Obbligazione Indonesia 7.25% ( USY20721AB57 ) in USD

Emittente Indonesia
Prezzo di mercato 100 USD  ▼ 
Paese  Indonesia
Codice isin  USY20721AB57 ( in USD )
Tasso d'interesse 7.25% per anno ( pagato 2 volte l'anno)
Scadenza 20/04/2015 - Obbligazione č scaduto



Prospetto opuscolo dell'obbligazione Indonesia USY20721AB57 in USD 7.25%, scaduta


Importo minimo 100 000 USD
Importo totale 1 000 000 000 USD
Cusip Y20721AB5
Descrizione dettagliata L'Indonesia č un arcipelago del sud-est asiatico composto da oltre 17.000 isole, con una ricca biodiversitā e una popolazione multietnica e multireligiosa.

The Obbligazione issued by Indonesia ( Indonesia ) , in USD, with the ISIN code USY20721AB57, pays a coupon of 7.25% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 20/04/2015







OFFERING MEMORANDUM
Republic of Indonesia
US$1,000,000,000
7.25% Bonds due 2015
Offer Price: 99.127%
plus accrued interest, if any
The Republic of Indonesia (the ``Republic'' or ``Indonesia'') is offering US$1,000,000,000 aggregate principal
amount of 7.25% Bonds due 2015 (the ``Bonds''). Interest on the Bonds will be payable semi-annually in arrears on
April 20 and October 20 of each year, commencing on October 20, 2005. The Bonds will mature on April 20, 2015. The
Bonds will not be redeemable, in whole or in part, prior to maturity.
The Bonds will constitute direct, unconditional, unsecured and general obligations of the Republic without
preference granted by the Republic to one above the other. The Bonds will rank equal in right of payment among
themselves and with all other unsecured and unsubordinated External Indebtedness (as defined herein) of the Republic.
All amounts payable under the Bonds will be backed by the full faith and credit of the Republic.
The Republic has applied to list the Bonds on the Luxembourg Stock Exchange. Currently, there is no public
market for the Bonds.
The Bonds have not been registered under the United States Securities Act of 1933, as amended (the ``U.S.
Securities Act''), or any state securities laws. The Bonds may not be offered or sold within the United States except to
qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A, and to certain
persons outside the United States in offshore transactions in reliance on Regulation S. Prospective investors are hereby
notified that sellers of the Bonds may be relying on the exemption from the provisions of Section 5 of the U.S. Securities
Act provided by Rule 144A. For a description of these and certain further restrictions on transfer of the Bonds, see ``Plan
of Distribution'' and ``Transfer Restrictions.''
The Bonds will be represented by one or more global certificates in fully registered form, without coupons, which
will be registered in the name of a nominee of The Depository Trust Company, as depository (``DTC''). It is expected
that delivery of the Bonds will be made against payment on or about April 20, 2005 through the book-entry facilities of
DTC.
Beneficial interests in the Bonds will be shown on, and transfers thereof will be effected only through, records
maintained by DTC and its direct or indirect participants, including Euroclear Bank S.A./N.V. (``Euroclear'') and
Clearstream Banking, socie´te´ anonyme, Luxembourg (``Clearstream''). Except as described herein, definitive Bonds will
not be issued in exchange for beneficial interests in global certificates.
Joint Bookrunners and Joint Lead Managers
CITIGROUP
DEUTSCHE BANK SECURITIES
UBS INVESTMENT BANK
Co-managers
Credit Suisse First Boston
PT Danareksa Sekuritas
PT Mandiri Sekuritas
The date of this offering memorandum is April 13, 2005.


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Source:


TABLE OF CONTENTS
Page
Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
Data Dissemination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
Enforcement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iv
Certain Defined Terms and Conventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
v
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Use of Proceeds
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Republic of Indonesia
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Land and People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Foreign Relations and International and Regional Organizations . . . . . . . . . . . . . . . . . . . . . . . . .
21
Economy and Gross Domestic Product
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Principal Sectors of the Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Labor and Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
Infrastructure Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
Gross Savings and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Foreign Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
Foreign Trade and Balance of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
Financial System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59
Monetary Policy
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71
Government Budget
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
Public Debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
Foreign Exchange and Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91
Description of the Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
106
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
110
Transfer Restrictions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113
Legal Matters
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118
i


