Index of "1996 Country Commercial Guides"
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U.S. Department of State 
Indonesia Country Commercial Guide 
Office of the Coordinator for Business Affairs 
 


                        Indonesia Country Commercial Guide
                                       FY-96


Table of Contents
CHAPTER I - EXECUTIVE SUMMARY
CHAPTER II - ECONOMIC TRENDS AND OUTLOOK
CHAPTER III - POLITICAL ENVIRONMENT
CHAPTER IV - MARKETING U.S. PRODUCTS AND SERVICES
CHAPTER V - LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
CHAPTER VI - TRADE REGULATIONS AND STANDARDS
CHAPTER VII - INVESTMENT CLIMATE
CHAPTER VIII - TRADE AND PROJECT FINANCING
CHAPTER IX - BUSINESS TRAVEL
APPENDIX A:  COUNTRY DATA
APPENDIX B:  DOMESTIC ECONOMY
APPENDIX C:  TRADE
APPENDIX D:  INVESTMENT STATISTICS
APPENDIX E:  U.S. AND INDONESIAN CONTACTS
APPENDIX F: MARKET RESEARCH
APPENDIX G:  UPCOMING TRADE EVENT SCHEDULE (Subject to change)


CHAPTER I - EXECUTIVE SUMMARY

The Republic of Indonesia is one of the least known, yet most
dynamic economies in the Asia Pacific Region.  Designated as one of
the ten "Big Emerging Markets" by the U.S. Department of Commerce,
this nation is abundantly endowed with natural resources and a
population approaching two hundred million. The country has an
unbroken record of stable economic growth over the last 25 years
with prospects of continued growth in GDP averaging 6 percent
annually.

-    The latest World Bank Report has now classified Indonesia as
an Asian growth tiger, and graduated the country to lower middle
income status.  The middle class is widening and deepening. Others
have predicted that by the year 2020 Indonesia will have the 5th
largest GDP in the world.

-    Foreign investment approvals in 1994 and 1995 exceeded USD
twenty billion - double that of the highest previous year.  This is
occurring at a time when investment levels in other Asian countries
have been leveling.  The United States ranks below Japan in
industrial investment.  However, including oil and gas operations,
and financial services - not technically counted as investment -
the U.S. would supplant Japan in overall economic activity here.

-    The political economy is characterized by stable, progressive
development policies that receive accolades for enlightened macro
economic management.  A steady stream of deregulation packages
continues to liberalize the investment and trade regimes.

-    Indonesia's leadership in APEC, its strong role in AFTA, and
its long term commitment to the WTO, bodes well for modernizing the
economy.

-    Evolving privatization measures should yield billions of
dollars of sales opportunities well into the next century,
particularly in infrastructure development such as power,
transportation, telecommunications and environmental projects.
Major currency realignments have sharpened the comparative
advantage of U.S. firms.

Recognizing the unparalleled opportunities that exist in Indonesia,
we have set-up a new Commercial and Information Center to assist
American and Indonesian businesses to expand U.S. exports and
investments.  Contact your local District Office of the U.S.
Department of Commerce, the Foreign Agricultural Service or the
Asian Environmental Partnership program to learn more about the
services available to U.S. exporters and investors.


Note:  Country Commercial Guides are available on the National
Trade Data Bank on CD-ROM or through the Internet.  Please contact
STAT-USA at 1-800-STAT-USA for more information.  To locate Country
Commercial Guides via the Internet, please use the following World
Wide Web address: WWW.STAT-USA.GOV.  CCGs can also be ordered in
hard copy or on diskette from the National Technical Information
Service (NTIS) at 1-800-553-NTIS.


CHAPTER II - ECONOMIC TRENDS AND OUTLOOK


Economic Development

Indonesia is an economic success story.  In 1967, when President
Soeharto took power, it was one of the world's poorest countries,
with per capita GDP of $70 per person, half that of India and
Bangladesh.  In 1994, Indonesia's per capita GDP passed $875,
triple that of Bangladesh and more than double India's.  Life
expectancy has risen dramatically - from 41 in 1965 to 63 in 1994
- while infant mortality and illiteracy rates have plummeted.

Real GDP growth has averaged 6.7 percent per year over the last
five years.  Through a restrictive monetary policy and a
conservative fiscal stance, the government has confined inflation
to the 5-10 percent range.  With strong export performance and
manageable import growth, the current account deficit dropped from
$4.4 billion in 1991 to $3.2 billion in 1994.

Indonesia has made considerable progress in trade and investment
deregulation.  In mid-1994, Indonesia lowered investment barriers
to among the lowest in the region.  In May 1995, the government
unveiled a comprehensive tariff reduction package which covered
roughly two-thirds of all traded goods.

Further progress is needed, however, to eliminate remaining
barriers to foreign and domestic trade, to replace the outdated
commercial code, and to establish clear and transparent accounting
and auditing standards.

Indonesia's development is good news for American business.  U.S.
exports to the country have doubled since 1988, totaling $2.8
billion in 1994.  The best prospects for U.S. exporters include:
1) equipment used in the construction of infrastructure; 2)
machinery; 3) aviation equipment; 4) agricultural products, both
for consumption and as manufacturing inputs; and, 5) household
consumer goods.


Non-Oil and Gas Exports

Indonesia has drastically reduced its dependence on income from
petroleum exports. In 1984, the oil and gas sector contributed 70
percent of export earnings and 65 percent of government revenues.
By 1994, these figures were cut to 24 and 22 percent respectively.

Non-oil and gas exports grew by about 20 percent annually from 1986
to 1993.  The first two quarters of 1994 saw a drop in non-oil
exports due to fall-offs in two of the biggest traditional
commodities -- plywood and textiles.  The decline in plywood
exports was due to inflexibility in Indonesia's marketing system
while the fall off in textiles came as a result of a drop in world
prices.  However, exports rapidly bounced back with sharp increases
in higher value-added products.  For the 12-months ending in June
1995, non-oil exports should be back to the 16 percent targeted
growth.


Investment

Overall investment levels are high, averaging about 27 percent of
GDP.  The value of investments approved by the Capital Investment
Coordinating Board (BKPM), which approves domestic and foreign
investment projects outside the oil and gas and financial sectors,
increased sharply in 1994.  The value of foreign investments
approved by BKPM more than doubled -- to almost $24 billion --
while the value of domestic investment approvals increased by over
30 percent to $25 billion.  The first six months of 1995 showed
continued rapid growth in investment approvals, especially
significant as investment is stagnating in neighboring ASEAN
countries.  [Note:  Historically, about one-third of investments
approved by BKPM are implemented.]

Most approved investments in the past five years have been in
manufacturing, especially in the chemical, textile, pulp and paper
industries.


Government Budget

FY 1995/96's $35.3 billion budget is about 12 percent larger than
the budget for FY 1994/95 in nominal terms, but only about 2
percent larger in real terms.  Long-held policy continues that the
government must maintain a balanced budget in the sense that
expenditures may not exceed domestic revenues plus foreign
assistance receipts.

The authorities have concentrated on improving non-oil tax
collections and decreasing dependence on foreign assistance.
Income and value added taxes are slated to contribute 46 percent of
total FY 1995/96 revenue versus 39 percent in FY 1992/93.  About
$5.3 billion in foreign aid in FY 1995/96 will provide 15 percent
of total receipts, down from 18 percent in FY 1992/93.

Foreign debt service and personnel expenses account for about 43
percent of expenditures; development activities take up another 40
percent.  The 1994/95 state budget is likely to record a small
surplus as the result of higher-than-expected oil prices and
foreign assistance receipts.

In 1994, Indonesia reduced its highest marginal income tax rate
from 35 to 30 percent, in a move designed to keep it competitive
with its Southeast Asian neighbors.  The Department of Finance
expects the change to slow the rate of growth of income tax
receipts in FY 1995/96.


Foreign Debt

Indonesia's external debt at the end of 1994 was about $88 billion
of which approximately $59 billion was official.  Most of the
government's foreign debt is medium to long term, predominantly on
concessional terms from multilateral and bilateral donors.  The
government services its debt fully and has no plans to seek a
rescheduling.  Although the debt service ratio is high at about 31
percent, if the country can maintain strong growth of non-oil
exports, it is expected to decline.  The government formed a
ministerial level foreign commercial borrowing review team (PKLN)
in late 1991 to control projects financed through state banks or
with other public sector participation.  The team postponed some
major projects and established annual borrowing ceilings for
state-owned enterprise projects and banks.  These measures appear
to have stemmed the growth of foreign commercial debt.


Principal Growth Sectors

Indonesia's structural changes are developing a marketplace that
American companies seeking export opportunities should not ignore.
In 1994, bilateral trade between Indonesia and the United States
reached $9.3 billion.  U.S. exports rose slightly to $2.8 billion,
while U.S. imports of Indonesian products grew by 20 percent to
$6.5 billion.

Aviation:  Being a nation of islands, Indonesia has long depended
on water transportation for moving virtually all its commodities
and people.  However, the recognition that air transportation is
the only practical way to tie the country together as an economic
entity has spurred concerted efforts to develop a modern air
transport system.  Government authorities also recognize that
tourism could well become the largest industry of the nation if
they are able to provide an air transport system that can handle a
substantial volume of visitors. Improved air transport will also be
necessary for the outlying areas to improve their standards of
living.

Of the 400-plus air strips in the country, only 26 can accommodate
planes of a significant size (DC-9/B-737 and larger). Most of the
rest are suitable for only light single or twin engine aircraft but
are located in areas which could be developed if better access were
provided.  Indonesia expects to establish 9 new international
gateway airports in the near future and is in the process of
planning how best to expand another 7 airports.  At present, the
total number of passengers that move through the system stands at
around 15 million per year.  The objective is to accommodate over
50 million annually by the year 2000.

Telecommunications:  Indonesia is embarking on an ambitious program
to expand and modernize its telecommunications network by the end
of REPELITA VI (March 1999).  The Department of Tourism, Post and
Telecommunications (PARPOSTEL, by its Indonesian acronym) has set
a target to install at least five million lines by the end of
REPELITA VI.

The state-owned telecommunications company, P.T. Telkom, will
construct three million lines in the Jakarta and Surabaya municipal
areas, while the private sector (foreign operators and local
companies) is tasked with installing nearly two million lines in
the rest of Indonesia.  A consortium headed by U.S. West was
awarded a contract to install 500,000 new lines in West Java, while
consortia including French and Japanese firms won contracts for the
other four regions.

In addition to expanding its terrestrial communications system,
Indonesia, the first developing country to own a satellite, is
scheduled to launch the first of its PALAPA-C satellites in 1996.
INDOSTAR-1, a direct broadcast satellite owned by a private
consortium, will start operations in early 1996.  Pasifik Satelit
Nusantara (PSN) has joined with Filipine and Thai entities to
install a regional satellite system (Ades).

About 600,000 cellular lines, expected to be in operation by the
end of the decade, will employ GSM, and a digital form of AMPS
(Advanced Mobile Phone Systems) will be used along with expansion
of existing analog and fixed cellular systems.  Microwave,
submarine cables, and low-earth orbiting satellites will also be
used extensively to link more remote areas.

Transportation:  Much of the land transport infrastructure is in
need of expansion.  The rail system is largely single track, and
trains can safely operate only at fairly slow speeds.  Seaports are
crowded, shipping delays are common, and water depths are
insufficient to handle the fourth generation line-haul ships in use
across the Pacific.

The road system is clogged in most areas, impossibly so in urban
areas. Although the importance of mass transit is well understood,
the high cost of constructing, outfitting and maintaining such a
system has inhibited serious progress in this area.  Recognizing
that real economic progress will depend on solutions to these
problems, the Government of Indonesia has recently decided to allow
private participation in the construction and operation of several
key infrastructure projects.  For example, GOI officials are
currently working with the private sector to develop subway and
light commuter rail projects in Jakarta.  While the actual
implementation of this policy will take time to unfold, it can be
expected that such projects will offer substantial commercial
opportunities for the next 20 years.  The GOI is also embarking on
a number of ambitious toll road construction projects, the total
value of which is estimated at $2.8 billion.

Private Power:  During the current five year development plan
(1994/95 to 1998/99), the Government plans to build 12,000
megawatts of power plants and has specified a number of power
plants to be built, owned and operated by the private sector.
Private power operators may also submit unsolicited proposals for
consideration by the Government.  By early 1995, 15 proposals had
received letters of preliminary approval, meaning that companies
were to prepare full feasibility studies.

More than half of the 300 megawatts of electricity produced from
geothermal sources comes from plants operated by two U.S.
companies, Unocal and Amoseas.  These firms operate as contractors
for the state oil company, Pertamina.  In December 1994, three
U.S.-Indonesian joint venture companies signed power purchase
agreements and joint operating contracts to become the country's
first ever independent geothermal power projects.  The companies
are committed to develop an initial 230 megawatts by 1998, with
total capacity eventually reaching 680 megawatts.  In addition,
Unocal is planning to bring 165 more megawatts of geothermal power
on line by 1998.

In February 1994, after two years of intense negotiations,
Indonesia's state electricity utility, PLN, signed its first major
power purchase agreement for electricity to be generated by a 2X600
megawatt coal-fired steam power plant at Paiton in East Java.
Several other agreements are now under negotiation.

Manufacturing:  Manufacturing accounts for about a 22 percent of
GDP and, since 1991, has exceeded agriculture's contribution. About
85 percent is non-oil and gas manufacturing which has been boosted
by strong export growth; production for the expanding domestic
market has also increased.  Textile and apparel exports now yield
over $6 billion in foreign sales annually; plywood exports exceed
$3 billion.  Exports of footwear and electric apparatus exceeded $4
billion last year and are growing rapidly.

The government is interested in encouraging local production of
goods derived from Indonesia's natural resources.  Significant
investments are being made in petrochemical industries; the
government has imposed high taxes on exported logs, raw and
semi-finished rattan, and sawn timber to encourage downstream
processing.  The taxes have had the effect, however, of distorting
prices and encouraging inefficiency in forest-based industries.

Oil and Gas:  The oil and gas sector, including refining,
constitutes about 11 percent of GDP.  Indonesia produced an average
of 1.5 million barrels per day (b/d) in 1993.  This production rate
was slightly higher than the previous year's output.  Conoco's new
Belida field in the Natuna Sea was largely responsible for this
rise in production.

Crude exports declined 3 percent to 776,000 b/d, reflecting
continued growth of domestic consumption.  Consumption of petroleum
fuels rose 7 percent to 262 million barrels.  Consumption of diesel
(gas oil) fuel for transportation and power generation rose 11
percent.  Overall consumption had grown 8 percent in 1992,
including a 13 percent increase in the use of automotive and
industrial diesel.  However, a substantial price hike in 1993,
combined with efforts to employ other energy sources for power
production, slightly dampened demand.  Receipts from oil and gas
exports declined 9 percent to $9.9 billion.  Nonetheless, this
amount still accounted for more than a quarter of Indonesia's
export receipts.

Natural gas production grew 3 percent to 2.7 trillion cubic feet,
or more than seven billion cubic feet per day.  Petroleum analysts
forecast continued growth.  Indonesia's two liquefied natural gas
plants also increased production by 3 percent.  A sixth train came
on stream at one of Indonesia's two LNG plants in late 1993.  The
plant's operators are considering installation of two more trains
to process gas from large fields discovered by the French firm
Total in the Mahakam River delta.

Most companies operate in the upstream oil sector under production
sharing contracts.  Approximately one hundred contractors are
exploring a million square kilometers of sedimentary basins.  In
early 1994, the Government issued the fourth oil incentive package
designed to stimulate exploration in under explored areas of
(particularly Eastern) Indonesia.  However, the level of
exploration declined in 1994.

