Indonesia has one of the world’s fastest growing economies and the largest in Southeast Asia. According to a recent article on BBC, Indonesia’s economy is growing at its fastest rate since 2004. Steady consumer spending, improved political stability and abundant natural resources combined with an increasing number of organisations reinvesting profits into their businesses are just a few of the contributing factors.
With a population in excess of 245 million people and growing, Indonesia is the fourth most populated country in the world and is home to a large domestic economy and labour force ready for foreign investment. This makes this country an attractive destination for foreign investment and a growing number of global organisations are increasingly taking advantage of this thriving economy.
Indonesia is home to a large, cheap labour force which is an attractive asset to manufacturers who can save a significant amount of labour costs by relocating their operations to the country. This combined with opportunities to access new markets through Indonesia’s geographical positioning as a gateway to other South East Asian countries like Thailand or India makes it an even more appealing location for doing business.
Located on an immense archipelago of over 17,500 islands, Indonesian culture is a mixture of different cultural, religious and ethnic influences. While there is a cosmopolitan vibe in the bigger cities where most things are written in English, it is important to prepare yourself for the cultural differences you may encounter when doing business in Indonesia.
One of the most challenging aspects of Indonesian culture is the diversity of religions practised in the country and the impact they have on business and social culture. Indonesia is currently the largest Islamic country in the world with approximately 202 million followers, and it is also home to a number of other religions including Catholicism, Hinduism and Buddhism.
While the Indonesian constitution guarantees the right to freedom of religion, its state ideology Pancasila includes an element of believing in ‘the one and only God’. Religion has a great impact on all aspects of Indonesian social and business culture so it’s essential to understand its role when doing business in Indonesia.
As the majority of the population of Indonesia is Muslim, you may find that a large number of your counterparts in Indonesia will adhere to Islamic practices such as Friday afternoon prayers. If you are running an operation in Indonesia, it is a good idea to create a prayer room in the office where they can take time for their religious beliefs. An intercultural training course like Doing Business in Indonesia can help you to understand other areas of Islam and how it may impact your interactions with Indonesian counterparts so that you can show respect to their requirements in the most appropriate way.
Religious diversity is only one aspect of doing business in Indonesia which foreigners may find challenging. An intercultural training course will help you to understand the other cultural beliefs and attitudes you will find when doing business in Indonesia. The importance of the group, respect toward elders and different communication styles are some of areas anyone doing business in Indonesia may find different from what they are used to.
Understanding how your Indonesian counterparts think and behave in the context of the cultural diversity of their society will help you to successfully navigate Indonesian social and business culture and harness the immense benefits of this dynamic economy and culture.
© Communicaid Group Ltd. 2011