Seb Country Analysis 2008 Indonesia

Indonesia SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS

August 29, 2008

Analyst: Rolf Danielsen. Tel : +46 8 763 83 92. E-mail : [email protected] The economy has surprised on the upside with growth exceeding 6% pa. so far in 2008, but rising inflation and fear of overheating have prompted the central bank to hike interest rates. Foreign investors have welcomed recent reforms to fight corruption and improve the business climate.

Country Risk Analysis

% growth pa.

píêçåÖ=Éñéçêíë=~åÇ=ÇçãÉëíáÅ=ÇÉã~åÇ=Äìçó=íÜÉ=ÉÅçåçãó=íç=íÜÉ=éçáåí=çÑ=çîÉêJ ëíêÉíÅÜK==cçääçïáåÖ=~ÅÅÉäÉê~íáåÖ=~Åíáîáíó=áå=OMMT=~ë=ÖêçïíÜ=éáÅâÉÇ=ìé=íç=SIPB=Ñêçã= RIRB=íÜÉ=éêÉÅÉÇáåÖ=óÉ~êI=ÉÅçåçãáÅ=Éñé~åëáçå=ÅçåíáåìÉÇ=~í=~=Äêáëâ=Åäáé=áåíç=íÜÉ=Ñáêëí= Ü~äÑ=çÑ=OMMUK==bñéçêíë=~ÅÅÉäÉê~íÉÇ=~åÇ=ÅçãÄáåÉÇ=ïáíÜ=ëíêçåÖ=ÇçãÉëíáÅ=ÇÉã~åÇ=Ñçê= ÄçíÜ=Åçåëìãéíáçå=~åÇ=áåîÉëíãÉåí=ÖççÇëK==qÜ~í=ï~ë=áå=êÉëéçåëÉ=íç=ãçåÉí~êó=éçäáÅó= É~ëáåÖK==få=OMMTI=íÜÉ=ÅÉåíê~ä=Ä~åâ=ÄÉäáÉîÉÇ=áí=Ü~Ç=Ö~áåÉÇ=Åçåíêçä=çîÉê=éêáÅÉ= ÇÉîÉäçéãÉåíë=ëÉÉáåÖ=ÜÉ~ÇäáåÉ=áåÑä~íáçå=Ñ~ääáåÖ=Ä~Åâ=íç=íÜÉ=í~êÖÉí=äÉîÉä=ÄÉíïÉÉå=RJTBK=== qÜ~í=É~ëáåÖ=Ü~Ç=ÑçääçïÉÇ=~=éÉêáçÇ=çÑ=ãçåÉí~êó=íáÖÜíÉåáåÖ=áå=êÉëéçåëÉ=íç=áåÅêÉ~ëÉÇ= îçä~íáäáíó=áå=ÑçêÉáÖå=ÉñÅÜ~åÖÉ=~åÇ=ãçåÉó=ã~êâÉíë=áå=OMMRI=ïÜáÅÜ=áå=íìêå=Ü~Ç= ÅçáåÅáÇÉÇ=ïáíÜ=~=ëÜ~êé=êáëÉ=áå=áåÑä~íáçå=íêáÖÖÉêÉÇ=Äó=íÜÉ=ÜáâáåÖ=çÑ=ÇçãÉëíáÅ=ÑìÉä= éêáÅÉëK==få=OMMSI=áåÑä~íáçå=ëìÄëáÇÉÇ=~åÇ=íÜÉ=ÅÉåíê~ä=Ä~åâ=îÉåíìêÉÇ=çå=~=Öê~Çì~ä=É~ëáåÖ= ïáíÜ=íÜÉ=ä~ëí=Åìí=áå=áåíÉêÉëí=ê~íÉë=çÅÅìêêáåÖ=áå=aÉÅÉãÄÉê=OMMTK=== = Bank