After several years of high-level negotiations, Esso Indonesia and
the Indonesian government signed a production sharing contract for
the $35 billion Natuna gas contract.  The next step will be to
obtain marketing agreements with East Asian buyers.  After this,
Esso will undertake engineering work, infrastructure development,
and platform, pipeline and LNG plant construction.  Natuna's
estimated reserves stand at 210 trillion cubic feet, including 60
trillion cubic feet of recoverable hydrocarbon gas.  After
development, production facilities will treat more than 10 billion
cubic feet of raw gas per day to produce about 15 million metric
tons of LNG per year.

Mining:  The mining sector is an important element of the
Indonesian economy.  In 1993, the value of Indonesia's minerals
production jumped 21 percent to $3.6 billion, or 2.5 percent of
GDP.  In 1985, the sector contributed only 1.1 percent of GDP.
Exports of mineral products in 1993 were $1.46 billion, or 4
percent of total exports.  However, this represented a full 65
percent increase over 1991 exports and was more than double the
$503 million, or 2 percent of total exports, exported in 1990.
This large increase in value is due to rapid growth in exports of
copper ore and, in particular, coal.

In 1993, P.T. Freeport Indonesia produced 22.7 million metric tons
of copper concentrate.  Freeport will begin construction of a $550
million copper smelter near Surabaya to produce approximately
200,000 metric tons of copper cathode per year, beginning in late
1998.  The company also plans to increase its copper, gold, and
silver production.

Coal exports, which were only $168 million in 1990, stood at $645
million in 1993, or 44 percent of mineral sector exports.  Total
volume of exports rose 12 percent to 18.2 million metric tons.
Total production grew 23 percent to 27.5 million metric tons.
Private companies mine nearly three quarters of Indonesia's coal.
Production in 1994 probably reached 30 million metric tons.
Domestic power demand will encourage even greater production during
the rest of the decade: this increased production could reach 70 to
80 million metric tons.

Agriculture:  The agricultural sector, which accounts for about 18
percent of GDP and employs about half the labor force, remains a
top priority for the government.  Farms are small (0.5 hectare on
average); a high percentage of farm crops is consumed on or near
the farm.  Rice, the staple food for most Indonesians, is the major
crop.

In 1994, agricultural production was adversely affected by a
prolonged drought across Java and parts of Sumatra.  According to
the GOI, rice production declined 3.69 percent from the 1993 level,
forcing the country to import an estimated 1.7 million tons to
replenish stocks.  Imports of rice are expected to continue through
1995 until rice stocks can be replenished.  Due to unfavorable
weather in late 1994, the planting of the first rice crop was
delayed by 6 weeks in most areas, thereby placing pressure on the
final outcome of the rice crop in 1995.  Production of secondary
crops also faces slight declines.

Important estate crops include rubber, vegetable oils, and tea.
Cocoa, coffee and sugar are grown primarily by small holders.
Leading agricultural exports are wood products, rubber, fisheries
products (primarily shrimp and tuna), palm oil, cocoa, spices, and
coffee.  The government encourages production of export crops and
domestic processing of agricultural products.

With the GOI's emphasis on improving and diversifying the
nutritional intake of Indonesian diets and developing export
products as well as Indonesian's growing per capita income,
opportunities for U.S. agricultural bulk commodities and food
products are increasing.  Key commodity opportunities include
cotton, soybeans, soybean meal, corn, wheat, tobacco and forest
products.

U.S. agricultural exports to Indonesia reached $504 million in CY
1994, up 40 percent from the previous year level.  U.S. bulk
agricultural commodities increased 34 percent in CY 1994,
intermediate products increased by 50 percent, and
consumer-oriented food products were up 78 percent.  As a result of
the extraordinary growth in U.S. agricultural trade to this
country, Indonesia is now the nineteenth largest agricultural
market for the United States.

Feed grains continue to be one of the fastest growing
opportunities, a consequence of the rapid expansion and
commercialization of the domestic livestock sector.  Imports of
U.S. consumer-oriented products have increased 500 percent over the
past four years, despite tariffs that range from 15-30 percent.  A
deregulation package issued in June 1994 reduced tariffs on many
agricultural products and provided new opportunities for American
exporters.

Current leaders in the consumer-oriented product imports are fresh
and processed fruit and vegetables, meat, dairy products and snack
foods.  U.S. products are considered the highest quality, and
nearly all U.S. consumer-oriented products are in high demand by
the expanding middle and upper classes.

Environmental Protection:  Concern for the condition of the
environment is relatively new in Indonesia. The creation of a
Ministry for Population and the Environment, followed by the
Indonesian equivalent of the Environmental Protection Agency
(BAPPEDAL), however, has helped raise people's  awareness of
environmental concerns.  A number of non-government organizations
involved with environmental issues have also helped in this effort.

The market for environmental equipment is currently small, but it
is growing. The government is beginning to put some real teeth into
their penalties for violations of environmental standards, and
projects financed by international financial institutions have high
environmental standards.  Water quality remains a primary concern,
so manufacturing facilities with substantial outflows of fluid
wastes have become a target for investigation and enforcement
activities.

Air quality is also an issue, given the reliance on coal-fired
electric plants.  Automotive emissions concerns will probably lead
to new standards, catalytic converters and unleaded gas.

Another aspect of this increased environmental awareness is leading
to an examination of demand side power management as a means of
reducing electrical consumption.

Money and Finance:  Deregulation packages on banking and the stock
market issued in 1988 spurred rapid growth in both industries.  The
number of banks doubled, and the number of branches tripled from
1988-1993. At the end of 1994, total deposits stood at Rp 168
trillion ($76 billion) while outstanding credits totaled Rp 188
trillion ($85 billion).

Five state-owned banks account for about half of the outstanding
credits.  In 1993 and 1994, it became obvious that non-performing
loans made up a substantial portion of the loan portfolios at the
state banks.  The situation does not pose an immediate threat to
the stability of the financial system because depositors and other
creditors of the banks believe, probably correctly, that the
government will guarantee the banks' liabilities.  The Ministry of
Finance and Bank Indonesia may announce some kind of restructuring
plan in 1995 to restore confidence in these institutions.

While the state banks have concentrated on restructuring,
Indonesia's private banks have picked up the slack, growing by an
average 38 percent in 1994.  A number of observers became concerned
that certain of these banks might be over-exposed to the booming
real estate sector.  At the end of the year, the Governor of the
Central Bank urged the banks to curb their real estate lending.

Average daily trading volume on the Jakarta Stock Exchange (JSE)
increased from 27,000 shares in 1988 to 21 million shares in 1994.
The number of listed companies grew  from 25 in 1988 to 231 in
1994.  Prices on the JSE Index rose by more than 100 percent in
1993 before falling 24 percent in early 1994 in reaction to rising
interest rates in the U.S.

Money supply (M2) grew by 20 percent in 1994, in line with the
target of Bank Indonesia, the Central Bank.  At the end of 1994,
interest rates paid on deposits stood at about 14 percent, while
lending rates were in the 17-18 percent range.

The Indonesian currency, the rupiah, is on a managed float,
depreciating slowly against a basket of trading partner's
currencies.  Economists do not believe that the rupiah is subject
to the same kind of sudden devaluation that the Mexican peso
experienced in early 1995.  Indonesia's current account is a
readily manageable 2.1 percent, largely funded by long-term and
concessional borrowing, as contrasted with Mexico's 8 percent
deficit, largely funded by volatile portfolio investment.

U.S. firms can enter the banking and securities markets by forming
joint ventures with Indonesian firms.  Foreign joint ventures are,
however, subject to discriminatory capital requirements.


Government and the Economy

Indonesia has a free-market economy which is dominated by the
private sector.  The government does play a role in the economy,
however, through state-owned firms and the imposition of price
controls in selected industries.

The public enterprise sector in Indonesia represents an estimated
15 percent of GDP and employs about 1.2 million people (1.4 percent
of the labor force).  The share of the 181 state-owned firms in the
economy has declined gradually as a result of strong private sector
growth.

Most state enterprises are in industry (23 percent), followed by
agriculture (19 percent), finance, public works and transportation.
According to a World Bank study, the presence of state-owned firms
tends to stifle competition. Industries with higher public sector
involvement have significantly higher concentration ratios, and
many non-tariff barriers are found in industries where state-owned
enterprises play an important role.

Although the government is committed to privatizing many of the
state-owned enterprises, progress has been slow.  In 1994, Indosat,
the international telecommunications firm, was listed on the New
York Stock Exchange.  P.T. Telkom, the domestic firm, is expected
to follow in 1995.

The government imposes price controls on a number of products that
could be supplied by a competitive market, including fuels, cement,
fertilizer and transport services.  The government also takes
actions designed to influence the price of a number of agricultural
products, including rice, wheat, sugar and soybeans.


Balance of Payments

Indonesia enjoys a substantial trade surplus.  It has a current
account deficit equal to about 2.0 percent of GDP, however, due to
interest payments on its large foreign debt.  The size of the
current account deficit has dropped in recent years, from $4.4
billion in 1991 to an estimated $3.2 billion in 1994.

In 1994, total exports exceeded $39 billion and non-oil and gas
exports topped $30 billion, up 11 percent over the preceding year.
Imports grew by 12 percent to $31.6 billion.

Financing remained more than adequate.  In 1994, foreign assistance
flows plus loans/guarantees from export credit agencies reached
$6.1 billion, while principal payments on official debt came to
$5.4 billion.  Other net capital flows, principally private direct
investment and private borrowing, fell from a record $5.4 billion
in 1992 to $3.5 billion in 1994.  The government added almost a
billion dollars to its official foreign exchange reserves, bringing
the total to over $13 billion.



CHAPTER III - POLITICAL ENVIRONMENT


The Political System in Brief

Under the 1945 Constitution, supreme governmental authority in
Indonesia is vested in the 1,000-member People's Consultative
Assembly (MPR), which meets every five years to select the
President and Vice President and establish the broad outlines of
government policy for the next five years.  Half of the MPR's
members come from the partially elected Parliament (DPR), and the
other half are appointed by the government.

Of the 500 members of the DPR, 400 are selected through nationwide
elections held every five years, and 100 are active duty members of
the armed forces (ABRI) appointed by the military.  The number of
appointed members in both the DPR and the MPR will drop by 25 in
the 1997 election cycle.  Parliaments also exist at the provincial
and district level.  The last national and local parliamentary
elections were held in 1992; the next will be held in 1997.

Only three political groupings are permitted by law.  The largest
party is Golkar, a government-sponsored organization of diverse
functional groups which won 68 percent of the vote nationwide in
the 1992 polling.  Virtually all civilian government employees
belong to Golkar, which holds an absolute majority in the DPR and
all provincial and district parliaments.

The United Development Party (PPP), a Muslim-oriented grouping, and
the Indonesian Democratic Party (PDI), a collection of former
nationalists and Christians, split the remaining 1992 vote.  The
activities of all three parties are tightly controlled. Under
current government doctrine, no "opposition" parties are allowed.
All three parties, as with all registered social groupings in
Indonesia, must embrace the state ideology called Pancasila, which
includes belief in a supreme God, a just and civilized humanity,
national unity, democracy and social justice.  All three parties
also promote policies which favor national economic development.


Relations with the U.S.

Relations between Indonesia and the U.S. are good.  The U.S. played
a key role in helping Indonesia win independence from the
Netherlands in the late 1940's. The U.S. maintains cordial and
cooperative security arrangements today, although the two countries
are not bound in any formal security treaties.

The U.S. has provided a steady but shrinking stream of development
assistance to Indonesia since independence.  U.S. companies were
among the first to invest in Indonesia following the 1965 abortive
coup and the birth of the New Order government under President
Soeharto.

The U.S. values close relations with the world's fourth most
populous country.  This is in part because of its growing economy
and markets, its strategic location astride a number of key
international straits, and its moderating influence in regional and
international bodies such as the Asia Pacific Economic Cooperation
(APEC) and the Non-Aligned Movement (NAM), which Indonesia chaired
until September 1995.

The U.S. also appreciates Indonesia's contribution to maintaining
regional stability through its membership in the Association of
Southeast Asian Nations (ASEAN), its leading efforts to end the
Cambodian conflict, and its continuing interest in resolving
conflicting claims to the South China Sea.

Indonesia values its growing access and success in U.S. markets,
the security provided by the continuing U.S. military presence in
the region, and the role played by U.S. investors and businessmen
as a counterweight to Japanese economic influence.

Friction points in the bilateral political relationship in recent
years have centered on human rights, especially in the province of
East Timor, and labor rights.  The U.S. Congress cut off military
training assistance to Indonesia in 1992 in response to a Nov. 12,
1991 shooting incident in East Timor involving Indonesian security
forces and peaceful Timorese demonstrators.

Other concerns have been expressed about military excesses in the
provinces of Aceh and Irian Jaya, where small insurgencies have
been active in recent years, and in other parts of the country
where Indonesians feel human rights and due process are frequently
violated in an effort to maintain security.  President Soeharto
ordered a number of changes after the East Timor shootings and in
the last several years there have been signs of increased
accountability of military personnel for abuses of the civilian
population.

On labor rights, Indonesia was the target of two 1992 petitions
filed under Generalized System of Preferences (GSP) legislation.
The petitions argued Indonesia did not meet recognized
international norms for labor relations because of excessive
military involvement in legitimate labor activity and severe
restraints on the right to organize a union.  A formal GSP review
was suspended in February 1994 without terminating GSP benefits for
Indonesia, but progress in improving workers' rights continues to
be monitored.


Political Stability

For the past three decades, President Soeharto, whose current term
ends in 1998, has ruled unchallenged with the support of the
military.  Under a "dual function" concept that justifies military
involvement in the social and political life of the nation, the
military holds many key civilian government positions and
parliamentary posts.  However, the number of military in such posts
has been on the decline during the last decade.

Soeharto is only the second president of Indonesia in nearly five
decades, and the mechanisms that are supposed to guide the
presidential succession process are essentially untested. No
obvious replacement to Soeharto, who is 74, is currently visible.
These factors make the succession issue a key one in assessing the
future stability for business ventures, both because of Soeharto's
relatively pro-business policies and because of the political
uncertainties involved.

Other stability factors with business implications are ones that
are related to perceived inequalities in income and rising
complaints over labor issues, especially the continued failure of
a number of employers to pay the legally mandated minimum wage,
despite stepped up government enforcement efforts.  These issues
could lead to localized problems; more widespread upheavals appear
unlikely, however, for the foreseeable future.



CHAPTER IV - MARKETING U.S. PRODUCTS AND SERVICES


Distribution Channels

Generally, import/export, wholesale and retail distribution have
been reserved for Indonesian companies (defined as at least 51
percent Indonesian owned). The one exception, foreign investors
importing raw materials for use in manufacturing, may not
distribute their product in the domestic market.


Representatives and Agents

Foreign companies may open and maintain a local representative
office with the permission of the Indonesian Department of Trade.
The representative may be an Indonesian company, an Indonesian
individual, or a foreign national, but only one trade
representative office is permitted. Trade representatives are not
permitted to engage in direct sales but may engage in sales
promotion and marketing or provide market research and technical
advice.

The services of an aggressive, active agent are an important means
of expanding sales in Indonesia. Many foreign firms and trading
companies have opened up trade representative offices in Indonesia.
Some of these have expatriates on their staffs. In many instances,
representative offices of foreign companies have established close
connections with Indonesian national importers, allowing the two
companies to operate virtually as one. The Indonesian company acts
as import distributor for overseas principals and the foreign
company promotes products and, if necessary, provides technical
assistance.

