FOUR POTENTIALS TO ACCELERATE INDONESIA'S GOLDEN AGE: OLIVER WYMAN

New report uncovers how impetuses in Indonesia's macroeconomy,carbon economy,energy transition,and artificial intelligence-driven growth can propel its Golden Indonesia 2045 vision

JAKARTA,Indonesia,Nov. 21,2024 --OliverWyman,a global management consulting firm and a business of Marsh McLennan (NYSE: MMC) today unveiled its latest report "Unlocking The Age Of Golden Indonesia",which identifies four major areas that will further amplify Indonesia's growth and help the country progress towards its Golden Indonesia 2045 (Emas 2045) vision.

From left to right: Hendy Kurniawan,Oliver Wyman; Ben Simpfendorfer,Oliver Wyman Forum; Ajit Raikar,Validus Capital; Eddi Danusaputro,BNI Ventures; Tim Colyer,Oliver Wyman; Seo Young Lee,Oliver Wyman; Felia Salim,Oliver Wyman; Michellina Laksmi Triwardhany; Daniel S Purba; Wisnu Medan Santoso,Pertamina; Abhi Bhuchar,Oliver Wyman; Anosh Pardiwalla,Oliver Wyman

While Southeast Asia's largest market has seen a decade of transformative economic growth and social progress,at the macroeconomic level,the country needs to better diversify its industries and ramp up its infrastructure development to open new markets and enhance accessibility. Key new fields that Indonesia should emphasize include its promising carbon economy,investments in clean energy transition,and growth powered by innovations,such as artificial intelligence (AI).

Dr. Riyatno,S.H.,LL.M,Deputy Minister for Investment Climate Development (middle),along with moderator Ben Simpfendorfer and fellow panelist Michellina Laksmi Tirwardhany,at the Oliver Wyman Unlocking The Age of Golden Indonesia Summit on 20 November 2024

Seo Young Lee,Partner and Head of Southeast Asia,Oliver Wyman said: "Looking ahead,Indonesia will have to navigate global changes and a rebalancing of supply chains,but with its refreshed government,robust economic policies,growing digital economy,and rising investments in infrastructure,we believe the country is poised for sustained growth and development."

Key insights from the report include:

Foreign investors rediscovering Indonesia's opportunities: In the first quarter of 2024,Indonesia achieved an investment realization of IDR 401.5 trillion (approximately US$24.7 billion) according to Bank Indonesia — an increase of 22.1% over the previous quarter.[1] Key sectors such as manufacturing,mining,telecommunications,and transportation continue to lead as the highest contributors to this figure,with the food and beverage industry also emerging as a significant earner.

Natural advantage and value of Carbon Capture,Utilization,and Storage (CCUS): Indonesia's favorable location and considerable capacity for CO2 storage position it as an ideal location to develop a CCUS end-to-end value chain. CCUS in Indonesia,specifically from the overall industrial sector,including steel and cement,could be worth up to US$1.8 to 2.7 billion annually by 2050. Combining domestic and international CO2 markets,the total attributable market size for CCUS in Indonesia amounts to US$2.3 to 3.2 billion annually by 2050.

Advancing net zero targets: The way forward involves prioritizing renewable energy for all new capacity,investing in transmission and distribution infrastructure,and storage,deploying the off-balance sheet to lower financing costs,and creating investor certainty through system-wide target setting.

Indonesia needs an AI strategy: Indonesia has seen US$1.9 billion foreign investments in AI,[2] but lacks an overarching institutional strategy that mainstreams the innovation. The country should choose best practices to emulate from the rest of the world,select industries that are best positioned to benefit from AI,and take a highly targeted,multistage approach to its implementation.

Anosh Pardiwalla,Head of Indonesia,Oliver Wyman expressed: "As a key market for Oliver Wyman in Southeast Asia,we will continue to place big bets on vital areas,and help empower businesses and policymakers in Indonesia during their transformative moments. 2025 will see us further strengthen our commitment to the Indonesian market,not only in the clients we support but also our presence on the ground and the talent we take on."

The report was launched at Oliver Wyman's "Unlocking The Age Of Golden Indonesia Summit" on November 20. The summit saw guest speakers from Indonesia's Coordinating Ministry for Maritime and Investment Affairs,Pertamina,BNI Ventures,and Google Cloud Indonesia.

[1] Bank Indonesia (accessed August 2024) Indonesian Economic and Financial Statistics (SEKI)

[2] The Jakarta Post (October 24,2024) Investors eye Indonesia for AI amid low energy costs,favorable policies

About Oliver Wyman

Oliver Wyman,a business of Marsh McLennan (NYSE: MMC),is a management consulting firm combining deep industry knowledge with specialized expertise to help clients optimize their business,improve operations and accelerate performance. Marsh McLennan is a global leader in risk,strategy and people,advising clients in 130 countries across four businesses: Marsh,Guy Carpenter,Mercer and Oliver Wyman. With annual revenue of $23 billion and more than 85,000 colleagues,Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information,visit oliverwyman.com,or follow on LinkedIn and X.