credits to private sector kÉï=Äçìí=çÑ=áåÑä~íáçå=~åÇ=ÅêÉÇáí= Policy Interest rates (1M) Éñé~åëáçå=éêçãéí=ãçåÉí~êó=íáÖÜíÉåáåÖK== 35 táíÜ=íÜÉ=ÄÉåÉÑáí=çÑ=ÜáåÇëáÖÜí=íÜÉ=ãçåÉí~êó= 30 É~ëáåÖ=çÑ=OMMS=~åÇ=OMMT=ã~ó=åçï=~ééÉ~ê= Credit growth 25 éêÉã~íìêÉ=~åÇ=ãçêÉ=ëç=~ë=áí=ÅçãÄáåÉÇ= ïáíÜ=áåÅçãéäÉíÉ=ëíÉêáäáò~íáçå=çÑ=íÜÉ=Ä~ä~åÅÉ= 20 çÑ=é~óãÉåí=ëìêéäìëK==páåÅÉ=ä~íÉ=OMMSI=Ä~åâë= 15 Ü~Ç=êÉîáîÉÇ=íÜÉáê=äÉåÇáåÖ=~Åíáîáíó=~åÇ= Interest rate 10 íçï~êÇ=íÜÉ=ÉåÇ=çÑ=OMMT=ÅêÉÇáí=Éñé~åëáçå= 5 Ü~Ç=êÉ~ÅÜÉÇ=OTB=óçó=EóÉ~êJçåJóÉ~êFK==^ë= 2005 2006 2007 2008 ÅêÉÇáí=Éñé~åëáçå=~ÅÅÉäÉê~íÉÇ=áåíç=íÜÉ=Ñáêëí= èì~êíÉê=çÑ=OMMU=~åÇ=éêáÅÉ=éêÉëëìêÉ= ãçìåíÉÇI=íÜÉ=ÅÉåíê~ä=Ä~åâ=ÅÜ~åÖÉÇ=í~Åâ=~åÇ=Ñáå~ääó=áåÇáÅ~íÉÇ=íáÖÜíÉê=ãçåÉí~êó= ÅçåÇáíáçåë=Äó=~=MIORB=áåíÉêÉëí=ê~íÉ=ÜáâÉ=áå=j~óK==aìêáåÖ=íÜÉ=Ñáêëí=èì~êíÉê=çÑ=OMMUI=íÜÉ= `mf=áåÅêÉ~ëÉÇ=íç=UB=óçóI=~åÇ=~ÅÅÉäÉê~íÉÇ=íç=~äãçëí=NOB=óçó=áå=gìäóK==cçê=ëìêÉI=íÜ~í= êÉÑäÉÅíÉÇ=åçí=çåäó=ëâóêçÅâÉíáåÖ=ÅêÉÇáí=ÖêçïíÜ=~åÇ=ÜáÖÜ=Å~é~Åáíó=ìíáäáò~íáçå=áå= áåÇìëíêó=Äìí=~äëç=íÜÉ=áãé~Åí=çÑ=êáëáåÖ=ÖäçÄ~ä=ÅçããçÇáíó=éêáÅÉëK== = _ìí=ÜáÖÜÉê=ê~íÉë=ã~ó=Ü~îÉ=ëí~êíÉÇ=íç=ÄáíÉ=~åÇ=ÅçããçÇáíó=éêáÅÉë=ëÜçìäÇ=Ü~îÉ= éÉ~âÉÇK==qÜêÉÉ=ëìÄëÉèìÉåí=ê~íÉ=ÜáâÉë=Ü~îÉ=ê~áëÉÇ=éçäáÅó=ê~íÉë=Äó=N=éÉêÅÉåí~ÖÉ=éçáåí= EééF=~åÇ=ÅêÉÇáí=áåÇáÅ~íçêë=ëìÖÖÉëí=íÜ~í=íáÖÜíÉê=ãçåÉí~êó=ÅçåÇáíáçåë=~êÉ=ÄÉÖáååáåÖ=íç= ÄáíÉK==få=gìäóI=ÅêÉÇáí=Éñé~åëáçå=ëäçïÉÇ=íç=POB=óçó=Ñêçã=PQB=áå=gìåÉK=qÜçëÉ=~êÉ=ëíáää= Source: Reuters EcoWin