The Republic accepts responsibility for the information contained in this offering memorandum. To
the best of the knowledge and belief of the Republic (which has taken all reasonable care to ensure that such
is the case), the information contained in this offering memorandum is in accordance with the facts and does
not omit anything likely to affect the import of such information.
The Luxembourg Stock Exchange takes no responsibility for the contents of this offering
memorandum, makes no representation as to their accuracy or completeness and expressly disclaims any
liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the
contents of this offering memorandum.
Offers and sales of the Bonds are subject to restrictions in certain jurisdictions, details of which are set
out in ``Plan of Distribution'' below. The distribution of this offering memorandum and the offering of the
Bonds in certain other jurisdictions may also be restricted by law.
No person is authorized in connection with any offering made hereby to give any information or to
make any representation other than as contained in this offering memorandum, and if given or made, such
information or representation must not be relied upon as having been authorized by the Republic or any
Initial Purchaser. This offering memorandum does not constitute an offer to sell or a solicitation of an offer
to buy by any person in any jurisdiction in which it is unlawful for such person to make such an offering or
solicitation. Neither the delivery of this offering memorandum nor any sale made hereunder shall under any
circumstances imply that the information herein is correct as of any date subsequent to the date hereof.
CERTAIN
PERSONS
PARTICIPATING
IN
THIS
OFFERING
MAY
ENGAGE
IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF
THE
BONDS.
SPECIFICALLY,
THE
INITIAL
PURCHASERS
MAY
OVER-ALLOT
IN
CONNECTION WITH THE OFFERING, AND MAY BID FOR, AND PURCHASE, THE BONDS
IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE ``PLAN OF
DISTRIBUTION.''
ii


EXCHANGE RATES
Unless otherwise indicated, all references in this offering memorandum to ``rupiah'' or ``Rp'' are to the
currency of Indonesia, those to ``dollars,'' ``U.S. dollars,'' ``US$,'' or ``$'' are to the currency of the United
States of America, those to ``SDR'' are to Special Drawing Rights of the International Monetary Fund (the
``IMF'' or the ``Fund'') and those to ``ID'' are to Islamic Dinars of the Islamic Development Bank (the
``IDB''). The middle exchange rate, the mid-point between the buy and sell rate, between the rupiah and the
U.S. dollar (the ``Middle Exchange Rate''), as announced by Bank Indonesia, the Indonesian central bank,
for April 13, 2005 was Rp9,488 = $1.00. See ``Republic of Indonesia -- Foreign Exchange and Reserves''
for further information regarding the exchange rate system in Indonesia. All exchange rates used in this
offering memorandum are the Bank Indonesia rates set forth below unless otherwise indicated.
The following table sets forth the Middle Exchange Rate for the last day of, and the average for, the
periods indicated.
Middle Exchange Rates of Rupiah per U.S. Dollar
Year
Period End
Period Average(1)
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,595
8,422
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,400
10,241
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,940
9,310
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,465
8,572
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,290
8,985
Source:
Bank Indonesia.
(1)
The average of the Middle Exchange Rates on the last day of each month during the applicable period.
FORWARD LOOKING STATEMENTS
This offering memorandum includes forward-looking statements. All statements other than statements
of historical facts included in this offering memorandum regarding, among other things, Indonesia's
economy, fiscal condition, debt or prospects may constitute forward-looking statements. Forward-looking
statements generally can be identified by the use of forward-looking terminology such as ``may,'' ``will,''
``expect,'' ``intend,'' ``estimate,'' ``anticipate,'' ``believe,'' ``continue'' or similar terminology. Although
Indonesia believes that the expectations reflected in its forward-looking statements are reasonable at this
time, there can be no assurance that these expectations will prove to be correct.
DATA DISSEMINATION
Indonesia subscribes to the International Monetary Fund's Special Data Dissemination Standard,
which is designed to improve the timeliness and quality of information of subscribing member countries.
This standard requires subscribing member countries to provide schedules indicating, in advance, the date
on which data will be released or the so-called ``Advance Release Calendar.'' For Indonesia, precise dates or
``no-later-than-dates'' for the release of data are disseminated three months in advance through the Advance
Release Calendar, which is published on the Internet under the International Monetary Fund's
Dissemination
Standards
Bulletin
Board.
Summary
methodologies
of
all
metadata
to
enhance
transparency of statistical compilation are also provided on the Internet under the International Monetary
Fund's Dissemination Standards Bulletin Board. The Internet website for Indonesia's ``Advance Release
Calendar'' and metadata is located at ``http://dsbb.imf.org/Applications/web/sddscountrycategorylist/
?strcode=IDN.''
iii


