Category: Economic Development

Japan welcomed the new year on a positive note, with its economy having shown signs of resilience in 2024, fueled by rising wages and growing private consumption. In the third quarter of 2024, GDP grew at an annualized pace of 1.2%, surpassing initial estimates. The government has approved a stimulus package worth 39 trillion yen (US$246 billion) to help lower-income households cope with rising costs and inflation. Part of this package will also be set aside to boost the AI and semiconductor industries through multi-year support programs.

Given these developments, analysts expect a bright outlook for fiscal 2025, coupled with improving business sentiment. The financial sector is set to be a key driver of growth, and strong corporate earnings are expected to propel stocks to record highs. Meanwhile, the real estate market is poised for steady growth as foreign investors, mainly from the Asia-Pacific region, snap up properties from logistics facilities and offices to high-priced condominium units in Tokyo and beyond.

The upcoming World Expo 2025, set to take place in Osaka from April to October, will provide Japan with the platform to showcase its technological and cultural strengths. As one of the largest gatherings of countries and businesses, the Osaka Expo has the potential to boost the economic importance of the Kansai region and create new opportunities for investment in Japan.

From Local to Global Success

Family-owned businesses are the foundation of the Japanese economy, making up more than 90% of all companies. Among them is Kikkoman, which has been doing business in one form or another for over 350 years. Under the visionary leadership of Honorary CEO and Chairman of the Board, Yuzaburo Mogi, Kikkoman has evolved into a global success story and become the focus of business school case studies.

From his many decades in management, Mogi has learned to focus on attracting and retaining the best possible talent to cope with upcoming changes in business and the economy. “Companies are realizing that in order to stay globally competitive, they need employees who have useful skills and good ideas, regardless of their age,” he says.

With nine production plants serving global markets, Kikkoman is set for further expansion in Europe and Asia, as Mogi notes, “there’s plenty of room for growth, regardless of economic ups and downs.”

Japanese Startups Making a Difference

The startup and innovation ecosystem in Japan is growing with support from the government, including funding and regulatory reforms. Two medical startups in Tokyo are commercializing their innovations to improve the health of people everywhere.

AI Medical Service Inc. has released an AI-based endoscopic diagnostic support device that can help doctors in diagnosing gastric cancer. Called gastro AI model-G, the device views gastroscopy imagery in real time and highlights potential areas of concern. The system has been approved by regulators in Japan, Brazil and Singapore, and the company has raised some 14.5 billion yen (US$93.4 million) in funding from venture capital firms and government subsidies.

Meanwhile, clinicians in Japan are now hoping that SONIRE Therapeutics Inc.’s high intensity focused ultrasound (HIFU) therapy will become a standard treatment for pancreatic cancer. In conventional radiotherapy, radiation damages both cancer cells and the surrounding healthy cells that it passes through. In contrast, HIFU waves can be focused on a small region inside the body and do not damage healthy cells.

Such breakthroughs and innovations, made possible through the collaboration between industry, academia and government, will remain a driving force behind economic growth.

Indonesia continues to demonstrate economic resilience despite global challenges, registering a 4.95% GDP growth year-on-year in the third quarter of 2024. The manufacturing and construction sectors were among the key drivers of this growth. As the largest economy in Southeast Asia, Indonesia is an attractive destination for investors, thanks to its political stability, favorable government policies, an abundance of natural resources and a large workforce. The country continues to attract domestic and foreign investment in diverse sectors, from construction and manufacturing to telecommunications and transportation.

Between January and September 2024, Indonesia attracted nearly US$81 billion in investment, mostly from foreign investors. The nation’s robust recovery in tourism is also boosting investor confidence. Indonesia attracted 10.37 million international tourists in the first nine months of 2024, marking a 20.28% increase compared to the same period in 2023. This positive trajectory in tourism has contributed to an increase in hotel investment. In June 2024, the Pan Pacific Hotels Group unveiled Pan Pacific Jakarta in Central Thamrin. The 158-room property reinforces the hotel’s role as a high-profile destination for both business and leisure travelers. It is the second of three properties that the hospitality group plans to open in Jakarta.

Startup Ecosystem Remains Vibrant

Meanwhile, Indonesia’s startup ecosystem remains vibrant, despite funding challenges due to global economic headwinds. In the first half of 2024, fintech, insurtech and enterprise applications emerged as the top sectors to secure funding, highlighting key areas of strategic growth within the industry.