important your attention is drawn to the statement on the back cover of this report which affects your rights.

SEB Merchant Banking Country Risk Analysis August 29, 2008

Current account balance ($ bill.)

Exports, Imports ($ bill.)

ÜáÖÜ=Äìí=äçïÉê=íÜ~å=~í=íÜÉ=ÄÉÖáååáåÖ=çÑ=íÜÉ=óÉ~ê=áå=êÉ~ä=íÉêãëK==fåÑä~íáçåI=ÜçïÉîÉêI= ã~ó=ëíáää=ÅäáãÄK==cçê=~=äçåÖ=íáãÉ=ëìÄëáÇáÉë=ëìééêÉëëÉÇ=ãìÅÜ=çÑ=íÜÉ=áåÑäìÉåÅÉ=Ñêçã= ÜáÖÜÉê=ÉåÉêÖó=éêáÅÉëI=Äìí=áå=j~ó=íÜÉ=ÖçîÉêåãÉåí=ï~ë=ÑçêÅÉÇ=íç=ê~áëÉ=ÇçãÉëíáÅ=ÑìÉä= éêáÅÉë=Äó=OVBK==qÜ~í=Ü~ë=óÉí=íç=ëÉÉ=áíë=Ñìää=é~ëëJíÜêçìÖÜ=áåíç=ÜÉ~ÇäáåÉ=áåÑä~íáçåK== bñéÉÅí~íáçåë=~êÉ=åçï=Ñçê=`mf=áåÑä~íáçå=íç=éÉ~â=~í=NPB=Äó=óÉ~êJÉåÇI=ÄÉÑçêÉ=ëäçïáåÖ=íç= ëáåÖäÉ=ÇáÖáíë=íÉêêáíçêó=áå=ä~íÉ=OMMV=Ñ~ÅíçêáåÖ=áå=åçí=çåäó=íÜÉ=ÅççäáåÖ=çÑ=ÇçãÉëíáÅ= ~ÅíáîáíáÉë=Äìí=~äëç=ëçÑíÉê=áåíÉêå~íáçå~ä=éêáÅÉë=çÑ=ê~ï=ã~íÉêá~äëI=ÑççÇ=ëíìÑÑ=~åÇ=çáäK=== = cáëÅ~ä=éçäáÅó=ÅçåíáåìÉë=çîÉê~ää=ëíÉ~ÇóK=tÜáäÉ=êÉÅÉåí=óÉ~êëÛ=ãçåÉí~êó=éçäáÅáÉë=ã~ó=ÄÉ= ÇÉÉãÉÇ=íçç=ä~ñ=~åÇ=íÜÉ=ÅÉåíê~ä=Ä~åâ=êÉ~ÅíáîÉ=ê~íÜÉê=íÜ~å=éêç~ÅíáîÉI=ÑáëÅ~ä=éçäáÅáÉë= Ü~îÉ=êÉã~áåÉÇ=çîÉê~ää=ëíÉ~Çó=ÇÉëéáíÉ=ëçãÉ=ïÉ~âÉåáåÖK==få=OMMTI=íÜÉ=ÑáëÅ~ä=Ä~ä~åÅÉ= ÉåÇÉÇ=áå=~=ÇÉÑáÅáí=çÑ=NIOB=çÑ=damK=qÜ~í=ï~ë=MIV=éé=ÜáÖÜÉê=íÜ~å=áå=OMMR=~åÇ= ÉñéÉÅí~íáçåë=~êÉ=Ñçê=~=ÑìêíÜÉê=êáëÉ=çÑ=MIRéé=íÜáë=óÉ~êK=eáÖÜÉê=ÑìÉä=ëìÄëáÇáÉë=Éñéä~áå=~= é~êí=çÑ=íÜáë=ïÉ~âÉåáåÖ=~ë=ÇçãÉëíáÅ=éêáÅÉë=Ü~îÉ=êÉã~áåÉÇ=ÅäÉ~êäó=ÄÉäçï=áåíÉêå~íáçå~ä= ã~êâÉí=éêáÅÉëK==qÜ~í=