ENFORCEMENT
The Republic is a sovereign nation. Consequently, it may be difficult for holders of the Bonds to
obtain or enforce judgments against the Republic. The Republic has irrevocably waived in the Indenture, to
the fullest extent permitted by law, any immunity, including foreign sovereign immunity, from jurisdiction
to which it might otherwise be entitled in any action arising out of or based on the Bonds or the Indenture,
which may be instituted by the Trustee or a holder of any Bonds in any federal court in the Southern District
of New York, any state court in the Borough of Manhattan, The City of New York, or in any competent
court in Indonesia.
The Republic's waiver of immunity is a limited and specific waiver for the purposes of the Bonds and
the Indenture and under no circumstances should it be interpreted as a general waiver by the Republic or a
waiver with respect to proceedings unrelated to the Bonds or the Indenture. Furthermore, the Republic
specifically does not waive any immunity in respect of:
.
actions brought against the Republic arising out of or based upon U.S. federal or state securities
laws;
.
attachment under Indonesian law;
.
present or future ``premises of the mission'' as defined in the Vienna Convention on Diplomatic
Relations signed in 1961;
.
consular premises'' as defined in the Vienna Convention on Consular Relations signed in 1963;
.
any other property or assets used solely or mainly for governmental or public purposes in the
Republic or elsewhere; and
.
military property or military assets or property or assets of the Republic related thereto.
Because the Republic has not submitted to jurisdiction or waived its sovereign immunity in connection
with any action arising out of or based on United States federal or state securities laws, it will not be
possible to obtain a judgment in the United States against the Republic based on such laws unless a court
were to determine that the Republic is not entitled to sovereign immunity under the Foreign Sovereign
Immunities Act of 1976 with respect to such actions. The Republic may assert immunity to such actions or
with respect to the property or assets described above. Investors may have difficulty making any claims
based upon such securities laws or enforcing judgments against the property or assets described above.
The Republic has appointed the Representative Office of Bank Indonesia in The City of New York as
its authorized agent upon whom process may be served in any action arising out of or based on any bonds
issued under the Indenture, including the Bonds, or the Indenture. Such appointment is irrevocable until all
amounts in respect of the principal and interest, due or to become due on or in respect of all the bonds
issuable under the Indenture, including the Bonds, have been paid by the Republic to the Trustee or unless
and until a successor has been appointed as the Republic's authorized agent and such successor has accepted
such appointment. The Republic has agreed that it will at all times maintain an authorized agent to receive
such service, as provided above. The Representative Office of Bank Indonesia is not the agent for receipt of
service of process for actions under the United States federal or state securities laws.
The Republic is subject to suit in competent courts in Indonesia. However, the ``Law on State
Treasury'' (Law No. 1 of 2004) prohibits the seizure or attachment of property or assets owned by the
Republic. Furthermore, a judgment of a non-Indonesian court will not be enforceable by the courts of
Indonesia, although such a judgment may be admissible as evidence in a proceeding on the underlying claim
in an Indonesian court. Re-examination of the underlying claim de novo would be required before the
Indonesian court.
iv