Alpha JWC Ventures (Alpha JWC) remains one of the top venture capital firms in Southeast Asia, playing a key role in supporting some of the region’s most dynamic entrepreneurs in 2024. Locally, Alpha JWC is helping Indonesia strengthen its AI capabilities in a competitive global economy that is increasingly driven by technology. In August 2024, the firm officially launched the Artificial Intelligence Institute for Progress in collaboration with nonprofit organization Pijar Foundation, bringing industry players together to advance AI adoption in Indonesia.

Net Zero Commitment

Indonesia has made steady progress in energy transition as part of its commitment to achieve a net zero economy by 2060 or sooner. Over the span of almost a decade, the country’s new and renewable energy mix grew from around 5.35% in 2014 to 13.1% by the end of 2023.

At COP29, Indonesia reaffirmed its commitment to the Paris Agreement, unveiling plans to build 75GW of renewable power in the country in the next 15 years. The renewable projects will include solar, hydro, geothermal and nuclear power.

Pertamina, a state-owned energy company, is at the forefront of the country’s transition to a low-carbon future. The company is actively developing carbon capture and storage (CCS) and carbon capture utilization and storage (CCUS) technologies to boost oil and gas production while reducing greenhouse gas emissions.

In the downstream business, Pertamina continues to develop biofuels as part of its commitment to energy transition efforts. Its partnership with Toyota during an international auto show earlier this year showcased the potential of bioethanol as a sustainable transportation fuel.

Astra Group, one of Indonesia’s largest public companies, is also playing a part in Indonesia’s climate goals. The company is exploring new technological innovations and sustainable practices that could further enhance its environmental and social impact. One of the group’s flagship initiatives is its investment in electric vehicle infrastructure as part of its Future Mobility plan. It is also  expanding its Future of Mines initiative to transition away from coal dependence by exploring non-coal mineral mining. 

Indonesia’s pro-business climate is set to continue under the country’s new leadership. A new investment institution, Danantara, is designed to optimize the management of state assets outside the national budget and is projected to accelerate economic growth in the next five years. As Indonesia approaches its 80th year of independence, the nation is poised to embark on the next chapter with a clear vision and steadfast commitment to sustainable economic growth.

The Malaysian economy has continued to grow on the back of structural reforms, despite global turbulence and uncertainty. In the third quarter of 2024, the economy expanded by 5.3%, driven by strong investment activity and continued export growth. This brings GDP growth in the first nine months of 2024 to 5.2%, up from 3.8% in the same period last year. The robust performance reflects both business and consumer confidence in the Malaysian economy and the government’s economic management. The government has reaffirmed its commitment to strengthening governance and economic transformation as outlined in the MADANI Economy framework, designed to prepare the nation for an increasingly dynamic and complex global economy. Boosting Strategic Growth Pillars Malaysia is poised to emerge as a semiconductor powerhouse as global demand for high-tech equipment grows, driven by ongoing digital transformation across industries and the shift toward electric vehicles and renewable energy. The National Semiconductor Strategy provides clear policy direction to support the goal of elevating the sector further up the global value chain. Meanwhile, the digital economy is one of the fastest-growing sectors in the country, contributing 23% to Malaysia’s GDP in 2023. The government has approved digital investments worth RM185.3 billion (US$41.4 billion) between 2021 and June 2024, including ventures from global tech giants, to underscore its commitment to further developing the sector. The services industry, a cornerstone of Malaysia’s economy, continues to thrive, attracting a steady flow of investments. Real estate, information and communication technology and transportation services are among the top-performing sub-sectors. The government is focused on attracting investments in strategic high-growth and high-value industries that will steer the nation toward an innovation-driven economy, ensuring long-term resilience. Advancing Climate Goals and Sustainability Malaysia remains deeply committed to its sustainability goals, aiming to achieve net zero by 2050 and reduce economy-wide carbon intensity by 45% by 2030. Its decarbonization efforts encompass the adoption of energy efficiency measures, renewable energy sources, improved waste management practices and cutting-edge technologies. As Malaysia’s national energy company, PETRONAS plays a crucial role in advancing these goals. The firm is accelerating the energy transition through various pathways, including fostering and fortifying innovation ecosystems to deliver expedited, impactful solutions that shape a lower-carbon future. The group collaborates with businesses, educational institutions and government agencies to drive technological advancements, economic growth and climate actions. PETRONAS is also pursuing opportunities in high-value, lower carbon new businesses, including carbon capture and storage, renewables and hydrogen, in line with national energy and sustainability ambitions. Another sustainability-driven corporation is Sunway Group, which celebrates its 50th anniversary this year. Sunway has built its enduring success by pioneering a sustainable approach to urban planning, starting with Sunway City Kuala Lumpur, Malaysia’s first integrated sustainable township. With a unique Build-Own- Operate business model, Sunway is determined to play a role in providing good governance for its communities, regularly investing in projects that promote socioeconomic development and environmental protection. Sunway City Ipoh, the company’s second township, has an additional RM4 billion (US$920 million) worth of investment to support the city’s sustainable socioeconomic growth in the next decade. Looking Ahead Regionally, Malaysia calls for enhanced cooperation and solidarity among its neighbors as it assumes the chairmanship of ASEAN in 2025. It aims to push for greater commitment to enhance ASEAN intra-trade and investment and establish climate-conscious policies that will benefit all member countries. Looking ahead, Malaysia will continue “to embrace a spirit of openness, with a readiness to adapt, innovate and constantly push the boundaries of what is possible,” as stated by Prime Minister Anwar Ibrahim.

