The story of Indonesia’s economy over the past few decades is one of rapid growth and astonishing success.
Despite being a bit-player in the world economy as recently as 20 years ago, it is now the tenth-largest in the world in terms of purchasing power parity, a bonafide member of the G20, and can boast some of the highest annual GDP growth rates on the planet throughout the 21st century.
Much of this growth can be attributed to specific policies and market conditions, as well as the success of some of Indonesia’s true economic titans. For all its economic diversity, the Indonesian economy remains in many respects powered by a small handful of highly profitable mega-corporations, many of which have operations all over the world. But who are these corporate bigwigs? Read on to find out what you need to know about Indonesia’s largest companies.
1. Pertamina
Primarily Indonesia’s state oil and gas company, Pertamina has entered a league of its own over the past decade. Thanks to soaring oil revenues that have pushed its total AUM past $67 billion, Pertamina has expanded around the world to become the only Indonesian company in the global Fortune 500. Today, Pertamina has operations in energy, consulting, shipping automobiles, and infrastructure in multiple countries.
This, combined with the fact that Pertamina sells energy commodities on a global marketplace, is why foreign exchange prices have played a crucial role in the company’s success. As this expert forex trading guide explains, a multitude of market factors influences the prices of different currency pairs, such as the Indonesian Rupiah and the US Dollar.
These fluctuations directly determine the value of Pertamina’s oil exports on the market, which is why a weak Rupiah has been a huge boom to the company over the past year, as it has made its products cheaper on the global market.
2. Bank Rakyat Indonesia
With more than $8.3 billion in revenues last year, BRI is Indonesia’s largest bank, as well as one of the most influential financial players in the entire region. 70% of the bank is owned by the Indonesian state, while more than 30 million retail customers use the bank’s services every single day.
The bank had been largely a standard nationalized bank until the aftermath of the Asian Financial Crisis, during which BRI’s prudent finances meant that it was one of the only major banks to emerge unscathed. In the years following and throughout the 2010s, revenues jumped by more than 67%, as BRI began to majorly expand its services to domestic customers. Today, few banks can compete with BRI.
3. Gudang Garam
Finally, we have Gudang Garam, the iconic cigarette manufacturer with revenues exceeding $7 billion in 2019. The company is integral to the overall economy of Indonesia, acting as the largest single employer in the country, as well as in Taiwan.
Much of Gudang Garam’s success can be attributed to its diverse product offerings and highly globalized supply chains, which have allowed it to undercut its domestic competitors to offer more affordable products to its many millions of customers. Interestingly, the company also holds interests in sporting venues, with its crown jewel being Suryanaga Gudang Garam, one of the largest and most prestigious badminton clubs in Indonesia.
These are the economic titans that drive Indonesia’s booming economy today. Whether they will be able to hold onto their positions at the top of the pile amid dizzying economic change remains to be seen.