CERTAIN DEFINED TERMS AND CONVENTIONS
All references in this offering memorandum to (i) ``Indonesia'' or the ``Republic'' are to the Republic
of Indonesia and (ii) the ``government,'' unless indicated otherwise, are to the government of Indonesia.
Unless otherwise indicated, all references in this offering memorandum to (i) ``tons'' are to metric
tons, each of which is equal to 1,000 kilograms or approximately 2,204.6 pounds, (ii) ``barrels'' are to U.S.
barrels, each of which is equal to 159.0 liters, (iii) ``LNG'' are to liquefied natural gas and (iv) ``LPG'' are to
liquefied petroleum gas. Measures of distance referred to herein are stated in kilometers, each of which is
equal to 1,000 meters or approximately 0.62 miles. Measures of area referred to herein are stated in square
kilometers (``km2''), each of which is equal to approximately 0.39 square miles, or in hectares, each of
which is equal to approximately 2.47 acres.
The Indonesian government's fiscal year commences on January 1 of each year and ends on December
31 of the same year and the Republic has used a calendar year for its fiscal year since 2001. Previously, the
Indonesian government's fiscal year commenced on April 1 of each year and ended on March 31 of the
following year; the last year to follow that convention was the one beginning April 1, 1999 and ending
March 31, 2000. In making the transition to the new convention, one year, referred to in this offering
memorandum as fiscal year 2000 or FY2000, began on April 1, 2000 and ended December 31, 2000.
References in this offering memorandum are to calendar years unless otherwise indicated.
Statistical information included in this offering memorandum is the latest official data publicly
available at the date of this offering memorandum. Financial data provided in this offering memorandum
may be subsequently revised in accordance with Indonesia's ongoing maintenance of its economic data, and
such revised data will not be distributed by Indonesia to any holder of the Bonds.
In 2004, the Republic's central bureau of statistics, Badan Pusat Statistik (``BPS''), adopted the
calendar year 2000 as the new base year (the ``2000 Base Year'') for the calculation of Indonesia's Gross
Domestic Product (``GDP'') in both current and constant market prices. Prior to the adoption of the 2000
Base Year, the base year used to calculate the GDP based on current and constant market prices in recent
years was the calendar year 1993 (the ``1993 Base Year''). During the period of 1993 to 2000, significant
structural changes occurred in the Indonesian economy as the manufacturing and services sector of the
economy increased in relative importance (reflected in higher percentage shares of total GDP) and the
agricultural and oil and natural gas sectors decreased in relative importance (reflected in lower percentage
shares of total GDP) and the Asian financial crisis beginning in 1997 adversely affected the Indonesian
economy, principally the banking and financial sector. See ``Republic of Indonesia -- Economy and Gross
Domestic Product.'' BPS determined that the continued use of the 1993 Base Year in calculating Indonesia's
GDP would understate the size and growth of domestic output and, therefore, incorporated the structural
changes in the Indonesian economy into the composition of the 2000 Base Year data. The 2000 Base Year
also has wider and more accurate coverage than the 1993 Base Year. One result of the adoption of the 2000
Base Year is that economic growth for the Indonesian economy calculated using constant prices based on
the 2000 Base Year is higher than that calculated using constant prices based on the 1993 Base Year. For
2001, 2002 and 2003, the GDP growth rates using the 2000 Base Year were 3.8%, 4.4% and 4.9%, compared
to 3.5%, 3.7% and 4.1%, respectively, using the 1993 Base Year. All GDP data contained in this offering
memorandum are calculated using the 2000 Base Year. Except otherwise indicated, all GDP growth rates (in
aggregate or by sector) are based on constant market prices using the 2000 Base Year.
In May 2004, the Directorate General of Customs and Excise (``DGCE'') of the Ministry of Finance
changed the reporting system for exports from a manual reporting system, under which exports were
recorded by hand by DGCE officials, to a computerized reporting system in real time, under which DGCE
officials report exports directly to a central database. This change has resulted in more accurate and
complete reporting of exports and, therefore, an increase in the amount of reported exports. In February
2004, Bank Indonesia changed the classification system of exports from a classification system based upon
a harmonized system of reporting to a classification system based upon the International Standard Industrial
v


Classification system. As a result of this change by Bank Indonesia, the classification of certain export
products has changed. For instance, exports of certain processed agricultural products, such as processed
rubber products, were reclassified from exports of agricultural products to exports of manufactured
products. Therefore, changes in exports by sector from 2000 to 2004 have been revised by Bank Indonesia
(based upon data from the DGCE) from those figures previously published. Unless otherwise stated, all
export data (including export data for periods prior to 2004) presented in this offering memorandum are
calculated under the new classification system of Bank Indonesia. However, since implementation of the
new reporting and classification systems has not been fully completed as of the date of this offering
memorandum, the export figures contained in this offering memorandum may be subsequently revised. See
``Republic of Indonesia -- Foreign Trade and Balance of Payments.''
On March 10, 2005, the informal group of official sector foreign government lenders known as the
``Paris Club'' indicated that it would offer a temporary debt service moratorium to countries in South and
Southeast Asia affected by the earthquake and tsunami which occurred on December 26, 2004. See ``Recent
Developments -- December 2004 Earthquake and Tsunami'' and ``-- Temporary Debt Service Moratorium
Offer from the Paris Club.'' As of the date of this offering memorandum, the Republic has received offers
from some, but not all, of the individual Paris Club members setting forth the specific loans to which the
temporary debt service moratorium will apply and the concessional interest rates which will apply to
deferred payments. Although the Republic has not received formal offers from all of the Paris Club
members, the government intends to accept the general offer from the Paris Club members, as indicated in
the press release of the Paris Club issued on March 10, 2005 and in contacts with individual Paris Club
members. Accordingly, the government has proposed revisions to the its 2005 budget, which was originally
approved by the House in September 2004 (the ``2005 Budget'') to reflect its decision to accept the Paris
Club members' offers. See ``Recent Developments -- Proposed Revisions to the 2005 Budget.'' However,
formal acceptance by the Republic of the Paris Club members' offers will require approval from the House.
The public external debt figures, including anticipated public external debt servicing requirements until
2009, and ratios derived from those figures contained in this offering memorandum were prepared on the
assumption that the Republic will formally accept the Paris Club members' temporary debt service
moratorium offers and reflect assumed concessional interest rates on those deferred debt service payments.
See ``Republic of Indonesia -- Public Debt.''
Unless otherwise indicated, all statistical data and figures for 2004 and all GDP data for 2004 are
estimates based upon preliminary data and are subject to review and adjustment.
Any discrepancies in the tables included herein between the amounts listed and the totals thereof are
due to rounding.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER RSA 421-B WITH THE STATE OF NEW HAMPSHIRE NOR THE
FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE
STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT
ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING.
NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS
AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF
STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR
RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT
IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF
THIS PARAGRAPH.
vi