The Philippines achieved a robust GDP growth rate of 6.3% in the second quarter of 2024, driven by strong domestic demand, consistent public investments, and favorable macroeconomic conditions. This positive outlook, supported by the government’s commitment to infrastructure development and structural reforms, presents a wealth of opportunities for global investors looking for a dynamic and resilient market.

Resilient Growth Amid Global Challenges
Despite global economic challenges, the Philippines stands out for its resilience. The country has been on an impressive trajectory in recent years, with growth fueled by easing inflation, supportive monetary policies, and improvements in key infrastructure. The Asian Development Bank (ADB) expects the country’s GDP growth to be at 6% for 2024 and 6.2% for 2025, driven by solid consumer spending, buoyant services including tourism, and strategic investments. The World Bank has echoed this optimism, raising its growth forecast to 6% for 2024 due to improved investment conditions. These factors create a stable environment for investors, even in the face of external risks.

At the core of the Philippines’ growth story is the government’s ambitious infrastructure program. Under the “Build Better More” initiative, the government has allocated a staggering PHP9.14 trillion (US$158 billion) for 185 flagship projects, ranging from transport networks to renewable energy. This large-scale push is aimed at enhancing connectivity across the archipelago. This will further strengthen the country’s position as a vital trade and investment hub in the region.

Simultaneously, ongoing structural reforms—particularly in liberalizing key sectors such as telecommunications, energy, and transportation—are opening new doors for foreign participation.

Domestic consumption, which accounts for a significant portion of the country’s GDP, continues to expand. Supported by steady remittances from overseas Filipino workers, rising employment, and improving household incomes, broad-based spending continues to contribute to economic expansion. This is complemented by a young and dynamic population, which ensures a large and growing consumer base for businesses.

Key Sectors Shine With Investment Potential
Several sectors are poised to benefit from the country’s growth, presenting valuable prospects for investors. Services continue to outpace other industries with remarkable growth, having become a critical driver of the country’s development. Higher tourism revenues and service exports—including from the business process outsourcing (BPO) industry—are strengthening the current account.

The Philippines’ real estate market continues to boom, fueled by urbanization and demand for commercial spaces. Companies like AREIT, backed by the country’s leading full-service real estate developer Ayala Land, are leading the way in providing innovative pathways for investors to tap into the nation’s dynamic property sector. Forbes has recently dubbed the Philippines as the “world’s hottest luxury housing market,” with the Makati financial district marking the biggest jump in prime residential prices among 44 cities tracked in the Prime Global Cities report. The high demand for this premium location is propelling sales for high-end projects such as The Estate Makati, a 60-story architectural landmark by SM Development Corporation and Federal Land designed by Foster + Partners, which has garnered awards for design and sustainability.

Top conglomerate SM Investments Corporation has shown its commitment to more sustainable practices with significant investments in climate-resilient infrastructure and geothermal energy. This aligns with the country’s shift toward a low-carbon economy, enhancing energy security and attracting environmentally conscious investors.

SM’s banking arm, BDO Unibank Inc., is a prominent example of how the financial sector plays a pivotal role in supporting economic progress. As the government and private investors continue to embrace green development, BDO’s financing of multiple sustainable transport and renewable energy initiatives highlights its leadership in sustainability-conscious finance.