Until the 1970s, the government did not require the appointment of
an agent except when importing fertilizer and specific types of
heavy equipment. Since December 1970, the import of certain types
of heavy equipment, including road rollers, hoisting and lifting
apparatus, and tractors and cement-mixing machines must be handled
by a national franchise holder or sole agent.

Sole agency relationships have also been required for motorcycles,
cars, and trucks. At the end of 1980, in order to spur the
development of indigenous enterprise, particularly new, small,
economically weak enterprises, the government began requiring the
state oil company and other government agencies to deal through
Indonesian agents when purchasing imported goods or services. The
government also began putting pressure on agents to deal directly
with foreign manufacturers rather than third-country middlemen. For
these reasons, a foreign firm selling to government agencies would
do well to appoint an Indonesian firm as its agent.

Traditionally, Indonesian importers have not specialized in
particular product lines. It is generally advisable to set up
agency arrangements with firms that handle a complementary range of
products. These are not essential, however, since substantial sales
can often be made by firms active in quite different product lines.
An increasing number of firms identifying themselves as suppliers
of "technical goods" concentrate on general industrial machinery
and equipment. These  firms often have engineers on their staff and
are prepared to provide engineering assistance and after-sales
technical support.

The main difference between a representative office and an agent is
that an agent can perform all trade activities and is allowed to
have several offices throughout Indonesia. After an agent has been
appointed and a trade representative office is established with a
foreign employee, the expatriate can be assigned to and become
employed by the agent. This procedure effectively permits the
foreign firm to meet the legal requirements of the Indonesian law
and still allows the foreign firm to have a more direct hand in
selling its products.

In many cases, a separate agreement is signed between the
expatriate personnel and the foreign employer to regulate this
relationship. The tax liability of the foreign firm is limited to
the income tax of the expatriates assigned to the representative
office, while any other taxes are assessed to and borne by the
agent.

Cooperation under a management agreement allows the foreign company
in Indonesia to play a more active role. The types of management
agreements are: (1) technical assistance agreements; (2) management
agreements; and (3) management agreements coupled with financial
agreements.

The technical assistance agreement limits the foreign firm's
function to providing technical assistance to the Indonesian
company. The management agreement allows the foreign firm to manage
the company or a division within the company. In the management
agreement coupled with a financial agreement, the foreign firm also
finances the Indonesian operation, either under the name of the
Indonesian company or a division thereof.

Remuneration to the foreign company can be in one of the following
forms: (1) fixed fee; (2) commission; or (3) profit-sharing.
Whatever basis is used for remuneration, it must be formulated
clearly in the agreement, and it must be applicable under the
present Indonesian laws. To protect the foreign company's interests
properly, a bona fide and comprehensive agreement should be drawn
between the parties concerned.


Franchising

Although franchising is relatively new in Indonesia, it is rapidly
becoming a popular business approach for both U.S. and Indonesian
companies.  Franchises facilitate the transfer of know-how and
managerial expertise to Indonesian companies while simultaneously
allowing a U.S. company to quickly establish a presence in the
country.

Under a typical franchising agreement, the franchisor receives
royalties and fees as stipulated in the contract. In exchange, the
franchisee has the right to use (and manufacture) copyrighted,
patented or service-marked materials identifying the enterprise.
The franchisor typically provides training and organizational
guidance in return for a guarantee that the franchisee will follow
these operational directions.

The range of products and/or services organized or operated under
a specific franchising agreement varies.  Franchising agreements in
Indonesia are covered under the general contractual law of the
country.  They generally confer a status of exclusivity for
Indonesia and may prohibit sub-franchise agreements with third
parties.

To date, franchising has been limited to fast-food restaurants in
Indonesia in which U.S. companies have dominated the local market.
Franchising is likely to expand into non-restaurant services, such
as copying/printing, beauty salons, and temporary employee
services.


Direct Marketing

Indonesian law does not permit a foreign firm to market its
products directly to their customers, with the exception of
specific products sold directly to government agencies.  In those
cases, direct approval must be obtained by the purchasing entity.
All other products are marketed through Indonesian firms, as agents
or distributors.  Foreign firms can be involved primarily through
the assignment of foreign technical representatives to the local
firm.


Joint Ventures/Licensing

In June 1994, the government lifted most requirements for domestic
equity and joint ventures. Those who opt for 100 percent initial
ownership are obligated to divest some share, as little as 1
percent, after 15 years. This can be accomplished through the stock
market.

The choice of an Indonesian joint venture partner is critical for
many reasons.  For example, the partner can be relied upon for
knowledge of the local scene and contacts, which are important for
successful operations in Indonesia.

Also, a partnership in Indonesia is difficult to dissolve.
Consequently, the first choice has to be the correct choice.  It is
generally wise to keep in mind that business sense is crucial to
any commercial endeavor and, while contacts are important, they are
a poor substitute for business skills.

Because Indonesians place great importance on personal
relationships and mutual understanding, partnerships tend to be
based primarily on genuine accord, with the written contract
playing a less significant role.  It is therefore important that
any agreement is well understood by both sides. A contract over
which there are conflicting interpretations is certain to cause
future problems.

There are a small number of reference sources and credit check
agencies in Indonesia.  Banks, advisory companies, the American
Chamber of Commerce in Indonesia (AMCHAM), and the U.S. Embassy
Commercial Service (World Traders Data Report) can provide some
assistance in this area.

In some cases, licensing arrangements for products/services are
more cost-effective for U.S. companies doing business in Indonesia,
but the same caution mentioned for joint venture partners must also
be used.


Steps to Establishing an Office

A business permit issued by the appropriate Government agency is
required to establish an office in Indonesia.  Several government
agencies may be involved in issuing a business permit, depending on
the nature of the business.

Foreign companies may open a representative office by submitting a
business permit to the Indonesian Department of Trade.  After
reviewing the application to see if it meets all the requirements,
the Department will issue a letter of approval and make
recommendations to the Immigration Office of the Department of
Justice to obtain a "stay permit" and to the Indonesian Department
of Manpower for the "work permit".

This letter of approval is valid for three months and can be used
by the applicant to obtain other permits, including the payment-of-
guarantee money (Rp 500,000 per individual) and the annual
administrative fee of Rp 50,000.  After all the requirements are
fulfilled, the Department will issue a two-year business permit for
the representative office.

To begin the process, the applicant must fill out a special
application form accompanied by the following documents:

     A statement indicating the appointment of a local company as
     an agent  or representative;
     A list of the personnel in the company;
     Appointment letter from the principal;
     A statement indicating the office location;
     Curriculum vitae of company personnel;
     Fiscal certificate (taxpayer number).

The application should be addressed to:

     Drs. C. Gultom MA
     Director
     Direktorat Bina Sarana Perdagangan
     Ditjen Perdagangan Dalam Negeri
     Departemen Perdagangan
     Jl. M.I. Ridwan Rais No. 5
     Jakarta Pusat, Indonesia
     Tel.: 62-21-385-8189, 384-1961, ext. 1111

If a company establishes a regional representative office covering
at least two other ASEAN member countries, the applications should
be sent to:

     Ir. Sanyoto Sastrowardoyo
     Chairman
     Capital Investment Coordinating Board (BKPM)
     (Badan Koordinasi Penanaman Modal)
     Jalan Jend. Gatot Subroto 44
     Jakarta Selatan, Indonesia

The application should be accompanied by the following documents:

     The letter of appointment;
     A list of expatriates in management and employed as experts;
     A copy of the articles of incorporation of the company.

The permit for a regional representative office will not expire
until the office is dissolved or closed.

The Department of Public Works issues business permits for
construction, engineering and consulting companies.  This
application should be addressed to:

     Drs. Endang Sasmita
     Chief, Corporate Institutes Development Bureau
     Department of Public Works
     Jl. Pattimura 20
     Jakarta Selatan, Indonesia

The applicant must complete a special form provided by the agency
and include the following attachments:

     A copy of the articles of incorporation;
     A description of business activities;
     A letter of appointment;
     Curriculum vitae of the appointed personnel;
     Certification by the company's home Embassy.


Selling Techniques

As in most markets, the criteria of price, quality and delivery are
most significant to the Indonesian customer.  Low interest
financing also plays an important role and can potentially offset
the advantages of the initial factors; but, Indonesian buyers are
beginning to realize that a cheap price may in fact prove more
costly in the long run.

Another significant factor is the demonstration that the supplier
intends to be around for the long term.  Companies that have made
a commitment to the country by establishing an office, or some
other significant presence, will be more successful in marketing
their products than those that attempt to sell their product on
annual whirlwind trips.

A willingness to establish a joint venture production operation
will also contribute to sales success, especially if the new
facility has the potential to become a source for export sales in
the rest of Asia, in addition to domestic sales.


Press Contacts

Personal contacts are important in Indonesia, and businesses should
foster open communication with the press.  The U.S. Information
Service (USIS), located at both the American Embassy and at the
Zorinsky Library at the U.S. Commercial and Information Center, is
available to help businesses make initial contacts with the local
media.  USIS can arrange an introductory meeting between company
representatives and the Indonesian press through a press conference
or an informal gathering.  Please contact the Press AttachÇ at the
American Embassy for further information.  (See Appendix E for
contact information.)


Advertising

Newspaper advertising is recommended for introducing new products,
particularly in Jakarta and West Java where purchasing power is
concentrated. Numerous newspapers reach a large proportion of
consumers and the business community.

Advertising is currently limited, by government decree, to 35
percent of a newspaper's content. A maximum length of 20 pages is
also imposed by the government. These restrictions, although
somewhat eased by the recent decision to increase the number of
times per week that newspapers are allowed to publish, have
resulted in very high advertising rates in the leading newspapers.
In Kompas (est. readership 2.5 million), for example, a full-page
advertisement now runs over $50,000.

Listing of Major Newspapers and Business Journals (in Bahasa
Indonesia, except where noted)

Recommended Newspapers (All Dailies):

Kompas
Media Indonesia
Bisnis Indonesia
Jakarta Post (English language)

Newspapers are not the only advertising option in Indonesia. A
significant weekly magazine market is also available.

Recommended Business Journals:

Warta Ekonomi (weekly)
Properti (monthly)
Eksekutif (monthly)
Matra (monthly)
Economic and Business Review Indonesia (weekly, English language)
Indonesia Business Weekly (English language)

Direct mail advertising is often a low-cost, effective medium if
the mailing lists are properly prepared. Local advertising agencies
can also help to arrange for films, slides, and posters and
signboards for bus exteriors, bus stop shelters, and bridges.
Suggestions on reliable advertising agencies may also be obtained
through the Foreign Commercial Service at the U.S. Embassy in
Jakarta.

The most concentrated single media force is television. Television
ownership has become commonplace in Indonesia; potential viewership
is 110 million people.  The number of national television stations
has grown to six in recent years, including TVRI (state-owned and
operated), TPI, RCTI, SCTV, Indosiar and An-TEVE.

Another excellent advertising medium is the "Standard Trade and
Industry Directory of Indonesia," an official publication of the
Indonesian Chamber of Commerce and Industry (KADIN). Requests may
be made to the publisher at J. Hayam Wuruk 4SX, P.0. Box 4556,
Jakarta Pusat.


Pricing Product

Given the competition that American suppliers face from products
supplied by firms from other countries, product pricing must take
into account the costs of delivery, distribution and advertising.
Pricing is best developed with advice from local distributors, who
are more aware of the competitive factors at play in the specific
market.  U.S. companies may also want to conduct their own market
research or obtain this data from the Foreign Commercial Service or
private resources.


Sales Service and Customer Support

A critical aspect of a product's successful penetration into any
market is customer support.  American firms face difficulties in
providing this support, given the distances and costs of
maintaining product support facilities in a foreign country.

Although the local distribution partner normally establishes such
support, firms should be prepared to invest substantial amounts of
capital and manpower into making their local partner a first-class
service provider. Regardless of the reputation a company may have
on the international market, Indonesian customers look to a firm
that has on-the-ground customer support.  They need to know that
they can access their supplier in the country, rather than over
long distances.

This may also be one reason for preferring principal manufacturers,
rather than products from foreign trading companies.


Selling to the Government

Although plans are underway to at least partially privatize state
industries (i.e. "go public"), the Government of Indonesia is still
a major customer of a variety of products and services.  These
cover the full range of defense materials, items needed for
infrastructure projects, research and development programs, and
several of the pure industrial needs categorized under "Strategic
Industries," that are under the control of the national government.
These industries include steel making, ship building, aircraft
assembly, and some electronics and communications manufacturing.

While many of the items sold to the government can be negotiated
directly, there is still reason to utilize the services of an agent
or distributor, for the early stages of project development, and
for delivery, installation and service needs later.

Most sales to the military, however, require that an agent is used.
Often the customer will assist in the identification of the proper
agent.  (Many of the agencies are composed of retired military
officials, and consequently are in an excellent position to
understand the needs and operations of the particular branch of the
service that is the customer.)

American firms will want to become familiar with the "Blue Book",
the listing of major projects identified by the Government of
Indonesia as necessary for their development.  The list is
published annually by the National Planning Agency (BAPPENAS) and
is the official list of projects that can be considered for
allocation of export credit financing, among other things.
Companies should note that virtually all of the projects listed in
this book request "soft loan" (low interest rate) financing.

A project listed in the Blue Book, however, is one which is already
a long way towards selection.  This is because the Indonesian
agencies which develop these projects often do so with the
assistance of local agents and foreign suppliers of the specific
product or service.  Consequently, a listing in the Blue Book may
mean that a specific firm is already a part of the process.

For more detailed information on selling to the Government, see the
USFCS Marketing Report: The Process of Government Major Projects
and Their Procurement Procedures.


Protecting Your Product from IPR Infringement

Protection of intellectual property rights (IPR) in Indonesia is
hampered by inadequate enforcement of the laws and regulations
passed since 1987.  Foreign companies therefore must be vigilant in
protecting their products from IPR infringement.  Many choose to go
through the Indonesian legal system but cases may take several
years before they are finally resolved.

Occasionally, foreign companies work with local law firms and law
enforcement officials to conduct police raids on counterfeiters.
(The Embassy can provide a list of reputable law firms upon
request.)  Others conduct periodic seminars on the adverse effects
of IPR infringement on the Indonesian economy, most notably reduced
investment by foreign companies.

Ultimately, the course taken by companies to protect their IPR will
depend on their product.  As an example, one U.S. company first
identifies the counterfeiters of its products and then proceeds to
work with them and sign them as legal licensees of its products.
Some computer software companies provide free training and/or sell
their software at competitive prices, while warning that copies of
their product may contain damaging viruses.  Also, companies with
well-known trademarks must be vigilant in defending their marks by
registering them early or seeking a cancellation of an unauthorized
registration through the Ministry of Justice.

(See also Chapter VII - "Investment Climate" - for background on
Indonesian laws and regulations regarding the protection of IPR.)


Need for a Local Attorney

Since the legal system in Indonesia is still undergoing
modernization, most firms should locate and retain a local attorney
early in the process.  In any commercial dispute, the court system
is generally the last step. The success rate by foreign firms in
the local court system has not been high.

Although foreign firms cannot yet practice law in Indonesia, a  few
American law firms have established consulting arrangements with
local firms and are available to assist American firms in working
their way through the local legal structure.  A list of local
attorneys is available in the Consular Section of the U.S. Embassy.


Trade Promotion

The U.S. Embassy Foreign Commercial Service

Opened in November 1994 by Secretary of Commerce Ronald Brown, the
U.S. Commercial and Information Center is the focal point for the
promotion of exports of American goods and services to Indonesia.
The Commercial Center, one of only two such facilities in the
world, has experienced staff to provide counseling to Indonesian
and American businessmen, and has office space available for rent,
and conference room and meeting room facilities for company
exhibitions, technical seminars, contract signings and other
events.  In addition, the Center's Commercial Library has U.S.
industry directories in hard copy and CD formats.  The Commercial
Center is located in the heart of the Jakarta business district in
the World Trade Center complex, 3rd floor, Wisma Metropolitan II,
Jalan Sudirman 29-31.  (See Appendix E for phone and fax numbers.)

The Foreign Commercial Service in Jakarta also offers a number of
other programs designed to promote sales of U.S. products and
services in Indonesia, including the following:

a. Gold Key Service  -- a tailored program including pre-arranged
appointments with Indonesian business and/or government officials,
secretarial services, translators, seminar/ demonstration planning
and more.  Prices start at $150.00.  Three weeks' advance notice is
required.

b. Agent/Distributor Service -- a customized search by USFCS staff
for interested and qualified Indonesian representatives on behalf
of U.S. firms.  Up to six names of potential representatives will
be supplied.  $250.00.

c. Business Counseling -- intensive one-on-one sessions with USFCS
professionals on business conditions in Indonesia, tailored to the
specific requirements of the U.S. firm. Appointments should be made
in advance.  No charge.

d. CMA -- tailored, product specific marketing reports which com-

pare various aspects of a specific U.S. product (e.g. specifi-

cations, pricing, method of distribution) with comparable products
available in the Indonesian market.  $1500.00.

e. Trade Opportunities Program -- timely sales leads from In-
donesian firms seeking to buy or represent U.S. products and
services.

f.  World Trader Data Report -- a brief background report regarding
the credit worthiness and reliability of specific Indonesian firms.
The WTDR differs from others reports because it is focused on trade
transactions and contains an official statement by the U.S.
Government regarding the suitability of the Indonesian firm as a
business partner.  $100.00

Additional services are available to the U.S. businessperson
through a nationwide network of District Offices located in 74
cities.  Addresses and telephone numbers are listed under "U.S.
Department of Commerce" in the telephone book.


The Office of Agricultural Affairs

The Office of Agricultural Affairs (OAA) in Jakarta works closely
with importers and trade promotion organizations to increase the
sale of U.S. agricultural products in Indonesia.  OAA specialists
in various commodity areas can provide basic information and advice
regarding tariffs, non-tariff barriers, regulations, and other
aspects of the Indonesian market.

The OAA provides assistance to U.S. exporters and agribusiness
companies. This includes briefing and debriefing trade visitors,
scheduling appointments for first-time visitors and trade teams,
and arranging trade shows, seminars, and other activities where
groups of U.S. exporters can meet Indonesian traders.  OAA staff
also provides advice on the market development project plans of
U.S. business groups and trade associations, and offers suggestions
on strategy for promotional undertakings.

The OAA provides advice and logistical support for USDA Market
Development Cooperators and the Market Promotion Program (MPP)
participants (both those with offices in Indonesia and those who
manage their Indonesian programs from the United States or regional
bases), state Departments of Agriculture, and other regional and
industry-sponsored market promotion organizations.


USDA Promotional Programs for Agricultural Products

a.  Export Promotion Programs:  In 1994, the OAA coordinated $0.7
million in Foreign Market Development and $1.1 million Market
Promotion Program funds (a total of $1.8 million), working with 20
different trade associations.  Major groups operating in Indonesia
include the Cotton Council International, the American Soybean
Association, U.S. Wheat Associates, U.S. Feed Grains Council, and
the Washington State Apple Commission.  This year, as market
development opportunities continue to increase, the number of trade
associations active in Indonesia rose from 14 to 20.

b.  Market Development:  The OAA also conducts a market development
program involving such projects as in-store supermarket and
restaurant promotions, trade fairs, market research and educational
seminars designed to expand U.S. food and beverage sales.  In
addition, OAA provides training opportunities to Indonesians in a
variety of related disciplines under the Cochran Middle-Income
Program and the International Visitors Program through USIS.

c. Trade Leads Service: Under the Trade Leads Service, an
Indonesian importer can complete an information form identifying
the U.S. agricultural products that the company seeks and provide
this to the OAA. This information is transmitted electronically on
a daily basis to the U.S. exporters who may contact the Indonesian
company directly.

d. Buyer Alert: An overseas product publicity newsletter, Buyer
Alert, allows U.S. exporters to list -- at no charge -- products
available for sale abroad. Announcements regarding agricultural
products are transmitted electronically each week to 50 markets
world-wide, including Indonesia.


U.S. Information Service Programs for Trade Development

USIS organizes programs to foster U.S. trade and investment.
Programming highlights the advantage U.S. investment provides in
terms of value, technology transfer, and human resources
development.  USIS programs also promote the reduction of trade
barriers, urge accelerated implementation of the GATT accord, and
encourage sustained Indonesian support for trade liberalization.

The USIS Zorinsky Library at the U.S. Commercial and Information
Center contains professional information retrieval services for
information on commerce and trade.  The library's resources include
Internet, such online databases as Dialog, Legislate, Lexis-Nexis,
and Westlaw, and a large collection of CD-ROMS including UMI/GPO
PROQUEST, the U.S. Code Annotated (USCA), ERIC, Phonedisc, and
North American FAX.  (See Appendix E for contact information.)

USIS recruits speakers for events such as the annual Economic
Seminar, co-sponsored with the Indonesian Economists Association,
and on topics including the advantages and challenges of free
trade, U.S. trade policy, and trade promotion.  For further
information on the speakers program, please contact the Public
Affairs Counselor (Appendix E).

The USIS press section, through press releases, a book translation
program, and Worldnet television interactive dialogues with high-
level government officials and business leaders, communicates
American views on trade and investment questions to Indonesian
policy makers and the public.



CHAPTER V - LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT


Business opportunities in Indonesia for American firms are
substantial.  The large population base and a growing middle class
provide a market for American consumer goods and services. In
addition, the Government of Indonesia's plan to modernize the
country's infrastructure offers promising possibilities in major
projects in transportation, communications, electrical power,
airport and port construction and environmental projects.

For example, two U.S. companies recently successfully negotiated an
agreement to build and operate a $1.8 billion private electric
power generation plant, which will sell its output to PLN, the
state-owned electric utility.  Domestic and foreign private firms
are actively pursuing other infrastructure projects.

In summary, the best trade prospects for non-agricultural and
agricultural sectors can be found in the following areas:


BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND SERVICES
(Ranked by estimated growth.  Exchange rate:  US$1 = Rp. 2,235)

1 - Household Consumer Goods (HCG)

Indonesia's rising economic growth has led to a rapidly expanding
middle class.  Over 17 million households are therefore potential
targets for household consumer goods.  Modernization of the
Indonesian infrastructure has led to rapid changes in lifestyle,
consumption patterns and household buying policies.  The changes
have indirectly created increasing demand for practical and
efficient household equipment.

The market competition is quite strong.  Japan has dominated the
market by gaining more than 50 percent of the market share.  The
rest is shared among Korea, Taiwan, US and European countries like
Germany and Italy.  The factors that most influence a household's
purchase of these products are: price, credit sales, promotion,
quality, service and delivery.

                                  1994      1995      1996
                                  (Millions of U.S. dollars)

A. TOTAL MARKET SIZE             4,520     4,711     4,951
B. TOTAL LOCAL PRODUCTION        4,449     4,671     4,928
C. TOTAL EXPORTS                   234       290       335
D. TOTAL IMPORTS                   305       330       358
E. IMPORTS FROM THE U.S.            20        19        21

Note: The above statistics are unofficial estimates.

2 - Building Products (BLD)

The rapid growth in the construction industry sector is inseparable
from the increasing demand for building products.  The large number
of developments of apartments, condominiums, office buildings,
shopping malls and centers in the cities and the suburbs are
indicators of the expanding opportunities for building products.

The expanding middle class has caused increasing demand for higher
quality building products.  The multi-story buildings in big cities
are the primary end-users of these products.  Japan, Germany, Italy
and South Korea are the key competitors in the market.  The U.S.
share is increasing, particularly in the supply of panels and
hardware, lockers and security systems.

                                   1994      1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE              1,903     3,070     4,741
B. TOTAL LOCAL PRODUCTION         5,500     6,875     8,593
C. TOTAL EXPORTS                  4,200     4,500     4,650
D. TOTAL IMPORTS                    603       695       798
E. IMPORTS FROM THE U.S.             70        84        99

Note: The above statistics are unofficial estimates.


3 - Architectural, Construction and Engineering Services (ACE)

The market for ACE services is most directly seen in the rapid
development of basic infrastructure projects such as roads and
bridges, power plants, sea and airport development and
rehabilitation and other sectors.  The private sector has also
contributed substantially to the growth of these services; most
notably in housing developments, apartments, condominiums, office
buildings, hotels, shopping malls and shopping centers.

The government is encouraging the involvement of the private sector
in certain industries formerly controlled by the government such as
power, telecommunications, toll roads, etc., which has added
significantly to the growth of the industry.

Japan, Germany and France, as major aid donors to the country's
development budget, are the major players in the construction of
infrastructure projects.

U.S. ACE firms with better experience in construction management
know how should be able to take part in this rapidly growing
industry.

                                   1994     1995     1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE              2,443    2,745    3,019
B. TOTAL LOCAL PRODUCTION         1,832    2,059    2,264
C. TOTAL EXPORTS                     0*       0*       0*
D. TOTAL IMPORTS                    611      686      755
E. IMPORTS FROM THE U.S.             75       85      100

Note: The above statistics are unofficial estimates.
*Negligible amounts, if any.


4 - Electrical Power Systems (ELP)

Until two years ago, electric power was produced and distributed by
the state monopoly power company, Perusahaan Listrik Negara (PLN).
At that time the private sector was invited by the GOI to produce
electric power for commercial distribution purposes.  Since the
upturn in the national economy began in 1987, thousands of new
industrial plants and millions of households have applied for new
and/or additional supplies of electric power from PLN.  This has
resulted in a rapid increase in demand for and imports of power
generating and distributing equipment.

Peak electric power demand on the island of Java alone is expected
to reach 22,500 Megawatt Hours (MWH) by the year 2000.  Total
Indonesian capacity in 1994 was only slightly over 15,000 MWH.
Among the power generating plants planned for the near future are
coal-fired, gas-fired, and combined cycle power plants; hydro power
plants; diesel power plants; and geothermal power plants.  The most
recent statements of the Indonesian authority in the energy sector
indicate that Indonesia must exploit extensively the abundant
hydro, geothermal and coal resources for the generation of electric
power.  The deposit of coal alone should be enough for 300 years
power generating activities in Indonesia.

The GOI has been looking at ways to allow a greater role for the
private sector in commercial power generation and supply.  An
Embassy report on major Indonesian projects lists 50 electric power
projects from 1993 to the end of the century with total costs
estimated at US $15 billion.  Most of these power projects are
expected to be financed by international lending institutions such
as the World Bank and Asian Development Bank and donor countries.
The rest will be financed by PLN through self-generated funds, and
through the private sector - both local and foreign investors.
Based on this plan, a large amount of electric power-generating and
distribution equipment is expected to be imported during the next
three to five years.

                                   1994      1995       1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE              2,374     2,583     2,915
B. TOTAL LOCAL PRODUCTION           600       625       650
C. TOTAL EXPORTS                    147       155       165
D. TOTAL IMPORTS                  1,921     2,113     2,430
E. IMPORTS FROM THE U.S.            254       275       315

Note: The above statistics are unofficial estimates.


5 - Franchising (FRA)

Franchising, particularly in fast-food restaurants, has seen
dramatic expansion in recent years, largely the result of an
expanding middle class and steady economic growth in Indonesia.
U.S. franchisors have dominated this sector locally, accounting for
about 80 percent of the market.   The Government has been
supportive of the franchise concept because it serves as a source
of professional service management training and labor-intensive
employment, and can help small businesses in Indonesia.  While
opportunities for the fast-food sector will continue to increase,
franchise opportunities will grow more rapidly in other services,
including real estate, building management, business (printing,
copying, temporary personnel), and automotive products and
services.

                                   1994      1995     1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE              1,300     1,500    1,600
B. TOTAL LOCAL PRODUCTION           200       200      200
C. TOTAL EXPORTS                     0*        0*       0*
D. TOTAL IMPORTS                  1,100     1,300    1,400
E. IMPORTS FROM THE U.S.            900     1,100    1,200

Note: The above statistics are unofficial estimates.
*Negligible amounts, if any.


6 - Telecommunications Equipment (TEL)

Indonesia has embarked on an ambitious plan to modernize and expand
its telecommunications network by at least five million lines by
1999.  This is expected to increase the telephone penetration rate
in this country, one of the lowest in the region (approximately
1/100), to almost 4/100.  The modernization program will be
accomplished with the assistance of World Bank loans and
cooperation agreements, called Joint Operation Schemes (JOS),
between P.T. Telkom, the state telecommunications provider, and
private foreign operators and local companies.  The JOS foreign
operators are US WEST (West Java), NTT and Telstra (Central Java),
France Telecom (Sumatra), Singapore Telecom (Eastern Indonesia),
and Malaysia Telecom (Kalimantan).  These operators will install a
total of two million lines, while Telkom will install three million
lines in Jakarta and East Java.  The total value of the JOS is
approximately $7.5 billion.

Indonesia will also increase the number of lines for its cellular
and other wireless technologies.  Indonesia has established three
digital GSM providers (Satelindo, Komselindo, and Telekomindo).
Private companies are also participating in wireless systems for
the local loop (Ratelindo, partly owned by the Bakrie Group with
Telkom).  In addition, Satelindo has taken over the operation of
the Palapa satellites; the first of the Palapa-C series of
satellites will be launched later this year.  Like many other
countries in the region, Indonesia is enhancing telecommunications
services and is very interested in information technologies,
including ISDN.

While Indonesia is expected to import a significant amount of
telecommunications equipment, local production is encouraged and
often required.  Local companies have begun production of fiber
optic cable and other telecom products.

                                  1994     1995     1996
                                  (Millions of US dollars)

A. TOTAL MARKET SIZE             1,100    1,300    1,800
B. TOTAL LOCAL PRODUCTION          650      700     1030
C. TOTAL EXPORTS                   270      300      330
D. TOTAL IMPORTS                   720      900    1,100
E. IMPORTS FROM THE U.S.           120      190      200

Note: The above statistics are unofficial estimates.


7 - Pollution Control Equipment (POL)

Although the pollution control equipment market in Indonesia is one
of the least mature in Asia, there is no doubt that it is growing.
As enforcement starts to pick up, corporate image and public
pressure will play an increasingly important role in expanding the
market.

In response to the government-driven Clean River Program, the
market for water pollution control equipment is growing rapidly.
The trend has been toward factories wanting turnkey jobs to be done
by single engineering firms.

The market for air pollution control equipment is also growing as
a result of a government effort to establish the Blue Sky Program.
Cement, steel, and pulp and paper industries have been targeted in
addition to high polluting power plants.

Environmental service industries are dominated primarily by
consulting firms.  Services required include engineering design for
environmental facilities, environmental impact assessments and
environmental audits.

                                   1994      1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE              1,000     1,200     1,500
B. TOTAL LOCAL PRODUCTION             0         0         0
C. TOTAL EXPORTS                      0         0         0
D. TOTAL IMPORTS                  1,000     1,200     1,500
E. IMPORTS FROM THE U.S.            200       250       310

Note: The above statistics are unofficial estimates.