áë=ëíáää=íÜÉ=Å~ëÉ=ÉîÉå=~ÑíÉê=~=ÜÉÑíó=éêáÅÉ=~ÇàìëíãÉåíë=áå=ä~ëí=j~óK== eçïÉîÉêI=éêçîáÇÉÇ=çáä=éêáÅÉë=Ü~îÉ=é~ëëÉÇ=íÜÉ=ÅóÅäáÅ~ä=éÉ~â=íÜáë=íáãÉ=~êçìåÇI=ëÜ~êé= ïÉ~âÉåáåÖ=çÑ=íÜÉ=ÑáëÅ~ä=áë=äáâÉäó=íç=ÄÉ=~îçáÇÉÇ=áå=OMMVI=~åÇ=ãçëí=çÄëÉêîÉêë=ÑçêÉëÉÉ=íÜÉ= ÇÉÑáÅáí=ÄÉáåÖ=Åçåí~áåÉÇ=ïáíÜáå=OB=çÑ=damI=ÉåëìêáåÖ=íÜÉ=ÅçåíáåìÉÇ=êÉÇìÅíáçå=çÑ= ÖçîÉêåãÉåí=ÇÉÄíLdam=ê~íáç=íç=PPB=~í=ÉåÇ=OMMVK==== = Foreign trade bñíÉêå~ä=Ä~ä~åÅÉ=êÉã~áåë=ÜÉ~äíÜóK== 13 ,0 mÉêáçÇë=çÑ=É~ëó=ãçåÉóI= 1,2 12 ,5 Exports åçíïáíÜëí~åÇáåÖI=íÜÉ=Ä~ä~åÅÉ=çÑ= 12 ,0 1,1 é~óãÉåíë=êÉã~áåÉÇ=ëíêçåÖ=áå=OMMTI= 11 ,5 CA balance 11 ,0 ~åÇ=OMMU=áë=äáâÉäó=íç=ëÉÉ=çåäó=~= 1,0 10 ,5 ãçÇÉê~íÉ=ïÉ~âÉåáåÖ=ÇìÉ=íç=ÇÉÅäáåáåÖ= 10 ,0 0,9 åÉí=Å~éáí~ä=áåÑäçïëK==få=OMMTI=êáëáåÖ=çáä= 9 ,5 9 ,0 éêáÅÉë=~åÇ=ëíêçåÖ=ÖêçïíÜ=áå=Éñéçêíë= 0,8 8 ,5 ã~êâÉíë=ëìééçêíÉÇ=~=ëíÉ~Çó=ëìêéäìë=çÑ= 8 ,0 0,7 íÜÉ=ÅìêêÉåí=~ÅÅçìåí=Ä~ä~åÅÉ=~í=ANM=ÄáääK= jan apr jul okt jan apr 2007 2008 JJ~Äçìí=íç=OB=çÑ=damK==píêçåÖ=Å~éáí~ä= áåÑäçïë=íç=íÜÉ=äçÅ~ä=ëíçÅâ=~åÇ=ÄçåÇ=ã~êâÉíë=~åÇ=Ñêçã=ÑçêÉáÖå=ÇáêÉÅí=áåîÉëíçêë= ÅçãéÉåë~íÉÇ=ANS=ÄáääK=çÑ=äçåÖ=íÉêã=äç~åë=Ñ~ääáåÖ=ÇìÉK==qÜ~í=~ääçïÉÇ=íÜÉ=ÅÉåíê~ä=Ä~åâ= íç=~ÇÇ=ANM=ÄáääK=íç=áíë=êÉëÉêîÉëI=ê~áëáåÖ=íÜÉáê=äÉîÉä=íç=íÜÉ=Éèìáî~äÉåí=çÑ=S=ãçåíÜë=çÑ= áãéçêíëK==få=OMMUI=íÜÉëÉ=íêÉåÇë=ÅçåíáåìÉÇK==bñéçêíë=éÉêÑçêãÉÇ=ïÉää=~ë=ÜáÖÜÉê=çáä= éêáÅÉë=ÅçãéÉåë~íÉÇ=êÉÇìÅíáçå=çÑ=çáä=Éñéçêí=îçäìãÉë=Å~ìëÉÇ=Äó=íÜÉ=å~íìê~ä=ÇÉéäÉíáçå= çÑ=ã~íìêáåÖ=