Speaking in Jakarta today Mr Smith said: “Indonesia’s economy has proven to be resilient during the global downturn because of the Government’s management of the economy, its large domestic market and its relatively low dependence on external trade.
“Economic growth in Indonesia is expected to reach approximately 5.6% in 2010. We are optimistic about the economy’s prospects which are supported by the Government’s commitment to infrastructure development and to continued economic reform.
“There is no question that Indonesia stands out as a key part of the Asian growth story. We expect urbanisation will see more than 50 million people move to cities in Indonesia over the next 20 years, second only in size to China’s urbanisation.
“At the same time, Australia and Indonesia are increasingly close economic partners. The trade flow between the two countries totalled US$8.7 billion in 2008, up almost 10% on 2007 and we expect Australia’s trade in resources, agriculture and infrastructure will continue growing to support Indonesia’s economic development. The education linkages are equally strong with about 18,000 Indonesian students studying in Australia in 2009.
“Indonesia’s own strengths in natural resources and agriculture mean it’s also well placed to benefit from Asia’s continued growth which we expect will be around 7% in 2010, excluding Japan.
“Given this, Indonesia will be one of ANZ’s most important markets as part of our objective to become a super regional bank. Our operations here date back almost 40 years and we are a major investor in Indonesia including our interest of approximately 39% in PT Panin Bank.
“We are on track to complete the acquisition of the RBS retail and commercial businesses in Indonesia in June 2010, subject to regulatory approval. This is a unique opportunity for ANZ to expand and strengthen our presence in Indonesia giving us one of the largest networks of branches and ATMs among the foreign banks.
“The RBS acquisition and our own organic growth plans will see us invest up to US$100 million in capital in Indonesia this year and expand our presence to a total to 28 branches across 11 cities and almost 1,000 full time employees,” Mr Smith said.