SUMMARY
The summary highlights selected information from this offering memorandum and may not contain all
of the information that may be important to you. You should read this offering memorandum in its entirety
before making a decision to invest in the Bonds.
Republic of Indonesia
Indonesia, the fourth most populous country in the world, is a developing nation in Southeast Asia,
spread across an archipelago of over 17,500 islands. The nation is undergoing rapid economic change as it
continues its recovery from the severe economic shocks it suffered during the Asian financial crisis that
began in mid-1997. The Republic is simultaneously undergoing fundamental political changes as it
transforms itself from a centralized authoritarian system to a participatory democracy that places greater
political power in the hands of local and regional governments.
The following table sets forth certain of the Republic's principal economic indicators for the specified
periods. Growth in GDP and inflation (measured in changes in the consumer price index (``CPI'')) is
indicated on a year-on-year basis.
Selected Key Economic Indicators
2000
2001
2002
2003
2004P
National account and prices:
Real GDP growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.9%
3.8%
4.4%
4.9%
5.1%
Per capita GDP (in thousands of rupiah). . . . . . . . . . . . . .
6,752
8,081
8,828
9,572
10,642
Per capita GDP (in U.S. dollars)(1) . . . . . . . . . . . . . . . . .
804
789
943
1,116
1,182
Average exchange rate (Rp/$) . . . . . . . . . . . . . . . . . . . . .
8,422
10,241
9,310
8,572
8,985
Inflation rate (change in CPI) . . . . . . . . . . . . . . . . . . . . .
9.4%
12.6%
10.0%
5.1%
6.4%
External sector:
Current account (% of GDP). . . . . . . . . . . . . . . . . . . . . .
4.8%
4.2%
3.9%
3.4%
1.1%
Fiscal account:
Budget surplus/(deficit) (% of GDP) . . . . . . . . . . . . . . . .
(1.1)%
(2.4)%
(1.3)%
(1.7)%
(1.1)%
External debt of the central government
(in trillions of rupiah)(2) . . . . . . . . . . . . . . . . . . . . . . .
519
596
596
588
617
Debt service ratio (% of government revenue). . . . . . . . . .
28.1%
34.3%
34.8%
26.8%
32.7%
Source: BPS, Bank Indonesia and Ministry of Finance
P
Preliminary.
(1)
Per capita GDP in U.S. dollars has been converted from rupiah into U.S. dollars at the following exchange rates: Rp8,393.7 per
U.S. dollar for 2000, Rp10,237.7 per U.S. dollar for 2001, Rp9,366.6 per U.S. dollar for 2002, Rp8,580.0 per U.S. dollar for
2003 and Rp9,006.0 per U.S. dollar for 2004.
(2)
The U.S. dollar amount of outstanding external debt of the central government for each year has been converted into rupiah at
the exchange rates used by BPS for calculation of GDP into U.S. dollars as described in footnote (1) above.
Economic developments include modest economic growth (averaging approximately 4.8% real GDP
growth from 2002 through 2004); a relatively stable exchange rate (averaging 9,310, 8,572 and 8,985 rupiah
to the U.S. dollar in 2002, 2003 and 2004, respectively); consistent current account surpluses (3.9%, 3.4%
and 1.1% in 2002, 2003 and 2004, respectively); and moderate levels of inflation (increases in the CPI of
10.0%, 5.1% and 6.4% in 2002, 2003 and 2004, respectively).
Prior to the Asian financial crisis, Indonesia had historically relied on foreign lending to finance its
fiscal deficit, including official development aid from foreign governments and loans from multilateral
lending organizations, such as the World Bank and the Asian Development Bank, and from the Paris Club.
Indonesia's budget policy at that time required that the budget deficit be financed by external aid and
foreign loans from official sources. With the onset of the Asian financial crisis in 1997, the government of
Indonesia received foreign loans from the IMF aimed to support the Republic's balance of payments as
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official foreign reserves declined and the rupiah weakened. Since the crisis, Indonesia has successfully
completed three rounds of rescheduling of its Paris Club debt, extending its maturity and reducing its
amount. As a result of Indonesia's decision to exit the IMF lending program in 2003, the country is no
longer able to conduct another Paris Club rescheduling, and the Republic's external debt service