çáä=ÑáÉäÇëK==`çåíáåìÉÇ=ëíêçåÖ=ÇÉã~åÇ=Ñêçã=^ëá~å=íê~ÇáåÖ=é~êíåÉêëI= áåÅäìÇáåÖ=fåÇá~=~åÇ=`Üáå~I=~äëç=ÜÉäéÉÇ=ëìëí~áå=åçåJçáä=Éñéçêíë=áå=Ñ~ÅÉ=çÑ=ïÉ~âÉê=rp= ÇÉã~åÇK==lå=íÜÉ=áãéçêí=ëáÇÉI=Äìçó~åÅó=ï~ë=åç=äÉëë=áãéêÉëëáîÉI=äÉ~îáåÖ=íÜÉ=íê~ÇÉ= ëìêéäìë=~Äçìí=ìåÅÜ~åÖÉÇ=áå=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=íÜÉ=óÉ~êI=~åÇ=íÜÉ=ÅìêêÉåí=~ÅÅçìåí=ëìêéäìë= éÉêÜ~éë=ëäáÖÜíäó=ìé=~ë=ëìééçêíÉÇ=Äó=~=ãçêÉ=Ñ~îçê~ÄäÉ=ëÉêîáÅÉë=~åÇ=áåÅçãÉ=Ä~ä~åÅÉ= ~åÇ=ëíêçåÖ=ÖêçïíÜ=çÑ=ïçêâÉêë=êÉãáíí~åÅÉë=Ñêçã=~Äêç~ÇK==cçê=íÜÉ=êÉã~áåÇÉê=çÑ=OMMUI= ÉñíÉêå~ä=íê~ÇÉ=Ñäçïë=~êÉ=ëÉí=íç=ïÉ~âÉå=áå=ÄçíÜ=ÇáêÉÅíáçåë=ÉñÅÉéí=çáä=Éñéçêíë=~ë= ëÜáéãÉåíë=áåÅêÉ~ëÉ=Ñêçã=íÜÉ=åÉï=`Ééì=ÑáÉäÇK==^ë=~=êÉëìäí=íÜÉ=ÅìêêÉåí=~ÅÅçìåí=ëÜçìäÇ= ëÉÉ=~=ëã~ää=áãéêçîÉãÉåí=íç=ANP=ÄáääI=Éèìáî~äÉåí=íç=OISB=çÑ=damK=qÜÉ=Ä~ä~åÅÉ=çÑ= é~óãÉåí=ëìêéäìëI=Äó=Åçåíê~ëíI=ÅçìäÇ=ëÜêáåâ=ëäáÖÜíäó=íç=AT=Äáää=ÇìÉ=íç=ëÜ~êéäó=êÉÇìÅÉÇ= åÉí=éçêíÑçäáç=áåÑäçïë=íç=~=ëíçÅâ=ã~êâÉí=íÜ~í=ëç=Ñ~ê=áå=OMMU=Ü~ë=éÉêÑçêãÉÇ=~äãçëí=~ë= éççêäó=~ë=íÜÉ=~îÉê~ÖÉ=çÑ=~ää=ÉãÉêÖáåÖ=ã~êâÉíëK==^ë=~=êÉëìäí=çÑ=ê~éáÇ=êÉé~óãÉåíëI= ÑçêÉáÖå=ÇÉÄí=EUPB=äçåÖ=íÉêãF=ëÜçìäÇ=Ñ~ää=íç=OSB=çÑ=damK=== = qÜÉ=ÖçîÉêåãÉåí=êÉâáåÇäÉë=íÜÉ=êÉÑçêã=éêçÅÉëëK==páåÅÉ=äçåÖI=áåîÉëíçêë=Ü~îÉ=ëÜáÉÇ= fåÇçåÉëá~=ÇÉëéáíÉ=áãéêçîÉÇ=ÖêçïíÜK==qÜ~í=áë=ÄÉÅ~ìëÉ=çÑ=áíë=êÉéìí~íáçå=~ë=~=ÇáÑÑáÅìäí= éä~ÅÉ=Ñçê=ÄìëáåÉëëI=Äìí=íÜ~í=ã~ó=åçï=ÄÉ=~Äçìí=íç=ÅÜ~åÖÉK=få=OMMTI=íÜÉ=ÖçîÉêåãÉåí= Source: R eut ers EcoW in