As a key player in global port operations, International Container Terminal Services, Inc. (ICTSI) is modernizing and expanding its operations to meet increasing demand, while prioritizing environmental responsibility. ICTSI’s investments in green ports and hybrid equipment position it at the forefront of sustainable logistics solutions.

A Bright Future for Business
A business-friendly environment has thrived in the Philippines thanks to economic liberalization, a growing middle class, and a proactive infrastructure agenda. The country’s potential for long-term growth is spurred by continuous improvements in government regulations and efficiency, as it commits to further modernize through digitalization and innovation. Key industries such as BPO are also evolving alongside breakthroughs in automation and artificial intelligence. As they expand to other locations and client bases, they drive socioeconomic advancement beyond the National Capital Region. This ensures that the entirety of the Philippines, and not just Metropolitan Manila, remains attractive and competitive on the global stage.

By offering a singular combination of solid economic fundamentals, a dynamic workforce, steady consumer demand, and a strategic location at the crossroads of Asia and the Pacific, the country is well-positioned for businesses looking to expand in the region.

The Philippines’ roadmap to success is clear. With the right focus and formula, the country is poised to continue its upward trajectory, offering compelling returns for astute global investors who appreciate its potential.

Thailand has come a long way and continues to develop and grow, transforming into a diverse economy. With world-class, homegrown brands encompassing industries such as prepared foods, shopping malls, hotels, fashion, transportation and much more, Thailand is working its way ever deeper into global consciousness.

Tourism and Travel: Key Drivers
Tourism is targeted to grow by 7.5% in 2025 with revenues of 3.4 trillion baht (US$101.5 billion) from nearly 40 million visitors, making the now fully recovered tourism sector a major economic driver.

Under fresh government leadership, Tourism and Sports Minister Sorawong Thienthong is implementing a number of new ideas while building on past successes. A big focus for the 2024-2025 high season is the “Thailand Winter Festival,” which comprises celebrations such as Loy Krathong (floating small boats) in November. Also in November is the Vijit Chao Phraya, a highly impressive, illuminated sound and light show on the Chao Phraya River.

The events above, together with the Bangkok Marathon on December 1, the Wonderfruit Festival from December 12-16, and the big New Year’s Countdown nationwide, are just some of the highlights, plus beer gardens that open throughout the “winter” months, for punters to enjoy the cool evening weather.

The Ministry of Foreign Affairs (MFA) is doing its part to bring in more tourists, working visitors, retirees and investors. New visa policies will streamline the application for longer-term, purpose-dedicated visas, acknowledging the benefits of freer mobility and short- to medium-term residency in the country. The policies also increase the number of eligible countries to increase visitor diversity.

Visa types include the Destination Thailand Visa (DTV), which permits stays of up to 180 days per visit. This multi-entry visa is valid for five years and costs only 10,000 baht (US$300).

It is ideal for digital nomads and those who see Thailand as a long-term wellness and lifestyle residence. Additional visas catering to the needs of international students and investors are also being rolled out.

The MFA expects this liberalization to boost local industry, create jobs, drive sustainable growth, encourage investment, and spur the influx of foreign technology and expertise, generating innovation and economic growth as Thailand continues to establish itself as a global hub of commerce, travel, investment and transportation.

In line with the government’s plans, Thai Airways (THAI) has been expanding and improving all aspects of its service, conducting refits, ordering dozens of new aircraft, and increasing its global network and reach by adding new international destinations.

THAI has also upped its service game, with enhanced Royal First and Royal Silk classes, and improved food and entertainment across flight classes—all delivered with the famous Thai smile.

THAI aims to be even more highly regarded than ever before, encouraging and supporting tourism while enhancing the country’s prestige internationally. To this end, the airline has invested heavily in new aircraft, such as the Boeing 787-9 Dreamliner and the Airbus A350-900 models. And with the Thai-cofounded Star Alliance and its 26 global partners, THAI passengers can access every corner of the globe.

Central Pattana, a leading property developer, is a subsidiary of the Thai-founded multinational conglomerate with interests in retail, property development, brand management, hospitality, and food and beverage.

Central Pattana, in the course of building premier malls, hotels and office spaces, has established itself as the dominant player in its sector with a portfolio of over 40 large luxury retail and mixed-use properties. In so doing, it has become the preferred partner for international and local brands entering Thailand’s retail market through landmark shopping centers such as centralwOrld and Central Phuket, among others.