requirements are expected to rise as a result. On March 10, 2005, in an effort to assist countries in South and
Southeast Asia affected by the earthquake and tsunami which occurred on December 26, 2004, the Paris
Club has indicated that it would offer Indonesia (as well as other countries affected by the tsunami) a
temporary debt moratorium for debt service payments through the end of 2005. Although the specific details
of the offers for a temporary debt service moratorium have not been received by the Republic from all of the
individual Paris Club members and formal acceptance of the offers by the Republic is dependent upon
approval by the House, the government intends to accept the Paris Club members' offers for a temporary
debt service moratorium. As a result, the Republic expects that its external debt servicing requirements in
2005 will be reduced and the government has accounted for those reduced debt service payments in its
proposed revisions to the 2005 Budget. See ``Recent Developments -- December 2004 Earthquake and
Tsunami,'' ``--Temporary Debt Service Moratorium Offer from the Paris Club'' and ``-- Proposed
Revisions to the 2005 Budget.'' Indonesia no longer relies exclusively on external borrowings. Beginning in
1998, the government has issued domestic debt as part of its program to recapitalize Indonesia's banks, and,
in 2002, the government began a program of regularly issuing rupiah-denominated bonds in the domestic
market. With the development of a regulatory framework and support from the government, a secondary
market for the government's domestic debt securities has developed.
At the same time that Indonesia experienced the Asian financial crisis, the country entered a period of
fundamental political change. In July and September 2004 Indonesia's voters went to the polls to participate
in the country's first direct presidential election. On October 20, 2004, President Susilo Bambang
Yudhoyono was inaugurated as the new President of the Republic and Vice President Muhammad Jusuf
Kalla was inaugurated as the new Vice President of the Republic. Before this period of political reform,
Indonesia had been under a centralized authoritarian regime under President Soeharto. Soeharto served as
president of the Republic from 1966 until 1998, when he resigned following widespread civil unrest. A
series of constitutional amendments adopted in the last few years has increased the level of direct
democracy, decreased the influence of the military in civil government, devolved power to regional and
local government authorities and improved transparency of the country's judicial system.
On December 26, 2004 and March 28, 2005, Indonesia experienced earthquakes off the northwest
coast of Sumatra. As a result of the December 2004 earthquake, a tsunami hit the coastal regions of
northwest Sumatra, primarily the provinces of Aceh and North Sumatra, and caused widespread damage,
destruction and death. The March 2005 earthquake primarily affected the Nias and Simeulue islands off the
northwest coast of Sumatra and also caused significant damage, destruction and death. The Indonesian
Disaster Relief and Refugees Coordination Agency estimates that at least 90,192 people were killed, 1,095
people are missing and 387,607 are refugees as a result of the December 2004 earthquake and tsunami and
676 people were killed and 36,830 people are refugees as a result of the March 2005 earthquake. The
government estimates the destruction of property in the tsunami-devastated regions of Indonesia at around
$2.9 billion. Foreign governments and international organizations and non-profit relief agencies have
pledged up to $1.7 billion in aid to support the long-term reconstruction and rehabilitation efforts of
Indonesia in Aceh and North Sumatra. The government estimates that the total aid and reconstruction costs
for the regions of Indonesia affected by the December 2004 earthquake and tsunami and the March 2005
earthquake will be up to Rp48.8 trillion, although the actual aid and reconstruction costs may be
significantly higher than this estimate. See ``Recent Developments -- December 2004 Earthquake and
Tsunami'' and ``-- March 2005 Earthquake.''
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