2

SEB Merchant Banking Country Risk Analysis August 29, 2008

áåíêçÇìÅÉÇ=~=ëäÉï=çÑ=ÄìëáåÉëë=ÑêáÉåÇäó=äÉÖáëä~íáçåI=áåÅäìÇáåÖ=~=åÉï=áåîÉëíãÉåí=ä~ï= íÜ~í=ëÜçìäÇ=éêçîáÇÉ=ÖêÉ~íÉê=Åä~êáíó=~åÇ=Éèì~äáòÉÇ=íêÉ~íãÉåí=Ñçê=ÇçãÉëíáÅ=~åÇ=ÑçêÉáÖå= áåîÉëíçêëK==qÜáë=ëÜçìäÇ=~ääÉîá~íÉ=ÅçåÅÉêåë=êÉÖ~êÇáåÖ=~ÇÇÉÇ=êÉÇ=í~éÉ=~åÇ=ìåÅÉêí~áåíó= ÇìÉ=íç=äçÅ~ä=äÉîÉä=ÄìêÉ~ìÅê~Åó=áå=íÜÉ=áåîÉëíãÉåí=éêçÅÉëë=ÉîÉå=íÜçìÖÜ=ëçãÉ=çÄëí~ÅäÉë= ïáää=êÉã~áå=áåÅäìÇáåÖ=çåÉêçìë=ä~Äçê=ä~ïë=~åÇ=ÜáÖÜ=ãáåáãìã=ï~ÖÉëK==jçêÉçîÉêI=åÉï= í~ñ=ä~ïë=ëÜçìäÇ=ÜÉäé=êÉÇìÅÉ=Åçêêìéíáçå=Äó=ÅìêÄáåÖ=íÜÉ=éçïÉê=çÑ=í~ñ=çÑÑáÅá~äë=~í= î~êáçìë=~Çãáåáëíê~íáîÉ=äÉîÉäëK==få=OMMT=íÜÉ=ÖçîÉêåãÉåí=~äëç=áåíÉåëáÑáÉÇ=áíë=ÑáÖÜí= ~Ö~áåëí=Åçêêìéíáçå=Äó=êÉãçîáåÖ=íïç=ãáåáëíÉêë=áãéäáÅ~íÉÇ=áå=~áÇáåÖ=ÑìåÇ=íê~åëÑÉêë=Ñçê= íÜÉ=óçìåÖÉëí=ëçå=çÑ=íÜÉ=ä~íÉ=jêK=pìÜ~êíçK=qÜ~í=ã~êâÉÇ=íÜÉ=ÖçîÉêåãÉåíÛë=Ñáêëí=ã~àçê= ëìÅÅÉëë=áå=éìåáëÜáåÖ=éÉêëçåë=ÅäçëÉ=íç=íÜÉ=ÑçêãÉê=éêÉëáÇÉåíá~ä=Ñ~ãáäóI=ïÜáÅÜ=Ü~Ç= êìäÉÇ=fåÇçåÉëá~=ïáíÜ=ÇáÅí~íçêá~ä=éçïÉêë=Ñçê=ãçêÉ=íÜ~å=~=ÖÉåÉê~íáçå=ìé=íç=NVVUK=== = ^äíÜçìÖÜ=ëíáää=Ñê~ÖáäÉI=éçäáíáÅ~ä=ëí~Äáäáíó=~åÇ=ÇÉãçÅê~Åó=~êÉ=äáâÉäó=ëíêÉåÖíÜÉåáåÖK=== aìêáåÖ=Üáë=íáãÉ=áå=çÑÑáÅÉ=ëáåÅÉ=ÉäÉÅíáçåë=áå=OMMQI=mêÉëáÇÉåí=vìÇÜçóçåç=Ü~ë=Öê~Çì~ääó= ÅçåëçäáÇ~íÉÇ=Üáë=éçïÉê=~åÇ=íÜÉ=áåÅìãÄÉåí=áë=ÉñéÉÅíÉÇ=íç=ïáå=åÉï=ÉäÉÅíáçåë=ÇìÉ=áå= OMMVK==jìÅÜ=áåíÉêÉëí=åçï=ÑçÅìëÉë=çå=é~êíó=é~êíáÅáé~íáçå=áå=~=éçëëáÄäÉ=åÉï=Åç~äáíáçå= ÖçîÉêåãÉåíK==qÜÉ=éêÉëÉåí=ÖçîÉêåãÉåí=áåÅäìÇÉë=î~êáçìë=ëíê~áåë=çÑ=éçäáíáÅ~ä=äáÑÉ=~åÇ=~ë= ëìÅÜ=Ü~ë=ÄÉÉå=~ÄäÉ=íç=áåíÉêå~äáòÉ=éçäáíáÅ~ä=éêçÄäÉãë=ÅçåÑäáÅíë=áåÅäìÇáåÖ=ïáíÜ=íÜÉ= éêÉëáÇÉåíÛë=~ÇîÉêë~êóI=íÜÉ=dçäâ~ê=é~êíó=çÑ=íÜÉ=ÑçêãÉê=pìÜ~êíç=êÉÖáãÉK=qÜÉ=Åç~äáíáçå= áåÅäìÇÉë=~äëç=íÜÉ=fëä~ãáëí=mêçëéÉêçìë=~åÇ=gìëíáÅÉ=m~êíó=ïÜáÅÜ=áë=ê~éáÇäó=Ö~áåáåÖ= éçéìä~êáíó=íç=íÜÉ=ÖêçïáåÖ=ÅçåÅÉêå=áå=ëçãÉ=èì~êíÉêë=~Äçìí=íÜÉ=êáëÉ=çÑ=fëä~ãáÅ= ÑìåÇ~ãÉåí~äáëã=~åÇ=íÜÉ=ÖêçïáåÖ=åìãÄÉêë=çÑ=éêçîáåÅÉë=íÜ~í=~Ççéí=ëó~êá~Ü=áåëéáêÉÇ= äçÅ~ä=ä~ïëK==lÄëÉêîÉêë=åçíÉ=íÜ~í=ÜáÖÜ=ìåÉãéäçóãÉåí=~åÇ=ïáÇÉëéêÉ~Ç=éçîÉêíó=ÅçìäÇ= éêçîáÇÉ=ÑÉêíáäÉ=ÖêçìåÇë=Ñçê=éçéìäáëí=~åÇLçê=ÉñíêÉãáëí=ãçîÉãÉåíëK==^=å~íáçå~ä=ëìêîÉó= çÑ=OMMS=êÉéçêíÉÇäó=ëÜçïÉÇ=íÜ~í=çåäó=NOB=ï~åíÉÇ=~å=fëä~ãáÅ=ÅçìåíêóI=ÜçïÉîÉêK===== JJGJJ= oÉÅÉåí=ÉÅçåçãáÅ=íìêÄìäÉåÅÉ=ÇìÉ=íç=êáëáåÖ=áåÑä~íáçå=Å~ìëÉÇ=Äó=íçç=ä~ñ=ãçåÉí~êó= éçäáÅáÉë=áå=OMMSLMT=Ü~ë=ëçãÉïÜ~í=Ç~ã~ÖÉÇ=íÜÉ=éáÅíìêÉ=çÑ=ÉÅçåçãáÅ=ëìÅÅÉëë=~ë= êÉÑäÉÅíÉÇ=áå=ëíêçåÖ=ÖêçïíÜ=~åÇ=çîÉê~ää=ÜÉ~äíÜó=ÉñíÉêå~ä=~åÇ=ÑáëÅ~ä=ÇÉîÉäçéãÉåíëK==qÜÉ= áããÉÇá~íÉ=ÑìíìêÉ=áë=íÜÉêÉÑçêÉ=äáâÉäó=íç=ÄêáåÖ=Öê~Çì~ä=ÅççäáåÖ=~ë=ãçåÉí~êó=éçäáÅáÉë= íáÖÜíÉå=íç=ÄêáåÖ=Ççïå=áåÑä~íáçåK==cçêíìå~íÉäóI=íÜÉ=ÖçîÉêåãÉåí=ä~ëí=óÉ~ê=êÉâáåÇäÉÇ=íÜÉ= êÉÑçêã=éêçÅÉëëI=ïÜáÅÜ=Ü~ë=áåÅêÉ~ëÉÇ=íÜÉ=~ííê~ÅíáîÉåÉëë=çÑ=fåÇçåÉëá~=~ë=~å= áåîÉëíãÉåí=ÇÉëíáå~íáçå=Ñçê=Éñéçêí=ÅçãéÉíáíáîÉ=ã~åìÑ~ÅíìêáåÖI=~ÖêáÅìäíìêÉI=ãáåáåÖ= ~åÇ=çáäLÖ~ëK==tÉ=ÄÉäáÉîÉ=íÜ~í=íÜÉ=ê~íáåÖ=~ÖÉåÅáÉë=ã~ó=óÉí=Ü~îÉ=íç=êÉÑäÉÅí=íÜÉëÉ= áãéêçîÉãÉåíë=áå=íÜÉáê=ëçîÉêÉáÖå=ê~íáåÖK==få=~=Åçìåíêó=êáëâ=éÉêëéÉÅíáîÉI=ÜçïÉîÉêI=íÜÉ= ÄìëáåÉëë=ÉåîáêçåãÉåí=áë=çÑíÉå=âÉóI=ïÜáÅÜ=áë=é~êíáÅìä~êäó=êÉäÉî~åí=áå=íÜÉ=ÅçåíÉñí=çÑ= fåÇçåÉëá~K= Key ratios