8 - Construction Equipment (CON)

Since 1987, during the revitalization of the Indonesian economy,
the manufacturing and exploitation industries have been very active
in the country.  A huge amount of capital goods needed to equip the
projects have been imported from various countries.  As a result,
the construction industry has also been booming.  Many multi-story
buildings, manufacturing plants, industrial and commercial
complexes, recreational and residential houses, sea ports and
airports are being built.

Other construction activities include: construction of dams,
hydropower and coal-fired power plants, roads and bridges,
irrigation, and many other civil construction projects.
Construction plans for pulp and paper mill plants are estimated to
be worth as much as USD 8 billion by the end of the century.
Similar development plans are also underway in various other
sectors; for example, plans call for chemical and petrochemical
plants estimated to be worth up to USD 10 billion.  In the same
period plans for expansion of power generating plants are valued at
USD 10 billion.

These construction activities will result in increases in total
market demand and total imports for general construction equipment
and machinery.  An indication of the level of increased activity in
the construction sector is that Indonesia currently must import
cement supplies for the first time in order to cope with spiraling
cement prices and increased demand in the construction sector.

                                   1994     1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE               825       905       985
B. TOTAL LOCAL PRODUCTION          120       135       155
C. TOTAL EXPORTS                     9        15        20
D. TOTAL IMPORTS                   715       785       850
E. IMPORTS FROM THE U.S.           221       245       275

Note: The above statistics are unofficial estimates.


9 - Computer Systems and Peripherals (CPT)

The computer hardware market is enjoying a steady growth rate of
15-20 percent a year, so much so that foreign computer companies
are considering expansion or establishment of production plants in
Indonesia.  U.S. products have a substantial share of the import
market because consumers see American computers as both high
quality and state-of-the-art.  Personal computers (PC) is an
extremely competitive market for locally-assembled and imported
units.  The market for mainframe and mid-range computers and
peripherals is more open.  As a whole, the computer hardware
systems market should continue to increase with major
infrastructure projects and growth in sectors with requirements to
manage a high volume of data.

                                   1994      1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE               410       460       550
B. TOTAL LOCAL PRODUCTION          350       400       500
C. TOTAL EXPORTS                   100       110       140
D. TOTAL IMPORTS                   160       170       190
E. IMPORTS FROM THE U.S.            31        37        45

Note: The above statistics are unofficial estimates.


10 - Food Processing and Packaging Equipment (FPP)

A large population with a steadily increasing income is a potential
market for industries in this sector.  The number of food
processing and packaging companies is growing from year to year and
the existing ones have instituted expansion programs to
rehabilitate and upgrade the existing machinery.

Most of the machinery is still imported, particularly from Taiwan,
Japan, Germany and the U.S.  The adoption of the ISO 9000 will also
affect the demand for higher quality food processing equipment.

                                   1994      1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE               369       385       424
B. TOTAL LOCAL PRODUCTION           38        42        47
C. TOTAL EXPORTS                     3         4         4
D. TOTAL IMPORTS                   334       347       381
E. IMPORTS FROM THE U.S.             8        12        15

Note: The above statistics are unofficial estimates.

11 - Medical Equipment (MED)

The Indonesian medical equipment market is estimated to grow by
about 10 percent annually for the next three years.  This estimate
is based on the fact that in 1994/95 fiscal year, the state budget
assigned approximately US $440 million to health sector development
and 48 percent of this amount is designated for medical equipment.
Due to the limited budget for the nation's health service, the
government has concentrated more on establishing public health
centers (PUSKESMAS) for the lower-income groups while the private
sector has been encouraged to provide services for the middle and
upper class.  As a result, over the past five years, the number of
private hospitals increased by 27.3 percent while the number of
government hospitals increased by only 4 percent.  Although private
hospitals are fewer in number, they have larger budgets for
purchasing medical equipment because they offer better services and
charge higher fees.  This fact supports the increasing demand of
more advanced medical equipment.

Indonesian hospitals are not well equipped.  Most of the medical
equipment in use is obsolete and will need to be rehabilitated and
expanded soon.  During the current year 1994/5, the government is
spending US $25.4 million on the expansion and rehabilitation of
the existing hospitals.  Imports of medical equipment has risen
steadily, averaging 12 percent over the last three year.

To meet the market demand of a growing and increasingly affluent
middle class that demands better medical services, private
hospitals need more advanced medical equipment.  In addition,
evidence suggests that the more modern life-style of urban
residents may lead to higher incidence of respiratory illnesses,
cardiovascular, cancer and other diseases, leading to market
opportunities for sophisticated medical equipment.

The competition in the medical equipment market is very tight.  The
key players in the market are Japan, U.S., Germany, France, UK and
Singapore.  Pricing is the key in the competition followed by
quality, reliability, after sales service, effective promotion and
extensive distribution channels.  China and Taiwan are new entrants
in the local market with very competitively priced equipment.

                                   1994      1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE               130       143       157
B. TOTAL LOCAL PRODUCTION            7         8         9
C. TOTAL EXPORTS                     3         3         5
D. TOTAL IMPORTS                   126       138       153
E. IMPORTS FROM THE U.S.             7         8         9

Note: The above statistics are unofficial estimates.

12 - Computer Software (CSF)

As the principal supplier of the world market for computer
software, the United States has the principal share of the market.
However, the computer software piracy rate is extremely high due to
ineffective enforcement of copyright laws for both software and
instruction manuals, resulting in limited market penetration for
U.S. companies.  The Indonesian Government recently stated its
intent to strengthen enforcement of its Intellectual Property laws.
To this end, the government's IPR action committee has begun
cooperative relations with the Business Software Alliance.
Indonesia is also modifying its legislation to meet commitments
made in the Uruguay Round.  In the near term, software for
manufacturing processes and specialized applications (e.g.,
construction market) will do very well; with more effective
enforcement, opportunities for mass market software will also
expand.

                                   1994    1995      1996
                                   (Millions of U.S. dollars)

A. TOTAL MARKET SIZE               92        98       103
B. TOTAL LOCAL PRODUCTION           6         7         8
C. TOTAL EXPORTS                   0*        0*        0*
D. TOTAL IMPORTS                   NA        NA        NA
E. IMPORTS FROM THE U.S.           NA        NA        NA

Note: The above statistics are Business Software Alliance estimates.
*Negligible amounts, if any.


BEST PROSPECTS FOR AGRICULTURAL PRODUCTS

Bulk Commodities

Cotton              Wheat
Tobacco             Corn
Soybeans            Sorghum


Intermediate and High Value Commodities

Livestock                          Soybean Meal
Lumber and Panel Products          Juices
Fresh Fruit                        Nuts
Beef and Poultry                   Feed Ingredients
Frozen French Fries



CHAPTER VI - TRADE REGULATIONS AND STANDARDS


In 1986, the Indonesian government began a program of trade policy
reform.  A number of periodic deregulation packages have eliminated
or reduced tariff and non-tariff barriers, thus increasing
competition in the economy.  The deregulation package issued in
May, 1995, was the most significant since 1990.  It reduced the
average tariff by nearly 25 percent, and introduced a long-range
approach to reform, laying out periodic tariff reductions through
the year 2003.  The most recent  package made little progress in
reducing non-tariff barriers, however.

Although the government lifted the monopoly rights of state-owned
PT Krakatau Steel in 1992, significant restrictive trade practices
remain, particularly in the agricultural sector.  These
arrangements result in high cost inputs and economic
inefficiencies:  the World Bank estimates that the level of
agricultural production protected by non-tariff barriers is 35.5
percent; 30.3 percent of manufacturing is protected.  For example,
import and distribution of a number of agricultural products, such
as wheat and sugar, is controlled by the state National Logistics
Agency (BULOG).  Domestic sugar prices are approximately 17 percent
higher than international market prices, and the import monopoly on
wheat imports (and the related monopoly on milling held by a
private company) adds substantially to the costs of down-stream
users, such as bakers and feed producers.

Another area in which government policy hinders trade is the ban on
majority foreign involvement in distribution and services to
domestic trade.  Barriers to trade are also compounded by the
oligopolistic nature of much of the domestic economy.


Tariffs and Import Taxes

Import Duties and Surcharges:  The May reform package reduced the
import duties on most tariff categories by 5 to 10 percentage
points.  According to the schedule for future tariff reform,
tariffs below 20 percent will be reduced by 5 percent by the year
2000 and tariffs greater than 20 percent will be reduced to 20
percent by 1998 and to 10 percent by 2003.

Indonesia also imposes import surcharges, or supplemental import
duties, on approximately 200 tariff lines.  These charges were
often introduced as attempts to make tariffs out of previous non-
tariff barriers, and they range from 5 to 30 percent, with imports
in the automotive sector being subjected to surcharges of 75
percent.

Progress in the deregulation process is clear:  the simple average
unweighted tariff  plus tariff surcharge has fallen from 37 percent
in 1985 to 15 percent in 1995.  The trade-weighted average  fell
from 12.5 percent in 1994 to 9.5 percent in 1995.

The effective tariff rate is much lower, however, due to
exemptions.  Capital goods for approved investments, imports used
to produce exported goods, and imports exempted by the Ministry of
Finance are not subject to the duties.  Smuggling also considerably
reduces the amount of revenue collected through tariffs.

The May 1995 deregulation package lowers applied tariff rates far
beyond Indonesia's commitments in the Uruguay Round of GATT
negotiations.  In the Round, Indonesia bound 94.6 percent of its
tariff lines at a 40 percent import tariff, and committed to
eliminate all import surcharges in the bound sectors.  The offer
did not include any tariff lines with current applied tariffs plus
import surcharges higher than the ceiling, however, so the offer to
bind was not particularly valuable in creating new trade.  Sectors
which are not covered by the offer include motor vehicles and
parts, iron and steel, machinery, aircraft, and chemicals.

Other taxes:  The government levies a 10 percent value-added tax on
the sale of  all domestic and imported goods, and a luxury tax of
10 to 35 percent on a number of products.  For imports, these sales
taxes are collected at the point of import and are calculated based
on the value of the product, including import duties.


Non-Tariff Barriers

As mentioned earlier, non-tariff barriers continue to protect a
large share of both agricultural and manufacturing production.  The
May 1995 package lifted licensing requirements for some metal,
steel, and iron products, but the package's overall effect on non-
tariff barriers was slight.  Products in 189 tariff categories are
subject to import licensing restrictions, covering USD 2 billion,
or 6.3 percent, of total imports in 1994.  Major affected products
are motor vehicles, rice, wheat, sugar, salt, soybean meal,
alcoholic beverages, cloves, explosives, and petroleum products.

Under its commitment in the Uruguay Round, the Indonesian
Government is committed to removing the non-tariff barriers on 179
of the 269 restricted tariff lines by the year 2005; 81 of those
items are agricultural products.  The remaining 98 non-tariff
barriers that will not be removed under the GATT include those on
motor vehicles, engines and heavy equipment, and iron and steel and
related products.


Customs Valuation

In response to grave concern about the effectiveness of the Customs
Service, the Indonesian Government decreed in 1985 that all imports
valued at more than $5,000 must bear a verification report issued
by   the Swiss inspection firm Societe Generale de Surveillance
(SGS) regarding  the type of good, quality, quantity, and applied
cost.  These inspections are carried out  at the point of exit of
all shipments to Indonesia.  Duties are then calculated based on
the effective price contained in the examination report (LPS).
Duties are assessed on CIF value at prevailing prices in the export
market.

In 1991, the government and  SGS formed PT Surveyor Indonesia (PT
SI), to take over the inspection role.  SGS holds an interest in PT
SI and continues to provide personnel and services.

PT SI's agreement with the Indonesian Government provides that the
customs valuation will be based on prevailing market prices.
However, the government has stipulated set values, which are
significantly above market prices for a few products, such as
polyethylene, and paper for cement bags.  In mid-1995, the
government issued a decree that goods coming into the country by
air will not go through the PT SI process, but will instead be
subject to customs inspection.


Import Licenses

Companies can directly import machinery and materials for use in
their own production processes.   Importers of most goods must
obtain a license from the Department of Trade, which issues three
types of licenses:

     1) API, given to general importers, valid for five years;
     2) APIS, given to domestic companies to import goods for their
     own use, valid for two years;
     3) APIT, given to foreign joint venture companies to import
     capital equipment and raw materials for their own use,
     validity determined by the Department of Trade on a case-by-
     case basis.

Importers of food and drug-related products must be registered with
the Department of Health; importers of oil and gas products must
also register with the appropriate department.


Import Documentation

The government requires the following for most imports:

     pro-forma invoice             commercial invoice
     certificate of origin         bill of lading
     insurance certificate         special certificates

Imported goods must bear a verification report from PT SI, which is
based on the inspection report (LPS).  Shipments valued at less
than $5,000 are exempt from the LPS requirement.


Labeling and Marking Requirements

Regulations on food labeling are currently in place.  The October
1993 deregulation package contained provisions which affected the
pharmaceutical industry, such as opening the market somewhat to
imported drugs and relaxing requirements for the registration of
drugs which have already been approved in other countries.
Previously, a foreign firm could register drugs only if they
incorporated high technology and were products of the registering
company's own research.


Prohibited Imports

The government currently bans the import of printed material in
Bahasa Indonesia, Chinese languages, or other Indonesian languages.
Video tapes and laser discs are subject to the censorship board.


Export Controls

Over half of Indonesia's non-oil exports are subject to some sort
of controls.  Export bans affect 72 products; 1,827 products are
determined to be Regulated Exports, and can be exported only by
companies approved by the Ministry of Trade; 105 products are
Supervised Exports which also must by approved by the Ministry of
Trade; and 80 products are subject to export taxes.  Most of the
restrictions affect agricultural products, including all the major
cash crops --  rubber, palm oil, coffee, and copra.  Log and raw
rattan are subject to prohibitively high export taxes.  Sawn timber
is also subject to export taxes, and plywood and a number of other
agricultural products can be marketed only by approved trade
associations.  Export restrictions or controls to ensure adequate
domestic availability apply to salt, cement, fertilizer, pulp and
paper, crude palm oil, and cement.


Temporary Entry

The government urges exporting foreign investors to locate in
bonded or export processing zones.  There is a duty drawback
facility (BAPEKSTA) for exports located outside the zones, but
repayments can be subject to long delays which reduce the incentive
to use the facility and hence reduce the incentive to export.
Producers located within the bonded areas are allowed to release up
to 15 percent of their production into the local market.
Export regulations apply to rattan, sawn timber, processed wood,
and sandalwood.  Export taxes or export surcharges are levied on
rattan, hides, timber, and related processed products.

Export taxes on forestry products account for the bulk of
Indonesia's export restrictions.  In 1992, the government replaced
a ban on log exports with prohibitively high export taxes.  Cement
production and prices in Indonesia are also tightly controlled, and
the government imposes export bans  in the event of domestic
shortages.


Free Trade Zones/Warehouses

There are a number of export processing zones (EPZs) in Indonesia.
The most well-known of these is Batam island, located 20 kilometers
south of Singapore.

Indonesia also has several bonded zones or areas designated
Entrepots for Export-Destined Production (EPTEs).  Companies are
encouraged to locate in bonded zones or industrial estates when
possible.  Other free trade zones include a facility near Tanjung
Priok (north Jakarta), Indonesia's biggest port, and a bonded
warehouse in Cakung, also near Jakarta.

Foreign and domestic investors wishing to establish projects in a
bonded area apply to BKPM; other licenses normally issued by
regional administrations are not required.



CHAPTER VII - INVESTMENT CLIMATE


Openness to Foreign Investment

The Indonesian government actively encourages foreign investment.
Burgeoning infrastructure requirements and the desire to contain
the increase of commercial indebtedness have reinforced the pro-
foreign investment attitude.  Foreign investment in industry,
particularly in export-oriented and labor-intensive activities, is
strongly encouraged.

