Demographic Advantage

Population – Indonesia is the 4th most populous country in the world, having a current population of 276 million people. Even though population growth has slowed marginally in recent years, the growth rate stands at 1.1%, and this continued growth will push the population to 291.69 million people by the year 2035. The abundance of people lends several advantages to the rising heavyweight that is Indonesia. It offers one of the largest potential consumer bases to launch sustainable corporate and economic growth.

 Moreover, with over 67.8% of the population constituted by people of working age, Indonesia possesses the 4th largest labor force in the world. Increasing levels of literacy and skill will only increase human capital and make Indonesia a reservoir of opportunity. To capitalize on said opportunity, investments in Indonesia must be guided by (among other factors) the geographic distribution of Indonesia’s population as well as the regional variation in economic growth. Each of these elements, as displayed in the image below, is integral to being a successful stakeholder in Indonesia’s growth story.

Ethnic and religious diversity – Indonesia is home to several different ethnicities spread across its vast geographic expanse. As indicated in the chart below, the Javanese form the nation’s largest ethnic group, constituting over 40% of the country’s population as of 2010, and they are followed by the Sundanese and Malay communities who come in at second and third place respectively. The chart below also illustrates the tremendous ethnic diversity that exists in Indonesia. There are so many small ethnic groups across the country that together they constitute over 31% of the population but individually each group comprises less than even 3%. To read more about Indonesia’s different ethnic communities, follow the link below:

Religious diversity is also an important component of Indonesian society. Even though about 87% of the Indonesian population practices Islam, Indonesia is a secular country that does not have a single state religion. Apart from Islam, Protestantism, Catholicism and Hinduism are the three major religions adhered to by the Indonesian people. The chart below provides the segmentation of Indonesia’s population by religious group and, thus, offers a look into the country’s religious diversity. To learn more about Indonesia’s religious diversity, follow the link below:

Age – Indonesia has a relatively young population and, as displayed in the chart below, the majority of its people are under the age of 45. Not only does this offer companies the chance to capitalize on one of the world’s largest labor forces but it also holds positive prospects for long term growth. Unlike some of its regional peers, Indonesia is not haunted by the possibility of an ageing population problem and this makes it a very attractive market to invest in. 

Literacy Rate (% of people ages 15 and above) – 95.66%

Quality of Infrastructure Ranking – In 2019 Indonesia ranked 67.7th in terms of quality of infrastructure. While there is certainly room for improvement, what stands out is the progress that has already been made. As can be seen from the chart below, Indonesia stood at 96th place in the year 2008 but over the course of the last 10 years it has climbed the ladder by 24 spots. This is a testament of the Government’s commitment to elevating Indonesia’s economy and fueling continued growth. As infrastructure continues to improve so will the ease of doing business, thus, making Indonesia an increasingly attractive emerging market from an investor’s perspective.

Indonesia’s quality of infrastructure may not be the most sophisticated in the region, but it is comparable to other ASEAN emerging markets. The chart below provides a comparative 


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