Doing business in Indonesia
With the recent end of negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), bilateral trade between Australia and Indonesia is set to surge.
Good communication will be essential to successful trade relations between the two countries. How does Indonesia, a country with over 255 million citizens and hundreds of local languages, communicate? And how can we communicate most effectively with them?
If you’ve been to Bali and asked the locals how to say thank you, they likely would have told you the Balinese suksma. In Jakarta, the national capital on the island of Java, they might say the Sundanese hatur nuhun, and over in Jogjakarta they would use the Javanese matur nuwun. But anywhere in Indonesia, you could say the Indonesian terima kasih.
Indonesian, or Bahasa Indonesia locally, is based on Malay, which is also spoken in Malaysia, Singapore and Brunei, making it one of the top ten spoken languages in the world. In 1928, the Indonesian nationalist movement of the then-Dutch colony chose it as the language for their future nation. Because of trade, it was already a lingua franca across much of the archipelago. Today, many Indonesians speak several languages including their local language and Indonesian. Local languages, as demonstrated above, are not related to Indonesian. They also use different scripts, whereas Indonesian is written in Latin script, the same as English.
Indonesian leader Soekarno declared independence in 1945. He was overthrown by Soeharto in 1968, who ruled until 1998. The fall of Soeharto marked the beginning of the period known as Reformasi, a self-explanatory name of many democratic reforms.
A new chapter in Australia’s relationship with Indonesia
Identified as a priority in the Australian Department of Foreign Affairs and Trade’s 2016 Foreign Policy Whitepaper, the end of formal IA-CEPA negotiations was marked by President Joko Widodo and Prime Minister Scott Morrison at a meeting in Indonesia in late August 2018. The deal will be signed by the end of 2018 once it is translated into Indonesian and checked for compliance with local laws of both countries.
Indonesia’s economy, currently worth around three trillion US dollars and the sixteenth largest in the world, is set to grow to 5.9 trillion by 2030 and will be in the top five biggest economies globally, according to the White Paper.
Key benefits are expected to include annual quotas of Australian agricultural imports, increased Australian ownership of Indonesia-based businesses including education institutions and hospitality venues and eliminating tariffs on Indonesian imports to Australia.
Crack the Indonesian market – now!
A key consideration when breaking into an overseas market is how you’re going to communicate with your target audience. There’s no point placing newspaper ads in a country with low literacy, or doing online marketing in English when people can access plenty of content in their native language.
Indonesian media is predominantly presented in Indonesian including television, radio, major newspapers and advertising. It is also the sole language of politics, administration and the judiciary. English is widely studied although English proficiency is lower in Indonesia than other South East Asian countries. The English First proficiency index ranked Indonesia 32 out of 72 countries surveyed.
According to the United Nations, literacy is relatively high in Indonesia with a rate of 95.38% for the population 15 years and older. It is somewhat lower with the population 65 years and older having a literacy rate of 70.06%.
Indonesians are also among the world’s biggest social media users. There were 132.7 million internet users in 2016 (InternetWorldStats), Facebook is enormously popular and Indonesians are among the world’s most active Twitter users. This means there are cheap (even free), quick and easy ways to market to Indonesian consumers. Text-based advertising in Indonesian has enormous potential reach.
With the new partnership agreement, a huge local market and a well-established lingua franca, Indonesia is primed for international trade and now is the time to get involved.
Key Indonesian phrases
Good morning: selamat pagi
Good afternoon (used for around 11am to 2pm): selamat siang
Good afternoon (used from 2pm until sunset): selamat sore
Good evening: selamat malam
Hello (informal): halo
Thank you: terima kasih
Excuse me: permissi
Do you speak English?: Bisa bahasa inggris?
How much does this cost?: Berapa harganya?
My name is …: Nama saya …
Counting in Indonesian
Some helpful links to get you started in doing business in Indonesia
Written by Sophia Dickinson, Lexigo: Sophia Dickinson has 10 years’ experience in public service for both federal and state governments. She has also taught English in France and spent a year working at a local NGO in Yogyakarta, Indonesia. She is passionate about writing, intercultural communication and languages (she speaks French, Indonesian and is learning Spanish). Read more about her experiences at sophiadickinson.com.au