Business Briefing: The hurdles, pitfalls and payoffs of investing in Indonesia

As Indonesia’s middle class grows, so too does demand for services and products, such as education, health and processed food. Australia is well placed to supply these, however businesses must first tackle layers of regulation and bureaucracy.

There are signs Australia and Indonesia may be moving towards a free trade agreement but this won’t address the problems not related to tariffs like specifications on labelling, marketing and competing with local firms.

What many Australian investors and businesses don’t understand is that there isn’t much rule of law in Indonesia, says Matthew Busch, a PhD candidate at the University of Melbourne who has been studying the country’s political economy. So if there’s a problem, the courts can’t be relied on to fix it.

However there are ways to avoid the pitfalls of doing business in Indonesia, as Busch explains.