
is made in public, except a possible handshake.
- Never stand with your back to an elderly
person or a high ranking official. As you enter a room
be aware of the people who will be in that room with you.
- Always rise when your host/hostess enters
- Leaving food on your plate signifies you are impolite,
so eat all the food you are served.
- Only use your right hand for eating,
when touching someone, or handling money/papers.
- Talking is impolite while eating dinner.
Conversation is reserved for before or after the meal.
- Never show the soles of your feet/shoes
or touch anything with your foot.
- Never touch another person’s head, this
includes a child’s head (such as a pat on the head).
- Never eat while walking in public, or
chew on a toothpick. Yawning in public is inappropriate
(cover your mouth if you must yawn).
- Remove your hat and sunglasses when going
- Indonesia has a very hot, tropical climate,
so it is wise to always dress in light, cool clothing.
Most of the time formal casual clothing is suitable.
- For business meetings, both men and women
should wear a lightweight or tropical suit. Men should
wear a jacket and tie when making official calls or attending
- Indonesia is an Islamic country so care
should be taken care to avoid wearing revealing clothing.
- For certain formal occasions long-sleeved
batik shirts are appropriate for men.
- An umbrella is an essential wardrobe
component in rainy season (September - February).
- High heat and humidity require packing
enough clothing to always appear clean and fresh. You
may have to change your clothes several times a day to
maintain this look.
- Women should wear long-sleeve blouses
and skirts that cover the knee.
- Women meeting in a more formal office
should wear a suit with hosiery.
- Women are limited to clothing colors
that are muted or dark. Leave brightly colored clothing
- Men should wear coat and tie until appropriate
to dress more casually. Follow the lead of those you are
- Men generally wear dark slacks, long
sleeve and light colored shirt, and tie (no jacket).
- "Lounge suit” requires men to wear
a business suit. This term may be included on an invitation.
- Men may find in a very casual business
office that a short sleeve shirt and no tie would be appropriate.
- Women must always cover their upper arms
when wearing a casual blouse.
- Jeans may be worn for very casual, but
never shorts for men or women. Even though the climate
is warm and humid, proper attire even for very casual
appearance will always dictate your choice of clothing.
- Government offices are open between 7am
and 3pm on weekdays and are closed on weekends.
- Banks are open between 8am and 5pm Monday
to Friday, and until 1pm on Saturdays.
- Post Offices are open between 9am and
5pm Monday to Friday, and until 1pm on Saturdays.
- Department stores are open between 9am
and 9pm Monday to Saturday.
- Although not as bad as that of Bangkok,
Jakarta suffers from serious traffic problems and it is
wise to avoid scheduling business appointments during
rush hours. Plan no more than four appointments each day.
References used and further reading
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