Indonesia has come a long way since the 1997 Asian economic crisis and the ensuing riots that saw the downfall of President Soeharto the following year. Its rate of growth has slowed down, no doubt, but on average, it stayed above 5 per cent per annum over the past decade. As the fourth most populated country, third largest democracy in the world and largest market in Southeast Asia, it is now positioned as the world's sixteenth largest economy in terms of GDP, and some projections see it becoming the seventh largest economy by 2030. Its impressive growth has been fostered by vast natural resources, a stable political environment promoted by a successful democratization process, and a rapidly growing consumer class within a young population.
However, the country is also notorious for a number of persistent problems when it comes to setting up and running businesses. The most commonly cited ones are underdeveloped infrastructure, convoluted bureaucracies, frequent project delays or breakdowns, and large skill gaps in human resources. It is lacking in skilled and semi-skilled workers, as well as entrepreneurs who can scale up their businesses. Data from the Ministry of Cooperatives and Small and Medium Enterprises (2012– 13) show that there were 57,896,721 micro, small, and medium-sized enterprises (MSMEs, or usaha mikro, kecil, menengah, UMKM), making up about 99.99 per cent of the total business units, while big enterprises totalled only 5,066 (0.01 per cent). As pointed out by Finance Minister Sri Mulyani on 2 August 2016, more than 107.6 million Indonesians are working in MSMEs, a segment which contributes to 60.6 per cent of the country's GDP.
In short, Indonesia has a very large pool of “self-employed” entrepreneurs. However, most of them have questionable or no formal training or qualifications, particularly in dealing with non-Indonesians. Other factors hampering these businesses are the dominance of natural resource extraction (such as mining and agriculture) in the economy, convoluted bureaucratic procedures, difficulty for small businesses to access capital, and the generally low level of education.
It has long been assumed that Indonesian Chinese (who make up between 1 to 3 per cent of the population) form the bulk of the business class (Chua 2008), and that this economic imbalance has been the source of recurrent tensions (Wanandi 1999). But with the Indonesian economy rapidly globalizing, this may be changing.