Meanwhile, Central Chidlom, a flagship of luxury retail under Central Retail, has unveiled its spectacular transformation—a seven-story store that sets a new benchmark for high-end shopping in the city. The reopening features captivating and elegant architecture, opulent global brands such as Gucci and Prada, and 60 seriously delicious food outlets, catering to all tastes and budgets.

Dubbed “The Store of Bangkok,” the new Central Chidlom is the future of luxury shopping, promising a shopping experience on par with the finest luxury malls anywhere on the globe.

Feeding the World
Charoen Pokphand Foods (CP Foods) is a subsidiary of Thai conglomerate Charoen Pokphand Group (CP Group) and a leading player in the food and agro-industrial industries. The company’s product range span high-quality meats, premium seafood, and ready-to-eat meals. With operations in over 17 countries, CP Foods reaches billions of consumers across the world. As a matter of fact, the company’s products may be going even further; NASA astronauts will be eating CP Foods’ chicken dishes when they blast off into space next year—a testament to the safety standards, and universal appeal,
of its products.

Despite its achievements and scale, the company has reaffirmed its commitment to sustainability through innovation in “green” objectives. These include numerous initiatives to drive cleaner and more efficient eco-friendly production, in particular, by leveraging artificial intelligence and automation. The company’s strategy can be described as “Sustainovation,” the principle of combining technology, science, and innovation to improve efficiency and reduce the environmental impact of its operations.

Sappe, another of Thailand’s innovators, is an unusual beverage company—smaller than the giants but with swift growth and enviable inventiveness. The company has developed a knack for keeping up with ever-evolving tastes—locally, regionally and beyond. This has led to international revenues more than tripling over the past eight years and a spot on Forbes Asia’s “Best Under A Billion” list that the company has held for three years running.

Sappe produces popular beverages that are marketed under brand names such as Sappe Beauti, B’lue, and Sappe Aloe Vera, among others.

The company’s flagship product, and also its best selling by far, is Mogu Mogu. Mogu Mogu broke new ground in 2001 when it emerged as a snack-in-a-beverage—a fruit juice laden with coconut jelly cubes—which customers embraced as a tasty and healthy treat. Mogu Mogu now sells in more than 100 countries, including the U.K. and France.

Singapore continues to attract global businesses and entrepreneurs seeking new growth opportunities in Asia, which is the fastest-growing economic region in the world. Its advanced infrastructure, pro-business policies, highly skilled workforce and global connectivity have strengthened its position as the premier business hub and gateway to Asia and beyond. Singapore has consistently been ranked among the top business environments and as one of the freest economies.

In 2023, Singapore attracted S$12.7 billion (US$9.72 billion) in fixed asset investment, demonstrating the confidence investors place in the country as a trusted hub for business. To strengthen Singapore’s competitiveness, the government aims to build new growth areas such as the green economy, artificial intelligence and precision medicine, and to anchor innovation and catalyze collaboration between multinational corporations, local businesses and research ecosystems.

Economic Resilience
Despite the ongoing geopolitical tensions and market uncertainties, Singapore’s economy saw a better-than-expected growth of 2.9% in the second quarter of 2024 compared to the same period in 2023. This is mainly driven by the group of clusters comprising the information and communications, finance and insurance and professional services sectors. Expansion in the finance and insurance sector was largely supported by activities supplementary to financial services, banking and fund management segments.

Singapore’s assets under management (AUM) grew by 10% to S$5.41 trillion (US$4.14 trillion) in 2023, faster than the AUM growth in Asia. About 77% of AUM is sourced from outside of Singapore and 89% of total AUM is invested outside the country. As a global financial hub, Singapore has established itself as one of the leading private banking and wealth management centers globally.

Financial institutions like Standard Chartered Private Bank are well-positioned to capitalize on the growing affluence in Asia and the significant wealth transfer occurring in the region. For example, the bank’s Singapore wealth hub makes it an ideal conduit for connecting global Indian clients with their financial interests back home in India and across other major regions, including Greater China, the United Kingdom and the Middle East. These clients seek not only to grow their wealth, but also to manage it seamlessly across borders.

The growing demand for wealth planning and advisory services has also contributed to the popularity of independent wealth management firms like WRISE. In just two years, WRISE has experienced remarkable growth, expanding its presence in key financial hubs across Asia to cater to the growing cross-border needs of its clients. The firm views itself as a complementary partner to banks, offering the best of the banks’ specialized services that can enhance the overall wealth management experience for its clients.