The government is continuing to develop policies on the private
provision of infrastructure through build-own-operate schemes,
particularly for electric power, telecommunications, and roads.
Although some sectors remain closed or restricted, the government
periodically updates its negative investment list and list of
sectors reserved for small business.  Most recently, in June 1994
and May 1995, several previously restricted sectors were opened to
foreign investment, including harbors, electricity generation,
telecommunications, shipping, airlines, railways, and water supply.
Foreign investment opportunities in many services remain
restricted, however.

The government's pragmatic attitude has led it to support a growing
private sector role in the economy.  Private entities may
establish, acquire, and dispose of interests in business
enterprises.  Foreign investors may purchase domestic firms except
in sectors prohibited by the negative list.

The Foreign Capital Investment Law of 1967, with later amendments,
provides the basic framework for foreign investment.  The Capital
Investment Coordinating Board (BKPM) plays a key role in promoting
foreign investment and approving project applications.  Investments
in the oil and gas, mining,  banking and insurance industries are
handled by the relevant technical government departments.

All other foreign investment must be approved by BKPM, which also
approves domestic investments when the owners seek investment
incentives.  BKPM aims to function as a one-stop investor service;
however, investors should also work closely with relevant technical
government departments and with regional and local authorities.

Oil and gas: The state owns all oil and mineral rights; foreign
firms participate in their extraction through production sharing
contracts and contracts  of work. The Department of Mines and
Energy has the primary responsibility for oil and energy; it
oversees the state oil company, Pertamina, and its production-
sharing contractors. Contractors are required to finance all
exploration, production, and development costs in their contract
areas; they are entitled to recover operating, exploration, and
development costs out of the oil and gas produced.

Mining:  Foreign investors operate under contracts of work for
general mining and production sharing contracts for coal. The
contractor conducts all stages of the operation and assumes all
financial and operational risks.

Banking and Insurance:  A 1988 deregulation package reopened the
banking and insurance industries; all entrants must be in the form
of joint ventures, with capitalization requirements higher than
those for domestic entities.  The Department of Finance licenses
new ventures; Bank Indonesia, the central bank, regulates banking
activity.   Half of a joint venture bank's loans must be
export-related.

Restrictions and Incentives:  In June 1994, requirements for
minimum equity in most foreign investments were eliminated.
Foreign investors who open with 100 percent equity must divest some
percentage of their holdings after 15 years.  This appears to be as
little as 1 percent and may be accomplished through the stock
market.  In those sectors which require some Indonesian equity,
joint venture investments must include a 5 percent minimum local
equity, but need not divest any further.

Foreign investors may not hold majority ownership in retail
operations, although franchise, licensing, and technical service
agreements are common.  Foreign companies are also forbidden from
providing domestic distribution services.  Foreign companies
manufacturing in Indonesia may own up to 80 percent of companies
which distribute their locally produced goods at the wholesale
level.  Foreign companies may also post technical advisors to
Indonesian companies which distribute their products at the retail
level.

Various fiscal measures are available to both foreign and domestic
investors. A company producing for the domestic market may apply
for import duty exemptions on all required machinery and equipment
as well as on raw and supporting materials needed during the first
two years of commercial production.

A company producing 65 percent for export has additional
incentives.  It may apply for restitution of import duties paid on
inputs which are subsequently re-exported in finished form. If a
firm is located in a bonded zone, it pays no duty until the portion
of production destined for the domestic market is "exported" to
Indonesia, in which case duty is owed on that portion.

A company may apply to the customs authority to have its warehouse
designated as a private bonded zone. The duty regime for a company
producing entirely for export depends on location.  If a company is
in a bonded zone, then duty is not paid; if outside a bonded zone,
it can apply for restitution of duties paid.  Investors should also
consult with BKPM about income tax, value-added tax, and luxury tax
facilities.

The government expects foreign investors to contribute to the
training and development of Indonesian nationals, allowing the
transfer of skills and technology required for their effective
participation in the management of foreign companies.  As a general
rule, a company can hire foreigners only for positions which the
government has deemed open to non-Indonesians.  Employers must have
manpower training programs aimed at replacing foreigners with
Indonesians.


Conversion and Transfer Policies

The Government of Indonesia maintains a freely convertible rupiah
under a managed float.  The rupiah is traded in an interbank market
in Jakarta.  Indonesia maintains no capital controls and foreign
exchange may flow freely in and out of the country.

Since 1988, the Central Bank has maintained a policy of steadily
depreciating the rupiah against the dollar.  The rupiah's
depreciation against the dollar has ranged between 2.3 percent and
5.9 percent.  Depreciation against currencies of other trading
partners has been larger, reflecting the changing value of the
dollar.  In 1991, the government instituted a system of ceilings
for foreign commercial borrowing which are binding for public
sector entities, commercial banks and private sector projects which
have a connection with the government.


Expropriation and Compensation

Article 21 of the 1967 Foreign Capital Investment Law stipulates
that the government shall not initiate nationalization of foreign
investments except by law and when such action is necessary in the
interest of the state. The principles of international law on
compensation are observed. According to BKPM, no foreign investment
has been expropriated since the passage of the 1967 law.


Dispute Settlement

The Indonesian government has agreed to submit any investment
disputes to the International Center for the Settlement of
Investment Disputes (ICSID) in Washington, D.C. An investment
arbitration board, BANI, is available when both parties to a
dispute agree to submit to its arbitration.  A long-pending
investment  dispute involving a U.S. investor was resolved through
the ICSID in 1993.  We are not aware of other major investment
disputes between the GOI and foreign investors in recent years.

Many foreign investors believe that the court system does not
provide effective recourse for solving commercial disputes.  In
particular, bankruptcy laws are unenforceable.  Mortgages and
secured interests in chattels and real property are recognized but
a dependable recording system is not in place.  Enforcement of
secured interests is problematic.

The GOI has recognized that the legal system must be modernized.
The tax code was reformed in 1983 and amended in 1991.  New laws on
banking, insurance, and pensions were passed in 1992 which codify
deregulation measures previously contained in ministerial decrees.
A comprehensive corporations law was recently enacted.  Work has
begun on a new commercial code.  One of the government's priorities
is the continuing rationalization and modernization of laws and
regulations.


Right to Private Ownership and Establishment

Indonesia recognizes the right to private ownership and
establishment and has relied heavily on the private sector as the
principal engine of its economic growth.  The role of parastatals
in the Indonesian economy has been shrinking as private sector
activity has grown and privileges awarded to state-owned
enterprises have decreased.

The government has initiated programs to enhance the efficiency of
state-owned enterprise and to expose them to greater competition.
Options for parastatals include the sale of shares through an
Indonesian stock exchange, private placement of shares, and
management contracts.


Protection of Intellectual Property Rights

Indonesia has made great progress on intellectual property
protection since 1986, although enforcement is an ongoing problem.
Indonesia is a member of the World Intellectual Property
Organization and is party to certain sections of the Paris
Convention for the protection of Intellectual Property.  The
government is currently revising its patent, copyright, and
trademark laws and drafting new legislation on integrated circuits,
industrial design, and trade secrets, to bring its laws into
compliance with commitments made in the TRIPS agreement of the
Uruguay Round.

Patents:  Indonesia's first patent law entered into effect on
August 1, 1991.  The law and its implementing regulations outline
patent applications, procedures, application fees, registration of
patent consultants, and patent announcements.  Products and
production processes are in principle patentable subject to certain
requirements for a period of 14 years commencing from the filing of
the patent application.

The duration of a patent may be extended for another two years.  In
addition to this relatively short term of patent protection, other
drawbacks in the law include compulsory licensing provisions, and
a provision allowing importation of 50 specific pharmaceutical
products by non-patent holders.

Trademarks:  A new trademark act took effect on April 1, 1993.
This act states that trademark rights are determined on a first-to-
file basis rather than on a first use basis.  After registration,
the mark must actually be used in commerce.  The law offers
protection for service marks and collective marks and sets forth a
procedure for opposition prior to examination by the trademark
office.  It also provides well-known mark protection.  Cancellation
actions must be lodged within five years of the trademark
registration date.

Copyright:  Parliament passed an amendment to the 1982 copyright
law in September 1987.  The amended law affords protection to
foreign works, expands the scope of coverage and raises the terms
of protection for most categories of works to international
standards.  The United States and Indonesia concluded a bilateral
copyright agreement extending reciprocal protection in 1989.

New technologies:  Indonesian law does not include specific
protection for biotechnology.  Legislation covering integrated
circuits should be presented to Parliament in 1996.  The U.S.-
Indonesia Science and Technology Agreement ensures protection for
intellectual property derived from cooperative activities under the
agreement's umbrella.


Regulatory System:  Laws and Procedures

Despite major improvements in its economic environment, Indonesia
continues to have a reputation as a difficult place to do business.
The regulatory and legal environment can be tangled, confusing and
time-consuming.  In recent years, considerable attention has
focused on the costs of corruption and influence-peddling.

Complaints arise from irregular fees and/ or commissions that
companies are asked to pay to operate businesses in a timely
manner. Red tape has been another major concern to foreign
investors. Deregulation has been successful in removing barriers,
creating more transparent trade and investment regimes, and
alleviated, but not entirely eliminated, red tape.


Efficient Capital Markets and Portfolio Investment

Indonesia has one of the most deregulated, market-based banking
systems in the developing world.  Before 1988, the banking system
was dominated by five state-owned banks.  However, private domestic
banks have accounted for most of the expansion of the system since
1988.

The rapid growth of the banking sector since 1988 led to a
deterioration in the quality of many banks' assets. The failure of
the private Bank Summa in December 1992, caused by bad lending
practices and an overexposure to the real estate sector, was a
dramatic demonstration of the larger problem.

In order to enhance the soundness and stability of the banking
system, the government introduced new prudential regulations, which
include capital adequacy targets in line with the standards
recommended by the Bank of International Settlements (BIS).  At
last report, only 26 of the 199 banks were unable to meet the 8
percent target for capital to risk-weighted assets.  Unfortunately,
the remaining problems are concentrated in the five state-owned
banks.

Foreign investors can get credit on the local market. Deposit and
lending rates are determined by individual banks. Accounting
standards and practices need additional improvement.  Many major
international accounting firms operate in Indonesia under technical
advisory contracts with domestic accounting firms.

Indonesian capital markets have developed rapidly in the last five
years.  The average daily trading volume on the Jakarta Stock
Exchange has grown from 27 thousand shares in 1988 to 24 million
shares in 1994. Prices on the Exchange declined sharply in 1994,
but have rebounded through the first half of 1995.

The markets for bonds and commercial paper are also developing, but
with little trading in the secondary market.  The Indonesian
government is working to improve and expand capital market
operations.

Portfolio investment is regulated by BAPEPAM, the Indonesian
equivalent of the Securities and Exchange Commission. In 1987, the
market was opened to foreign investors, although they are still
prohibited from owning more than 49 percent of the listed shares of
any company.  (Foreign investment has reached this limit in 32 of
the 172 companies listed on the exchange.)

There are no other formal restrictions regarding mergers and
acquisitions.  However, Indonesian companies are closely held and
their owners rarely put up more than 20 percent of their stock for
public offering.  There have been no instances of hostile
takeovers.  A comprehensive capital markets bill was recently
submitted to the Indonesian Parliament: the bill aims to increase
transparency, certainty, and accountability.

American banks and securities firms do not receive national
treatment.  In order to enter the market, they must form a joint
venture with an Indonesian firm that holds at least a 15 percent
ownership interest.  In addition, they are subject to
discriminatory capital requirements.

Indonesia's largest private companies are all owned by powerful
business conglomerates.  The companies within each conglomerate
share directors and major share holders.  Articles of association
and incorporation do not limit or prohibit foreign investment or
participation.


Political Violence

We are not aware of incidents in the recent past involving
politically-motivated damage to foreign-owned projects or
installations.


Bilateral Investment Agreements

Indonesia has signed investment protection agreements with many
countries, including the United States, Belgium, Denmark, France,
Germany, the Republic of Korea, the Netherlands, Norway,
Switzerland, and the United Kingdom.  It has also signed treaties
for the avoidance of double taxation with several countries,
including the United States.


OPIC and Other Investment Insurance Programs

Since 1967, all three types of Overseas Private Investment
Corporation (OPIC) insurance -- inconvertibility, expropriation,
and war, revolution and insurrection -- have been available to U.S.
investors in Indonesia.  OPIC coverage was extended to bid bonds on
service contracts in 1987.  OPIC also offers project financing to
U.S. firms.


Capital Outflow Policy

There are no capital controls in Indonesia.  Foreign investors have
the right to repatriate capital and profits at the prevailing rate
of exchange.  No prior permits are necessary to transfer foreign
exchange.  The government does not place restrictions on outward
direct investment.


Foreign Direct Investment Statistics

From 1967 through 1994, BKPM approved foreign investment
applications worth more than $84 billion; well over half were
approved after 1988.  Foreign investment approvals reached $24
billion in 1994, an almost 300 percent increase over 1993.  Most
approved investments in the past five years have been in
manufacturing, especially in the chemical, textile, pulp and paper
industries.  Foreign investment in oil, gas, mining, banking and
insurance all fall outside BKPM's purview; there are several
billion dollars more foreign investment in these sectors.

Hong Kong replaced Singapore as the country's biggest investor in
1994, with approvals worth  $6.04 billion. Other major foreign
investors include Japan, Singapore, Taiwan, and South Korea.  The
United States ranks seventh in cumulative BKPM-approved investment.
The U.S. Department of Commerce estimates the total value of U.S.
direct investment in Indonesia to be $4.6 billion, with $3.7
billion of the total in the petroleum sector; if investment in oil,
gas, and banking is taken into account, the U.S. is probably
Indonesia's first or second largest foreign investor.

Most new investments in 1994 were in the chemical ($7 billion) and
paper ($5 billion) industries.  Other new investments were in
electricity generation, supply of industrial and clean water,
metals and textiles.

Japan has traditionally been the leader in terms of the value of
BKPM-approved investment.  Between 1967 and 1994, BKPM-approved
Japanese investment applications totalled $15.66 billion, making
Japan the biggest cumulative foreign investor in Indonesia.  In
1994, Japanese investment totalled 1.56 billion.  Indonesia's
second largest oil company, Indonesia Petroleum, is a Japanese
joint venture, as is the largest automobile manufacturer, PT Astra.
Japanese partners also figure heavily in the pulp, paper and
petrochemicals industries.

PT Freeport Indonesia, an affiliate of the U.S. mining firm
Freeport McMoran, is the largest direct U.S. investment.  Recently
Freeport Indonesia implemented a $500 million mine and mill
expansion and signed a new 30-year contract of work for its copper
and gold concession in Irian Jaya.

In the oil and gas sector, the United States is by far the largest
player (Note: BKPM does not include oil and gas investments when
calculating foreign investment).  U.S. companies, including Caltex,
Maxus, Arco, Mobil, Union Texas, and Unocal lift the lion's share
of Indonesia's crude petroleum and natural gas. U.S. oil services
companies have significant investments in Indonesia to serve the
oil patch, including fabrication yards for offshore oil platform
development.

Several U.S. companies produce consumer and other products for the
domestic market.  AT&T won a major government contract for a switch
manufacturing and installation project.   General Motors is
building a $110 million vehicle assembly plant and the General
Electric Capital Corporation has established a multimillion dollar
automobile financing joint venture.

