“British businesses have been in Indonesia for more than a hundred years!” exclaims Adrian Short, the man at the helm of the British Chamber of Commerce in Indonesia, BritCham.
While BritCham hasn't been around for so long, it has been supporting and helping to develop British business interests in Indonesia since its inception over ten years ago. Since the early days, the chamber has grown in both size and significance and over the past couple of years, has attracted a whole range of distinguished guests and speakers, including Boris Johnson and David Cameron, among many others. NOW! Jakarta sits down with the organisation's Chairman, Mr Adrian Short, to hear updates on what's new at BritCham.
Who should join BritCham? Why? What services do you offer?
Basically, BritCham is an independent pro-business membership organisation. It doesn’t matter if you are a small business in the UK looking for opportunities or indeed an established business here in Indonesia, BritCham has something to offer. We welcome all nationalities and all professions. There are a number of different membership options available from large corporate companies to individual members. BritCham remains one of the most active chambers and we strive to provide diversity to our members, whether it’s the Professional Women’s Group, the Young Professional Group or the EU Indonesia Joint Gatherings, we aim to cater for all interests, to remain current and engage our members. Aside from the weekly events (which cover a variety of topics aimed at all business sectors with key speakers from established organisations), BritCham also holds other regular events such as the monthly business & social gathering, and bi-monthly breakfast briefings providing our members with the opportunity to network and to stay abreast of the most up to date business news.
Is Indonesia still an attractive prospect for foreign direct investment? If so, why?
Indonesia is a very attractive destination for FDI. Indonesia has the fastest growing middle class with 3-5 million Indonesians joining the consuming class annually. That is the equivalent of adding the population of Singapore to your available market every year. It has had consistent stable growth of 4-6% in the last ten years and is slated to do so for the next decade and beyond making it one of the top ten largest markets by nominal GDP by 2030. So if you are a retail brand, you have a large target market who highly value British brands and goods. Indonesia is also attractive to manufacturers as it increases its competitiveness versus the big markets of China and India. Recently we have seen a more open government stance to FDI and BKPM has recently launched the ‘One Stop Service’ in which a business can gain a license in just 3 hours- a very efficient and time-saving service. It really is a good time to look at Indonesia and take a lead on your competitors. It is not an easy market to enter, as we can see from the ease of doing business index, but, the rewards are high if you make the effort to enter Indonesia.
What are the biggest challenges faced by foreign investors in Indonesia?
Referring to the Business Confidence Index 2015 (a B2B survey of European investors domiciled in Indonesia), the top three issues that businesses raised were – bureaucracy, policy and regulation. This is compounded by contradictory and unclear regulation and not only the amount of regulation. A better legal framework and a focus on reducing regulation will ease bureaucracy and provide certainty to businesses. There is a sense that the intentions of the government are positive in dealing with these challenges, however a more coordinated focus on implementation remains pivotal to driving up the ease of doing business, which at the end of the day is vital in terms of competing with SEA neighbours. This is the first year that Infrastructure has not been in the top 3 issues and perhaps this is a sign that slowly things are improving in this area although it will take time to see the results.
What would be your main piece of advice to offer those trying to start businesses in Indonesia?
esearching the market is key in ensuring your business has the room for growth in the country. Taking time to understand the legal and tax framework before launching in the country and working with BKPM will help considerably. Finding a good local partner is also key- networking within the industry and also meeting contacts in other areas will be beneficial for long term development. Do not rush into a partnership, take time to understand what they can offer as they may not be able to fulfil their initial promises, check if they are reliable and have a good track record. In essence do your research, take advice and do not be misled by false promises that a potential partner may make.
What were the highlights of the last year for BritCham?
There were many! We were at the forefront of organising many major events including PM Cameron’s visit to Indonesia and the UK Visit Seminar in East Java and West Java. We also signed several MOUs with key institutions, KADIN Surabaya, KADIN Jabar and APKASI. Surabaya is the natural hub for East Indonesia and possibly a location for access to parts of ASEAN as the AEC develops. BritCham is particularly keen to invigorate interest in regions outside the capital. In East and West Java, GDP growth is consistently higher than the national average, land is less expensive and labour is more flexible and readily available.
What has the reception been like for BritCham's webinar series? Any topics which were particularly well received?
BritCham (OBNi) and UK Trade & Investment has continued to deliver many successful webinars. Our webinars focus on a range of key sectors such as manufacturing, food & beverages and ICT. The recent webinar (A preview of a unique visit programme to Indonesia & Doing Business in Indonesia) was a huge success. The presenters included key personnel from the Indonesian government body including the Investment Coordinating Board, the Ministry of Agriculture and the Ministry of Industry. Nearly 230 registered participants attended the online presentation, with companies from 15 different countries, taking part.
What were the most memorable social occasions on the BritCham calendar in this past year?
Personally, for me it has to the 2015 Rugby World Cup Final! BritCham and PRUI held a sports gala night to celebrate this event whilst also supporting our Giving Kids a Sporting Chance programme. The GKSC program was established by BritCham 7 years ago and has introduced sport as a vehicle for personal development for those kids who simply do not have access to organised sport. Today, well over 3500 kids have been through the programme. The night itself was a great success with a number of events including an auction of collectible rugby memorabilia, and a talk show with Cameron Shepherd, (former Wallabies rugby player) and last but not least the final match itself between the Australian Wallabies and the New Zealand All Blacks. Fund-raising at our annual sell-out Christmas Party has enabled us to commit to sustaining support of rugby development among kids. We are also open to look at other projects managed by other sports organisation.
What were the results of BritCham's Investing in Indonesia Campaign last year? How did the roadshow with the BKPM go?
You are referring to the roadshow to the UK, which went very well with positive engagement of UK businesses (from 5 key regional chambers in the UK) to seek partners in Indonesia. You will see on our website examples of success stories that are too numerous to list here. We have seen a good growth of Companies/SMEs using our business services on market research. We have built on this initiative to expand our engagement with BKPM, Kadin and others so that we can provide a quicker and slicker support to businesses in Indonesia and those looking to come to Indonesia with support and assistance.
Can you outline briefly the main challenges and triumphs of the past year at BritCham? (British businesses that have suffered / triumphed, significant regulation changes, economic slowdown etc.)
2015 was quite a tough year globally for many businesses and with Indonesia being an economy that relies on consumer spending and commodity exports it equally suffered a downturn in its GDP growth. It also took quite a large part of the year for the new government to embed itself, but by August we started to see signs of improvement both in government outlook and business confidence. If I refer to the results of our business confidence survey; 66% of businesses expect to see revenues increase in 2016; 51 % of businesses expect to see profits increase; 46% of firms hope to make major investments in Indonesia in the next two years and that has to be very good for the creation of new jobs. In fact, only 16% of businesses have a negative outlook for 2016. BritCham also set up a presence in Surabaya to help British businesses expand beyond Jakarta and supported this move through taking a number of businesses from Surabaya to the UK during the visit of President Joko Widodo to help them meet partners interested in trade and investment in Indonesia. This was my business highlight and showed how working together we can achieve real results.