2008

Population (mill.)

234

How to read the chart? Moving out from the center reduces risk.

Resilience 12 10 8

GDP/capita ($)

2240

GDP (change)

6%

Inflation

Liquidity

4 2 0

11%

Curr.Acc. Balance/GDP

3%

Reserves/imports (months)

6

Budget balance/GDP

-1%

Government debt/GDP

35%

bñíÉêå~ä=ê~íáåÖëW= cáíÅÜW=__== pCmW==__J=

6

Macro balance

mÉÉêëW râê~áå~ mÜáäáééáåÉë= sáÉíå~ã=

Absence of event risk

Indonesia Philippines

Information

Average EM

Graph: The pentagon shows the creditworthiness profile of Indonesia similar to that of the Philippines, although weaker on most accounts. That includes resilience, reflecting issues such as governance and corruption. The macro balances is a relative strength.

= 3

SEB Merchant Banking Country Risk Analysis August 29, 2008

= Key data: 2003 2004 GDP (mill.US$) 235 017 256 712 1067 1150 GDP/capita (US$) GDP (change) 4,8% 5,0% Investments/GDP 20% 21% -2% -1% Budget balance/GDP Govt debt/GDP 57% CPI inflation (%) 6,8% 6,1% Money demand (%) 6% 7% 13% 56% Stock prices (%change) Interest rates 9,5% 7,4% Exch. Rate ($) 8574 8940 44% 47% Trade/GDP (%) Oil price (Brent) $29 $38 Millions US $ 64 108 70 766 Export of goods Imports of goods 39 546 50 615 Other: -16 457 -18 588 8 105 1 563 Current account ($ mill) 3,4% 0,6% (% of GDP) FDI -597 -1 512 Loan repayments -14 263 -15 604 11 031 17 363 Net other capital flows 4 276 1 810 Balance of payments Reserves 32 714 34 524 Total debt 135 224 138 372 o/w short term debt 22 866 23 901 Source: OEF (Oxford Economic Forecasting) and

2005

2006

2007

2008

2009

2010

285 436 1263 5,7% 22% -1% 47% 10,5%

364 396 1592 5,5% 22% -1% 39% 13,1%

433 201 1870 6,3% 22% -1,2% 37% 6,4%

525 124 2240 5,7% 24% -1,3% 35% 10,9%

595 152 2508 4,8% 25% -1% 33% 10,1%

658 423 2742 5,6% 24% -1% 31% 6,6%

12%

15%

16%

13%

8%

9%

37% 9,6% 9710 55% $54

31% 11,6% 9167 49% $65

53% 8,4% 9133 47% $73

8,6% 9217 50% $117

8,8% 9289 47% $113

8,1% 9399 45% $101

86 995 69 463 -17 255 277 0,1% 5 272 -12 407 4 958 -1 900 32 624 133 969 27 688

103 528 73 867 -18 826 10 835 3,0% 2 210 -16 280 9 549 6 313 38 938 130 863 31 725

118 014 85 295 -22 354 10 365 2,4% 2 138 -16 427 14 061 10 138 49 075 134 833 24 846

149 012 116 080 -19 487 13 445 2,6% 3 272 -16 093 6 900 7 524 56 600 137 470 25 046

156 938 123 104 -19 228 14 606 2,5% 3 983 -16 244 1 931 4 276 60 876 138 320 25 247

165 304 129 298 -18 929 17 077 2,6% 4 222 -13 877 -2 345 5 077 65 953 139 259 19 093

SEB estimates.

Rating history Fitch (eoy) BB B+ Moody's (eoy) B3 B3 B2 S&P (eoy) CCC CCC BType of government: Parliamentary Democracy Next elections 2009 Other: Latest PC deal 2005 Latest IMF arrangements 2003 SBA In te rn a tio n a l re s e rv e s

B+ B2 B+

B a n k c r e d its to p r iv a te s e c to r

70

1 ,2 1 ,1 1 ,0 0 ,9

50

IDR (10**(15))

USD (billions)

60

40 30 20

0 ,8 0 ,7 0 ,6 0 ,5 0 ,4 0 ,3

10 0

BBB2+ BB-

A s ia n c r is is

0 ,2 2005

2006

2007

0 ,1 1994

2008

1996

1998

2000

2002

2004

S o u rc e : R e u te rs E c o W in

J a k a rta S to c k E x c h a n g e 2750

600 Average

300

100

2250

Lost advantage since m arket turbu

2000 Index

Basis Points

2500

400

200

2008

S o u rc e : R e u te rs E c o W in

R isk P rem ium (spread) 500

2006

1750 1500 1250 1000

Indonesia

750 500

04

05 E M B I P lus, C om pos ite

06

07

250

08

97

98

99

00

01

02

03

04

05

06

07 08

E M B I Glo bal, Ind ones ia So u rce: R e uters E co W in

S o u rce : R e ute rs E co W in

= 4

SEB Merchant Banking Country Risk Analysis August 29, 2008

=

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SEB Merchant Banking. All rights reserved. =

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