Singapore will continue to build new capabilities in its financial services sector to ensure it remains robust and resilient.

Looking Ahead
The 2024 economic outlook remains optimistic, with analysts forecasting that the growth momentum will improve in the second half of the year, leading to a full-year GDP growth of 2% to 3%.

To remain competitive, Singapore will intensify its efforts in several areas. It will strengthen its role as a base for global companies operating in Asia and invest in research and development, serving as a global-Asia node for technology, innovation and enterprise. The financial sector will continue to support the flow of finance for regional growth, including infrastructure and sustainable development, serving global investors seeking to tap into investment opportunities in Asia.

Singapore will also continue to broaden and deepen its trade linkages with international and regional partners to strengthen its position as the gateway to Asia and the rest of the world.

Japan’s economy is poised for continued moderate recovery, fueled by increasing private consumption, favorable financial conditions and the government’s economic measures. Despite global economic challenges in 2023, exports and industrial production have remained relatively stable due to a reduction in supply-side constraints. Corporate profits have remained high, reflecting an overall improvement in business sentiment. Japan’s stock market made historic gains in 2023.

The tourism sector in Japan has been a standout performer, demonstrating steady growth in 2023. The country welcomed around 22.3 million visitors from January to November 2023, according to Japan National Tourism Organization. The boost in tourist arrivals was supported by a resumption in international flights to 80% of pre-pandemic levels, as demand from Southeast Asia, North America, Europe and Australia grew.

Looking into 2024, Japan’s economy is expected to sustain growth, primarily driven by robust domestic demand. The yen, having weakened in 2023, may strengthen against the US dollar if the Bank of Japan rapidly normalizes its monetary policy, according to financial services group Nomura. Promising sectors include semiconductor production equipment exports, benefiting from the bottoming of the inventory cycle and peaking U.S. interest rates. Domestically, growth opportunities are evident in sectors such as systems and applications, real estate and food, says Nomura.

While the positive trajectory is encouraging, the Japanese economy faces headwinds from the slowdown in foreign economies, global monetary tightening and concerns about the Chinese economy. Additionally, geopolitical tensions and market volatility continue to be downside risks.

In navigating uncertainties, corporate leaders are adopting innovative strategies to sustain growth. Akihiro Teramachi, Chairman and CEO of THK, emphasizes the importance of flexibility and having the right mindset in capitalizing on business opportunities amid the ongoing wave of change. THK’s approach involves integrating hardware and digital technologies into manufacturing processes and end-products, particularly for the automotive, robotics, semiconductor and electronic component sectors. The company’s linear motion components, for example, can be incorporated into electric cars, making them energy-saving, energy-efficient, compact and powerful. Such solutions could have a substantial impact on the growth of Japan’s automotive industry.

Beyond profits, businesses are recognizing the significance of corporate social responsibility. Soy sauce maker Kikkoman, with a history spanning over 300 years, is committed to being a good corporate citizen. Honorary CEO and Chairman of the Board Yuzaburo Mogi highlights the company’s dedication to working with local communities for the long term. Kikkoman has pledged a total of US$5 million to the University of Wisconsin to advance research into sustainable crop cultivation and the environmental conditions of the Great Lakes water system.

Seiko Epson is also making headway in realizing its Environmental Vision 2050, staying true to the spirit of its founders in protecting the local environment. The company aims to become carbon negative and eliminate the use of non-renewable underground resources such as petroleum and metal ores by 2050. As a global printing leader, Epson came up with the Dry Fiber Technology, a paper recycling process that preserves water and wood resources and reduces carbon dioxide. Epson’s long-standing dedication to efficient, compact and precise innovation is ingrained in its DNA, reflecting both technological prowess and a strong commitment to reducing environmental impact.

In the face of global challenges, Japan’s economy remains resilient, fortified by the dynamism of its corporations and a sustained commitment to innovation.

Indonesia’s economy continues to record growth in the third quarter of 2023, with gross domestic product expanding by 4.94%, primarily driven by strong private consumption. Investment continues to demonstrate a noteworthy performance, with a growth rate of 5.77% in the third quarter, surpassing the 4.63% recorded in the second quarter. While the growth of real exports has decelerated due to softer external demand, the services exports sector maintains its momentum, propelled by a surge in international travelers.

