Doing business in... Indonesia

Sihar Sitorus, Pawan S. Budhwar

Research output: Contribution to journalArticlepeer-review


Indonesia's long stability of over three decades came to a sudden end after the regional economic crisis of 1997–1998. The economic crisis not only shattered the Indonesian economy but also resulted in political turmoil. The national leadership has changed three times over the last five years. In such conditions, the confidence of foreign investors is very low. The present government has initiated a number of steps to restore political stability and economic recovery. This article provides useful information on the complex business environment, aimed to help foreign investors to develop a good understanding on key background knowledge for being successful in Indonesia. It reviews Indonesian historical development, political structure and climate, regional relations, and economy and foreign trade. Indonesia's infrastructure, legal framework, sociocultural setup, as well as market structure and potential, are also analyzed.
Original languageEnglish
Pages (from-to)587-609
Number of pages23
JournalThunderbird International Business Review
Issue number5
Publication statusPublished - Sept 2003


  • Indonesia
  • regional economic crisis
  • 1997–1998
  • economic crisis
  • Indonesian economy
  • political turmoil
  • national leadership
  • foreign investors
  • political stability
  • economic recovery
  • business environment
  • Indonesian historical development
  • politic
  • foreign trade
  • infrastructure
  • legal framework
  • sociocultural setup
  • market structure
  • potential


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