The Republic of Indonesia

1. The Republic of Indonesia July 2009 Maintaining Positive Growth with Japanese Partnership JBIC Guaranteed Shibosai – Investor Presentation

2. Disclaimer These presentation materials have been prepared by the Ministry of Finance, Indonesia, solely for the use at this presentation and have not been independently verified. This presentation is being communicated only to the Qualified Institutional Investors (meaning persons defined in Article 10 (1) of the Cabinet Office Ordinance concerning the Definitions under Article 2 of the FIEL (Ordinance of the Ministry of Finance No. 14 of 1993, as amended) as those having expert knowledge of and experience with investment in securities (each, a "QII")). This presentation is only directed at QIIs and any investment or investment activity to which the presentation relates is only available to QIIs or will be engaged in only with QIIs. Solicitations resulting from this presentation will only be responded to if the person concerned is a QII. Other persons should not rely or act upon this presentation or any of its contents. You agree to keep the contents of this presentation strictly confidential. This presentation material is highly confidential, is being presented solely for your information and may not be copied, reproduced or redistributed to any other person in any manner. Further, this presentation should not be distributed to U.S. persons except to (1) qualified institutional buyers in reliance on the exemption from the from the registration requirements of the Securities Act provided by Rule 144A and (2) to non-U.S. persons outside the United States as defined in Regulation S of the U.S. Securities Act of 1933, as amended. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. Neither the Republic nor any of its affiliates, advisers or representatives accepts any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither the Republic nor any of its affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. In addition, certain information and statements made in this presentation contain “forward-looking statements.” Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,” “estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project,” “trend,” and similar expressions. All forward-looking statements are the Republic’s current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. Caution should be taken with respect to such statements and you should not place undue reliance on any such forward-looking statements. Certain data in this presentation was obtained from various external data sources, and the Republic has not verified such data with independent sources. Accordingly, the Republic makes no representations as to the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares or other securities of the Republic and neither any part of this presentation nor any information or statement contained therein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase securities in any offering of securities of the Republic should be made solely on the basis of the information contained in the offering document which may be published or distributed in due course in connection with any offering of securities of the Republic, if any. By participating in this presentation, you agree to be bound by the foregoing limitations.

3. Summary Terms of the Offering

4. Macro-economic Update and the Response to the Global Credit Crisis Policy Response and Financial Sector Reform Budget Financing and Debt Management Conclusion OUTLINE

5. 1 Macro-economic Update and the Response to the Global Credit Crisis

6. Indonesia’s Economic Backdrop • Resilient economy driven by strong private consumption and positive GDP growth of 4.3% expected for 2009 • Q1’09 GDP grew by 4.4% y-o-y, led by household and government consumption • Substantial improvement in economic fundamentals • Falling inflation • Declining debt-to-GDP ratio • Strong balance of payments position • Pro-active and effective government policy response to stimulate real sector growth and stabilize the financial system • Bank Indonesia cut rates by 250 bps since November 2008, still leaving room for further cuts • US$7 billion Government stimulus package to stimulate real growth • Prudent debt management across diversified funding sources Indonesia’s Economic Fundamentals Remain Solid With Positive Growth Momentum

7. Japan and Indonesia – a Long Standing Partnership History of economic partnership through trade and investments, and close cooperation between Japanese and Indonesian governments Japan-Originated Gross FDI Financial and Economic Cooperation (US$bn) • Japan and Indonesia have established various channels of cooperation • Bilateral Swap Agreement (BSA) and local currency swap with Japan • Trading Financing with JBIC of up to US$500 million • JBIC-guaranteed Samurai issuance of up to US$1.5 billion • Budgetary support in the form of program and project loans • Economic Partnership Agreement with tariff reduction to promote trade and investment cooperation Indonesia – Japan Trading History (1) Trading Snapshot (1) • Japan in Indonesia’s single largest trading partner, accounting for 16% of Indonesia’s trade in 2008 (US$bn) 2003 – 2008 CAGR: 19% Source: BKPM. Ministry of Finance. 1. Total trading value includes exports and imports.