Mission Energy has taken the lead in a consortium to build a multi-
billion dollar coal-fired power plant in East Java.  U.S. investors
have been increasingly interested in producing in Indonesia for
export, with Batam Island a newly favored investment site.  Four
U.S. banks have branches in Indonesia and there are seven U.S. bank
representative offices.

Other Asian investors are particularly prominent in the labor-
intensive textile, garment, and footwear industries.


The Labor Force

The labor force is estimated at about 83 million, of which about 75
percent is between the ages of 15 and 34.  Although the population
growth rate has been reduced to 1.66 percent, the labor force is
thought to be growing at about 2.8 percent per year.  Women make up
approximately 40 percent of the work-force.  About 30 percent of
the labor force is under-employed.  Unemployment is roughly 3.6
percent.  Less than 1 percent of the labor force is estimated to
have a university education.  About 10 percent are junior high
school graduates; another 7 percent have graduated from high
school.  The number of persons with secondary or higher education
is rising, and the government plans to make education through
junior high school compulsory.

Although there are more job seekers than positions available,
Indonesia is experiencing shortages of managerial and professional
personnel.  Job creation and the alleviation of underemployment are
targets of economic policy making.  Education and human resource
development remain high priorities for the government.

The government sets minimum wages by region. The minimum wage in
Jakarta was set at Rp 4,600 (approx. $2.08) per day as of April 1,
1995.  Labor strikes have been common since 1992.  Strikes usually
relate to failure of employers to pay the minimum wage, denial of
benefits, lack of an effective union, and termination of employees.

Indonesia's industrial relations system is based on the national
ideology of Pancasila. In its industrial relations application,
Pancasila emphasizes the traditional Indonesian values of harmony
and consultation leading to consensus.  In reality, such consensus
is hard to reach and enforcement of labor regulations is a major
problem.  However, a foreign joint venture can expect more rigorous
enforcement of labor regulations as well as other laws than a local
firm.



CHAPTER VIII - TRADE AND PROJECT FINANCING


Indonesia has an open capital account and no foreign exchange
controls. The government does impose some restrictions on foreign
borrowing, which could have an impact on certain types of trade
financing.  The rapid growth of foreign debt in 1989-1990 led the
government to establish a Commercial Offshore Loan Team (PKLN),
which imposes limits both on public sector foreign borrowing and
foreign borrowing by commercial banks. Short-term letters of credit
are not affected, but letters of credit with terms longer than one
year are subject to limits set by PKLN.


General Financing Availability

All forms of import and export financing are available in the Indo-

nesian market and are frequently utilized, although most imports
are financed with letters of credit. Short-term financing is
readily available. Some larger banks will provide longer-term
financing of up to 2-3 years.

Indonesian buyers generally prefer that the supplier provide the
necessary financing for a commercial transaction, either normal
commercial trade financing or export credits from the source
country's export credit agency (in the case of the United States,
the U.S. Export-Import Bank located in Washington, D.C.).  Export
credit limits are set by PKLN. Local bank financing can be
arranged, depending on the customer and/or the agent/distributor
involved in the transaction. Several American banks have shown
initiative in arranging trade financing packages for their
customers, some with EximBank guarantees.


Types of Available Export and Project Financing

Indonesia secures a substantial portion of its development funding
from the multilateral development banks, primarily the Asian
Development Bank (ADB) and the World Bank. Almost $5 billion is
made available from a variety of donors belonging to the
Consultative Group on Indonesia (CGI), chaired by the World Bank.

American firms can participate in projects funded by the ADB and
the World Bank, as well as the EximBank of the United States.
Information on projects and procedures is available through U.S.
Commercial Service officers assigned to each multilateral devel-
opment bank as well as senior commercial officers in individual
countries.

Other forms of feasibility study and project financing may be
available through the Trade Development Agency (TDA) and the U.S.
Agency for International Development (USAID).  Investment projects
in Indonesia are eligible for Overseas Private Investment
Corporation (OPIC) loans and insurance.

Financing of Agricultural Exports: The Embassy's Agricultural
office in Jakarta has successfully launched the GSM-102 Credit
Guarantee Program for Indonesia.  With a credit guarantee from
USDA's Commodity Credit Corporation, the GSM-102 Program allows
U.S. banks to offer lower interest rates and repayment terms up to
3 years to Indonesian banks for U.S. agricultural products.

The program began at $15 million in FY 92 and grew to $160 million
in FY 95.  Successful implementation of this program should result
in increased U.S. agricultural trade beyond the CY 1994 level of
$504 million.  Although a $160 million FY 95 GSM 102 Credit
Guarantee Program has been announced for Indonesia, Ministry of
Finance regulations now restrict its use by the private sector to
1 year.  The program covers the importation of 11 U.S.
commodities/products.  Currently, 18 Indonesian banks can
participate under the program.

Banks with Correspondent U.S. Banking Arrangements

Four American banks have branches in Indonesia: Chase Manhattan;
Citibank; Bank of America; and, American Express Bank.

The following seven U.S. banks have representative offices in
Jakarta:  Chemical Bank; J.P. Morgan; Bank of Boston; Bank of
California; Philadelphia National; Republic National; and Banker's
Trust.

The following 39 Indonesian banks have correspondent relationships
with American banks:

Bank Central Asia                  Bank Danamon
Bank International Indonesia       Bank Dagang Nasional Indonesia
Lippo Bank                         Bank Umum Nasional
Bank Niaga                         Bank Bali
Bank Duta                          Panin Bank
Bank Pacific                       Bank Buana Indonesia
Bank Utama (OEB)                   Bank Universal
Sejahtera Bank Umum                Bank Asia Pacific
Bank Surya                         Tamara Bank
Unibank                            Arta Prima Bank
Bank Central Dagan                 Prima Express Bank
Bank NISP                          Intermodern Bank
Bank Artha Graha                   Bank Tiara
Bank Umum Servitia                 Subentra Bank
Nusa Bank                          Bank Bumi Arta Indonesia
Bank Rama                          Bank Dagang Bali
Haga Bank                          Bank Bahari
Bank Arta Niago Kencana            Bank Mashill Utama
Bank Ekonomi Raharja               Antardaerah Bank
Bank Pelita




CHAPTER IX - BUSINESS TRAVEL


Business Customs

The best time for a business trip is September through June. July
and August are popular vacation months. Business visitors should
check the local holidays schedule before traveling to Indonesia.
Business cards are commonly used.

The normal business attire is a business suit or white shirt, tie
and slacks for men, and a business suit or dress for women. The
traditional batik shirt is also commonly worn in the office.

Indonesians like to avoid confrontation and disharmony. Exchanging
small gifts is common practice. Do not use the left hand in
receiving or eating. Although hand shaking is a common practice,
physical contact is usually avoided.  Smiling, bowing, or nodding
is considered more gracious. Tea or coffee is almost always offered
during business or social calls and should be accepted.

Indonesians do not conduct business transactions or make decisions
in the same direct fashion Americans do, so U.S. business people
should be prepared to spend a good deal of time with clients before
getting down to the business transaction. Patience is the key. One
should not lose one's temper or show emotion. The word "no" is
rarely used.

Most importantly, Indonesians do business with "friends," people
that they know, so developing a rapport is crucial. While quality
and price are important, they are secondary to the personal
interaction of the business partners.

Business Hours: Business hours start early in Indonesia:

Commerce:                     Government:
0800-1600 Monday to Friday*   0800-1500 Monday to Friday*
0800-1300 Saturday

Banks:                        Shops:
0800-1600 Monday to Friday*   0900-1800 Monday to Saturday
0800-1300 Saturday

*Moslems are released to prayers every Friday from 1100-1200.


Travel Advisory and Visas

Entrance and Residence Requirements:  Tourists and business
visitors from the United States may obtain free visas upon arrival
if they have a return ticket, and the period of stay does not
exceed 2 months.

Business travelers interested in engaging in such activities as
concluding commercial transactions or performing professional or
technical services should obtain a regular business visa from an
Indonesian embassy or consulate. Temporary resident visas are valid
for 6 months to 1 year and are issued exclusively to experts
required for national development. Non-citizens are not allowed to
work in Indonesia unless they have a work permit issued by the
Ministry of Manpower.

In addition, foreign and domestic investors must submit a manpower
employment plan to BKPM to obtain approval for expatriate employee
work permits. Work permits are issued only for positions that
cannot be filled by Indonesian nationals.  The government issues a
list of professions by sectors that are open to expatriate
personnel.

Foreigners who have lived in Indonesia 6 months or more will need
an exit or exit/reentry permit. A fee, currently Rp 250,000 or
approximately $125, must be paid by permanent residents of
Indonesia, both citizens and foreigners, upon departure at the
point of embarkation. This fee can be credited against payment of
personal or corporate taxes due to the government.


Business Infrastructure

Transportation: In Jakarta and other major cities, public
transportation is not considered reliable or particularly safe.
Taxis are available, but the condition of the vehicles and the
knowledge of the drivers varies widely. Although a luxury taxi
service recently started which provides good service, there are
only a few such taxis on the street. Thus, the preferred method of
transport is by private car. The majority of foreigners resident in
Indonesia use the services of hired drivers. Wages plus benefits
range from $150-500 month for an experienced driver who speaks
English.

There is air service between major cities and islands but expect to
experience delays routinely. Train service links cities; however,
scheduled runs do not always have a first-class car. There is ferry
service for people and vehicles linking the major islands and many
of the smaller islands.

Language: The national language of Bahasa Indonesia is spoken all
over Indonesia by the educated populace. In more remote areas
various dialects are used. Most of the better hotels have English-
speaking staff, as do the shopping centers which cater to
expatriates. However, the English can be sketchy. International
telephone operators speak English; taxi drivers do not. Indonesian
firms hoping to conduct business with foreigners all try to have
English speakers.

Communications: Telephone service is adequate, although phone lines
do go out occasionally. A direct international dial line which
allows the caller to reach AT&T and MCI without going through a
local operator is available. There is a 10 percent VAT tax on all
phone calls.

DHL and Federal Express operate in the major cities; incoming
parcels may be held up at customs causing some delays. Many expat
firms have their own regular pouch service set up using normal air
freight services. Airlines flying into Jakarta include Garuda (the
national airline), Singapore Air, Cathay Pacific, KLM; connections
can be made to all major airlines including U.S. lines in
Singapore.

Housing: Housing is expensive. Depending on the size of house, one
can expect to pay from $3,000-$7,500 per month for a house or
luxury apartment in Jakarta. The cost of air conditioning and
electrical appliances can reach $300-$1,000. Housing leases are
normally paid at least two years in advance in Jakarta, and
requirements for 3-4 years rent in advance are not uncommon.
Prices are quoted in US dollars.

Many new condominiums are being built so the market may stabilize;
recently rents had been rising at a 9-15 percent increase per year.
Rental agents are frequently used. Western-style houses with
swimming pools are easy to find. Location becomes important as the
traffic becomes increasingly heavy -- all commutes are long, from
30-90 minutes, doubled if there is a heavy rain.

Health: Due to air pollution, residents often experience
respiratory illnesses at some time during any extended stay in the
larger cities. The water is not potable -- bottled water from
certain firms is recommended. Care must be taken when eating out to
avoid contracting bacterial infections. There are clinics and
hospitals in Jakarta, but expatriates generally prefer to fly to
Singapore for treatment in serious cases.

Food: Exercise reasonable care in the preparation of food at home
and in selecting from the menu when eating out. There are many
moderately priced and upscale restaurants which offer a wonderful
variety of ethnic cuisines in addition to the Indonesian dishes --
Chinese, Indian, Italian, Thai, Korean, French, American.

There are top notch-bakeries and a couple of grocery store chains
which offer a wide variety of products, many imported from the U.S.
and Australia, for a price about double of that you find at home.


Holiday Schedule

The U.S. Embassy and American Consulates Surabaya and Medan close
on American and Indonesian holidays. The holidays and the dates are
listed below for FY 1996:

U.S. Holiday        Indonesian Holiday       Date

Independence Day                             July 4, 1995

                    Mohammad's Birthday      August 9, 1995

                    Independence Day         August 17, 1995

Labor Day                                    September 4, 1995

Columbus Day                                 October 9, 1995

*Veteran's Day                               November 11, 1995

Thanksgiving Day                             November 23, 1995

                    Ascension of Mohammad    December 20, 1995

Christmas Day       Christmas Day            December 25, 1995

New Year's Day      New Year's Day           January 1, 1996

Martin Luther King Jr.'s Birthday            January 15, 1996

Washington's Birthday                        February 19, 1996

                    Idul Fitri               February 20-21, 1996

                    Hari Raya Nyepi          March 21, 1996

                    Good Friday              April 5, 1996

                    Idul Adha                April 28, 1996

                    Ascension Day            May 16, 1996

                    Moslem New Year          May 19, 1996

Memorial Day                                 May 27, 1996

                    Waisak                   June 2, 1996

Independence Day                             July 4, 1996

                    Mohammad's Birthday      July 28, 1996


* U.S. Holiday falling on Saturday is observed on Friday.




APPENDIX A
COUNTRY DATA

Profile
Population:    193 Million
Pop. Growth    1.66 percent
Religions:     Islam, Hinduism, Buddhism, Christianity, Animism
Government:    Authoritarian
Languages:     Bahasa Indonesia and Regional Languages
Work Week:     Monday-Friday




APPENDIX B
DOMESTIC ECONOMY

                            1993      1994      1995*     1996*
(Millions of USD)

GDP                      144,757   166,134   186,576   199,636
Real GDP growth rate           6.5       7.3       7.2       7.0
GDP Per Capita (Nominal)     775       874       966      1033
Gov. Spending (% of GDP)      19.3      17.6      16.6      17.8
Inflation (%)                 10.2       9.6      10.0      10.0
Unemployment (%)               3.4       3.6       3.6       3.6
Underemployment               36.8      37.0      36.5      36.5
Foreign Exc. Reserve      12,352    13,709    14,092    13,500
Avg. Exchange Rate (Rp.)    2087      2140      2247      2365
Foreign Debt: Off & Priv  81,828    87,600    85,000   100,000
Debt Service Ratio            33.5      32.0      30.0      29.1
U.S. Economic Aid             94        90        87        60

Sources:  GOI;
          *1995 and 1996 numbers are Embassy estimates.



APPENDIX C
TRADE

(Millions of USD)

Total Exports            36,607    39,497    42,657    45,560
Total Imports            28,376    31,654    34,819    36,908
U.S. Exports               2770      2811      3092      3580
U.S. Imports               5439      6523      7045      7750
U.S. Share of Indonesian
     Imports                  9.8      12.7      12.7       9.7
Growth Rate of Total
     Imports                  6.0      12.9       8.9       6.0
Growth Rate of Imports
     from U.S.               -0.3       1.5      10.0      15.8
Imports of Manufactured
     Goods               22,183    23,958    24,402    26,354
U.S. Share of Imports of
     Manufactured Goods      11.2      11.2      12.7      12.7
Total Agricultural
     Imports               1561      2081      2767      4828
U.S. Share of Agricultural
     Imports                  8.4      10.6      11.5      18.0


Trade Balance with Three Leading Partners in 1994
(Positive Number Indicates Surplus for Indonesia)

Japan          4,924
EU             -357
U.S.           2,669


Principal U.S. Exports: Machinery, Aircraft, Cotton

Principal U.S. Imports: Footwear, Electronic Goods, Garments

Sources:  U.S. Department of Commerce, GOI, IMF;
          *1995 and 1996 numbers are Embassy estimates.