Given these dynamics, Indonesia’s Finance Minister Sri Mulyani Indrawati anticipates that economic growth for 2023 will hit 5.04%, with expectations of acceleration in 2024.

Promising Destination for Investors

With its abundant natural and human resources, coupled with anticipated robust economic growth and diverse potential, Indonesia emerges as a promising destination for investors. President Joko Widodo affirmed the nation’s commitment to fostering a conducive and competitive investment climate during the 2023 Asia-Pacific Economic Cooperation (APEC) Summit.

Key investment opportunities lie in priority sectors, notably the industrial downstream sector. Capitalizing on its large nickel reserves, Indonesia harbors ambitious plans for the expansion of its electric vehicle industry. In just three years, Indonesia has inked agreements worth more than US$15 billion for battery and electric vehicle production with multinational manufacturers. The country aims to produce 600,000 electric vehicles by 2030, kicking off production next year.

The energy transition sector stands as another pivotal area that requires investment, knowledge and cutting-edge technology. Indonesia currently boasts a renewable energy potential of 3,600 GW and is actively engaged in the development of a Green Industrial Park covering 30,000 hectares. Moreover, Indonesia’s new capital city, Nusantara, presents diverse investment opportunities across sectors such as infrastructure, transportation, technology, education, energy, finance, tourism, health and housing.

Against this backdrop, the president urged investors to seize opportunities more aggressively and quickly, emphasizing that the current environment presents an ideal time to invest in Indonesia.

Startup Ecosystem Has Room to Grow

In the realm of digitalization, the country has fostered a vibrant tech ecosystem, producing multi-billion-dollar tech platforms, super apps and tech startups. A leading investor in the tech startup space is Alpha JWC Ventures. The Indonesia-based venture capital firm has established a remarkable track record for grooming some of the region’s most successful tech companies. Despite a sluggish global economy that has led to declines in tech company stocks, the region, and in particular Indonesia, continues to attract heightened interest from international investors, according to the venture capital firm.

Compared to mature markets like Silicon Valley or Europe, ASEAN’s tech industry and its startup ecosystem have plenty of potential to grow. In the long term, Alpha JWC’s vision is to help place Indonesia and the wider ASEAN region firmly on the global tech scene.

Manufacturing Sector a Driving Force

In the meantime, Indonesia’s manufacturing sector continues to stand out as one of the primary contributors to the national economy. An exemplary player is Jakarta-based paint and coating manufacturer, PT Mowilex Indonesia (Mowilex), which has effectively maintained its position as one of the market leaders in the country. Niko Safavi, CEO of Mowilex, says, “What has enabled our company to remain competitive in an industry dominated by multinationals and strong domestic players is not only our environmental stance or thought leadership, but also our relentless pursuit of delivering high-quality products to the market.”

The company was the first domestic paint and coating manufacturer in Indonesia to produce water-based paints in the 1970s, back when lead-based and solvent-based paints, known for their potential long-term health risks and emissions, were widely used. More recently, Mowilex has reinforced its commitment to environmental sustainability by launching Indonesia’s first plant-based paint, reflecting its aspiration to be at the forefront of eco-friendly innovation.

Another manufacturer driven by a culture of innovation is PT Nippon Indosari Corpindo Tbk. (Indosari), the company behind Indonesia’s leading bread brand, Sari Roti. Within the manufacturing sector, the food and beverage industry stands out as one of the engines of growth in the country, and Indosari has demonstrated resilience by deliver ing profits amid challenging conditions.

The company plans to work with a leading milk producer to enter the beverage category with a new product, Sari Choco Milk. It will also expand into the spreadable space with Choco Spread, as it seeks to enrich its product portfolio and reduce its reliance on packaged bread.

Coal Exports Continue to Surge

Notably, Indonesia’s exports of thermal coal surpassed 413 metric tons over the first 10 months of 2023, cementing its position as the world’s largest coal exporter. This marked an impressive 11.5% surge compared to the same period in 2022, reflecting that coal exports remain a cornerstone of Indonesia’s economic momentum. Geo Energy Resources, a low-cost coal producer in Indonesia, has recently made strategic investments to increase its coal reserves, ensuring the sustainability of its business for the next 20 years. The low sulphur and low ash content of its coal reserves will attract strong demand from domestic and international markets, particularly Asia, and command a premium above market price, the company says.

As Indonesia strides forward, balancing innovation across sectors with traditional strengths in global trade, it solidifies its standing as a formidable force on the world economic stage.