APPENDIX D
INVESTMENT STATISTICS


Foreign Direct Investment in Indonesia (Millions of USD)

Country              1992      1993      1994      1967-1994

Japan               1,510.6   815.0  1,562.4   15,665.4
S. Korea              618.3    60.4  1,849.0    5,448.4
Hong Kong           1,020.9   470.6  6,041.7   12,004.9
Taiwan                563.3   124.6  2,487.5    6,570.3
Singapore             465.1  1333.2  1,664.4    5,568.6
U.S.A.                922.5   445.3    977.0    4,650.1
Britain               978.2   301.1  2,957.1    5,644.0
Germany                36.7   120.3    113.0    2,058.1
Netherlands            96.2   311.0    165.7    2,764.3
Australia              67.8   118.2     53.2    1,563.9


Note:          Investment approvals: non-oil and gas, non-financial
               sectors.
Sources:       GOI



APPENDIX E
U.S. AND INDONESIAN CONTACTS


Country Trade Associations/Chambers of Commerce

The American-Indonesian Chamber of Commerce is located at 711 Third
Avenue, 17th Floor, New York, NY 10017. The telephone number is
(212) 687-4505 and the fax is (212) 867-9882. The chamber's
membership is comprised of over 150 companies and individuals doing
business in Indonesia. It has an active program of monthly
luncheons featuring speakers knowledgeable on Indonesia and
briefing programs for newly appointed American and Indonesian
Government officials. The Chamber also publishes "OUTLOOK/
INDONESIA," a quarterly publication containing interpretations of
new Indonesian policies, sectoral reviews, summaries of recent
Chamber activities, and an Executive Secretary's column. In
addition, the American-Indonesian Chamber of Commerce provides
business translations, either from English to Indonesian or
Indonesian to English.

The Indonesian American Business Council (I.A.B.C.) is located at
115 Billingsgate Lane, Gaithersburg, Maryland 20877, with Mr. Vance
Titus as the Executive Director.  The telephone and fax number is
(301) 216-0496.  The I.A.B.C. publishes "ALERT", "DIALOG", AND
"SPECIAL REPORT" to keep its members informed.  In addition to its
publications, the Council provides country-focused and general
international business services such as:  The Resource Center, a
specialized, mini-international business library; The Referral
Network, a database which provides its members access to Indonesia-
specific and global contact lists, survey and project reports, and
international directories. The I.A.B.C. holds monthly meetings and
selected special events to provide its members the unique
opportunity to broaden their business contacts and professional
networking to compete globally.

The American Chamber of Commerce in Indonesia, known as AMCHAM, is
affiliated with the Asia-Pacific Council of American Chambers of
Commerce (APCAC). Its 600 members include leading U.S. firms with
offices in Indonesia, associates, individuals, and special members.
The chamber has prepared a number of useful guides to doing
business in Indonesia, including an annual country paper, and
assists U.S. firms in assessing business opportunities by staging
AMCHAM briefing breakfasts at the requestor's expense. AMCHAM is
located in the World Trade Center, 11th floor, Jl. Jendral Sudirman
Kav. 29 - 31, Jakarta 12084, Indonesia.

AMERICAN CHAMBER OF COMMERCE
Louis Clinton, President
Carol Walker, Executive Director
World Trade Center, 11th Floor,
Jalan Jendral Sudirman Kav. 29 - 31
Jakarta 12084, Indonesia
Phone:  [62] (21) 526 2860
Fax:    [62] (21) 526 2861


Market Research Firms

Performing market research in Indonesia is difficult because
detailed statistics on production and consumption are often not
available through published sources. External trade statistics,
however, are fairly detailed and additional data can be obtained
for a fee from the Central Bureau of Statistics (Biro Pusat
Statistik), Ir. Sutomo No. 8, P.0. Box 3, Jakarta. In addition,
unrecorded trade may distort import values and trends. When using
CBS data, note that CBS figures understate import values since they
exclude duty-free imports, including duty free imports for
investment and certain other transactions.

Although there is a growing number of Indonesian organizations
active in market research, the numbers are small and at varying
levels of expertise. Branches of American banks will often make
market surveys for their customers, and several U.S. consulting
firms now have affiliates in Jakarta. A growing number of foreign
law firms, including some from the United States, are also entering
the Indonesian business community as business consultants.

Members of INKINDO, the Association of Indonesian Consultants,
perform a wide range of research and consulting services. INKINDO
was established by Indonesian consultants based in Jakarta. The
address of the association is Jalan Bendungan Hilir Raya, No. 29.
Jakarta Pusat, Indonesia. Tel. 62-21- 5738577/78. Fax 62-21-
5733474.

P.T. Data Consult publishes a biweekly newsletter entitled
"Indonesian Commercial Newsletter." The newsletter contains a
sectoral survey in each issue and other market information. The
addresses of several market research firms in Jakarta are listed in
the "Sources of Information" section of the Overseas Business
Report. Advice on these firms and others that can undertake market
surveys may be obtained from the Foreign Commercial Service, U.S.
Embassy in Jakarta.

The major trade association in Indonesia is the Indonesian Chamber
of Commerce and Industry (KADIN), whose membership includes
representatives from private industry as well as cooperatives,
public corporations, utilities, and state-owned enterprises. In
addition, there are numerous enterprises with specific interest in
a specific sector of the economy that have specialized or
professional organizations.

Associations of importers and exporters, most of which are
organized on a commodity basis, include the Importers Association
of Indonesia (GINSI) and the Indonesian Association of Exporters
(GPEI), both of which have head offices in Jakarta. Their addresses
are: Importers Association of Indonesia (GINSI), CTC Building, 4th
Fl., Jl. Kramat Raya 94-96; PO Box 2744, Jakarta 10027. Tel. 62-21-
3901559, 3908480, 3908481. Fax. 62-21-3908479. Indonesian Exporters
Association (GPEI), Jalan Kramat Raya 4-6, Jakarta Pusat. Tel:
(62)(21) 356-099.

The Indonesian Government has established a National Agency for
Export Development within the Ministry of Trade. This agency
promotes the export of less well-known products, such as
handicrafts (for example, jewelry, batik, handwoven fabric, and
wood carvings), agricultural and cottage industry products, and new
manufactured products. The agency -- which is located at Jl. Gajah
Mada No. 8, Jakarta 10130. Tel. 62-21-362-666, 384-5096, 385-7184.
Fax: 62-21-384-4588, 3848380, 3853135 -- will assist foreign buyers
and importers in establishing contacts with Indonesian companies.


Addresses and Phone Numbers: Key Contacts


U.S. EMBASSY, JAKARTA

Mailing Address in U.S.:
American Embassy - Jakarta
Box 1
APO -- AP, 96520

International Mail:
American Embassy Jakarta
Jalan Medan Merdeka Selatan #5
Jakarta 10110, Indonesia

U.S. Foreign Commercial Service, Indonesia
Michael J. Hand, Counselor for Commercial Affairs
Tom Moore, Commercial Attache
Tel: 62-21-360-360 (ext. 2080)
Fax: 62-21-385-1632

U.S. Commercial and Information Center
Jon Kuehner, Director - Commercial Center
Charles Reese, Ass't Commercial Attache
James McCarthy, Commercial Officer
3rd Floor, Wisma Metropolitan II
Jl. Jendral Sudirman Kav. 29-31
Jakarta 12910, Indonesia
Tel: 62-21-526-2850
Fax: 62-21-526-2855

Foreign Agricultural Service
Michael Humphrey, Counselor  for Agricultural Affairs
Margie Bauer, Agricultural Attache
Tel: 62-21-360-360 (ext. 2161)
Fax: 62-21-380-1363

U.S. Embassy Economic Section
Robert Fitts, Economic Counselor
Dan Clune, Finance Officer
Tom Cadogan, Resource Officer
Robin McClellan, Trade Officer
Tel: 62-21-360-360 (ext. 2073)
Fax: 62-21-386-2259

U.S. Information Service (USIS)
Steven Monblatt, Public Affairs Counselor
Craig Stromme, Press Attache
Tel:  62-21-360-360 (ext. 2500)
Fax:  62-21-381-0243
Email:  [email protected]

U.S. Commercial & Information Center
Zorinsky Library
Kathleen Brahney, Director
3rd Floor, Wisma Metropolitan II
Jl. Jendral Sudirman Kav. 29-31
Tel:  62-21-526-2834
Fax:  62-21-526-2838
Email:  [email protected]

Agency for International Development (U.S. AID)
Barry MacDonald, Chief, Private Sector Development Office
Tel: 62-21-360-360 (ext. 2308)
Fax: 62-21-380-6694


U.S. Consulates General

Wagiman Tandun, Commercial Specialist
American Consulate General
Jalan Imam Bonjol #13
Medan, Indonesia
Tel: 62-061-519-590
Fax: 62-061-544-415

Sidatajudi, Commercial Specialist
American Consulate General
Jalan Raya Dr. Sutomo #33
Surabaya, Indonesia
Tel: 62-031-582-287
Fax: 62-031-574-492


CONSULTANTS

SGV UTOMO Management Consultants
Chase Plaza
Jalan Jend. Sudirman Kav. 21
Jakarta Pusat, Indonesia
Contact: Budiman Elkana, Managing Partner
Tel: 62-21-520-8199
Fax: 62-21-570-4347

Plansearch Associates
Jalan Limau 1/28A
Jakarta Selatan, Indonesia
Contact: Gunter Shwarze, Senior Consultant
Tel: 62-21-739-5017
Fax: 62-21-739-5018

P.T. SRI International
Wisma Bank Dharmala, 15th Fl.
Jl. Jend Sudirman, Kav 28
Jakarta Selatan, 12920, Indonesia
Contact: David Sparks
Tel: 62-21-521-2200
Fax: 62-21-521-2203

P.T. Primanata Arthasecurindo
Jakarta Stock Exchange Building, 17th Floor
Jl. Jend. Sudirman, Kav. 52-53
Jakarta 12190, Indonesia
Contact:  Dra. Cynthia Indradewi, President
Tel: 62-21-515-0516, 515-0517
Fax: 62-21-515-0766

P.T. Global Infoserve Indonesia
Granada Building 5th Floor
Jl. Jend. Sudirman Kav. 50
Jakarta 12930, Indonesia
Tel: 62-21-525-3657, 525-4373, 525-4414
Fax: 62-21-525-2153

Business Advisory Indonesia
Wisma Bank Dharmala, Suite 1103
Jl. Jendral Sudriman Kav. 28
Jakarta 12910, Indonesia
Contact: Darrell R. Johnson, Advisor
Tel: 62-21-522-8613
Fax: 62-21-522-8612

Business Advisory Strategies
Kuningan Plaza, Suite 304 North
Jl. H.R. Rasuna Said Cll-14
Jakarta 12940, Indonesia
Contact: James W. Castle, Technical Advisor
Tel: 62-21-520-7696, 520-7689
Fax: 62-21-525-0604, 520-2557

Harvest International Inc.
Wisma Metropolitan I, l0th Floor
Jalan Jendral Sudirman, KAV 29
Jakarta Pusat, 12920, Indonesia
Contact: Harvey Goldstein, Chairman and CEO
Tel: 62-21-525-1641
Fax: 62-21-520-7789

P.T. Data Consult Inc.
Jalan Kramat Raya, No. 5- L
Jakarta 10450, Indonesia
Contact: IR. Sulaeman Krisnandhi, President
Tel: 62-21-390-4711, 471-4752
Fax: 62-21-390-1878, 489-5196

P.T. Capricorn Indonesia Consult Inc.
Jl. Raden Saleh No. 46 & 48
Jakarta 10330, Indonesia
Contact:  Wilson Nababan, President
Tel: 62-21-310-1081/2, 314-0319, 314-0183, 314-0371
Fax: 62-21-310-1505, 310-3488



APPENDIX F
MARKET RESEARCH


List of U.S. Foreign Commercial Service Market Reports

1995

1.   Building Materials
2.   Electric Power Systems:  Power Generation Equipment
3.   Electric Power Systems:  Power Transmission and Generating
     Equipment
4.   Architectural/Construction/Engineering Services
5.   Computer and Peripherals
6.   Pollution Control Equipment:  Water Pollution Control
     Equipment
7.   Mining Industry Equipment
8.   Computer Software
9.   Franchising:  Non-food
10.  Miscellaneous Consumer Goods
11.  Telecommunications Equipment
12.  Retailing
     1. Government Technical Assistance
     2. Government Procurement and Concessional Financing
13.  The Process of Government Major Projects and Their Procurement
     Procedures

1996

1.   Tourism and Resort Development
2.   Computer Services: Computer Systems Integration
3.   Consumer Goods:  Misc. on jewelry, imported garment,
     cosmetics, gift products, health food, OTC drugs etc.
4.   Capital Goods:  Machine Tools
5.   Packaged Food
6.   Retail and Industrial Distribution Systems
7.   Industrial Chemicals
8.   Natuna Special Projects
9.   Solid Waste Incineration incl. Hospital Waste
10.  Security and Safety Equipment
11.  Sports, Recreation and Leisure Equipment
12.  Wireless Equipment and Services


USDA/FAS/Commodity Reports and Market Briefs

Commodity Reports

Agricultural Situation Annual
Cocoa Annual and Semi-Annual
Coffee Annual and Semi-Annual
Cotton Annual
Forest Products Annual
Grain and Feed Annual
High Value Products Annual
Oilseeds and Products Annual
Sugar Annual and Semi-Annual
Tea Annual
Tobacco Annual
Livestock Voluntary Report


Market Overviews

Fresh Fruit
Apples
Grapes
Pears
Stone Fruit
Citrus
Fresh Vegetables
Meat/Poultry Products
Dairy Products
Consumer-Ready Foodstuffs


Other Reports

Deregulation Report
GSM-102 Credit Guarantee Program
How to Export Consumer Ready Food Products to Indonesia



APPENDIX G:
UPCOMING TRADE EVENT SCHEDULE (Subject to change)
Date           Name of Event

1995
July           U.S. food products promotions:  TGIFridays, Tony
               Roma's, Grand Metro Equatorial Hotel, Diamond
               Supermarkets
7/17-18        ASEAN Healthcare Technologies Matchmaker
8/7-8          Food Service Seminar
8/23-Sept      Sogo U.S. Food Product
9/12-19        Market Place USA
9/13-14        U.S. Food Product Agent Show, Surabaya
9/25-26        State of California, Environmental Technology
               Partnership
10/8           U.S. Berkeley Client Visit
10/10          U.S. Small & Medium Enterprises Business Development
               Mission to ASEAN
10/21-25       State of Maine Trade Mission
10/23-24       West Virginia Trade Mission to Indonesia and
               Australia
10/25-26       Cortec Education Seminar
11/6-7         Sporting Goods Matchmaker
11/6-7         State of Nebraska Trade Mission
11/7-11        Manufacturing Indonesia Trade Show
11/7-11        Pollution and Environmental Technology Indonesia '95
11/12-14       1995 Asia Pacific Trade Exchange - TRADEC
11/22-25       Mining Indonesia
November       Executive Gas Mission
12/6-7         USA Catalog Exhibits
12/6-9         Oil and Gas Technology Indonesia
12/12-13       AMG Telecommunications MKR


1996
2/5-6          Clean Coal Trade Mission
February       ACE Matchmaker
March          - AMG Land Transportation Mission
               - Gourmet Food and Wine Exhibition
               - U.S. Food Product Promotion: Diamond and Makro
                 Supermarkets
3/8-10         International Franchise Expo
End March      Franchising MKR
April          Electric Power Generation/Transmission Matchmaker
May 6-7        Computer Software Trade Mission
May 14-18      State of Pennsylvania Trade Mission
Early June     Growth Industries
6/22-7/1       Indonesia Air Show
August         - U.S. Food Showcase
               - Highlight USA
```

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