8. Japan and Indonesia –Trading Overview Japan is a major trading partner with Indonesia, particularly in oil & gas and heavy machinery Indonesia’s Export to Japan (US$bn) 2008 % of Total 50.3% 16.5% 13.4% 8.3% 3.1% 2.3% 6.0% Indonesia’s Import from Japan (US$bn) (1) 2008 % of Total 28.0% 20.9% 14.7% 9.1% 27.2% Source: BPS. Includes other commodities including agriculture produce, metals and textile.

9. Indonesia GDP Growth – Weathering The Crisis Sustained positive GDP growth despite recent crisis driven by government fiscal policy, consumption and investment Indonesia GDP Growth Overview (1) Pre Crisis (1994 – 1996) (2) Crisis Period (1997 - 1999) (2) Post Crisis (2000 – 2007) (2) Q1’08 – Q1’09 (2) Source: Ministry of Finance. • GDP growth rates on constant pricing basis. 1994 - 1999 GDP based on 1993 pricing level. 2000 GDP and thereafter based on 2000 pricing level. • Reflects average y-o-y growth rates.

10. Growth Driven by Non-oil & Gas Sectors Broad based drivers of growth highlighted by strengths in Agriculture and Telecoms Economic Growth by Major Sectors Sector as a % of GDP(1) 26.8% 17.4% 13.7% 9.5% 9.3% 8.3% 7.4% 6.3% • Sustained double digit growth in transport and communications supported by infrastructure development and household consumption • Agriculture and services account for 23.0% of GDP and maintaining positive growth trends Source: Ministry of Finance • Sector composition of GDP (at constant market prices) for 2008.

11. Indonesia is Growing Strongly Compared with Other Emerging Markets and Asian Economies Only Indonesia, China and India maintain positive growth through the economic crisis Indonesia’s Economic Growth vs. BRIC and Southeast Asian Economies y-o-y growth rate (%) Q1’08 Q2’08 Q3’08 Q4’08 Q1’09 Source: Bloomberg.

12. Indonesia’s Macroeconomic Environment Remains Stable Positive economic fundamentals with further room for monetary policy easing Headline inflation Trending Down from Peak BI still have Room to Lower the Policy Rate Source: Bank Indonesia. Source: Bloomberg. Improved Climate Investment Declining Debt-to-GDP Ratio • Government Investment Policies initiatives • Equal legal status for domestic and foreign investors • Investors’ protection against nationalization • New tax incentives to promote investment in pioneer industries • Investment has shown strong resilience amidst the global crisis • 12.6% investment growth in 2008, led by foreign direct investment, the majority of which flowed into the transportation and telecommunication sectors • Between 1980 and 2008, FDI-to-GDP ratio increased from 0.2% to 1.3% Source: Bank Indonesia. Source: Ministry of Finance, Debt Management Office.

13. Healthy BOP Position and Strengthening Rupiah Current account surplus and positive trade balance with strengthening rupiah and strong recovery in stock markets Balance of Payments – Sharp Recovery in Q1’09 Stable Rupiah Exchange Rate And Stock Market Recovery (US$bn) Rp/US$ Foreign Reserves Remain Healthy (US$bn) (1) 2005 2006 2007 2008 2009 Source: Ministry of Finance, Bank Indonesia. 1. As of 12 June 2009. Source:.Bloomberg as of 26 June 2009.

14. Capital Inflow to Indonesia Has Recovered Positive net foreign buying of Indonesian securities driving outperformance in stock markets and stability in exchange rate Stock Indices & Exchange Rates Stock Net Foreign Buying 2009 (Rp billion) YTD Performance as of 26 June 2009 Bond Net Foreign Buying 2009 (Rp billion) % appreciation against USD % change in stock index Source: Bloomberg, as of 26 June 2009.

15. Outperformance of ROI US$ Credits ROI global bonds are now outperforming EM credits ROI US$ Cash Bonds vs. Overall Emerging Markets ROI CDS vs. Other Asian Sovereign CDS ROI Cash Spreads vs. Overall Emerging Markets (1) Source: Bloomberg, CMA. As of 23 June 2009. 1. Spreads over US Treasury yields.

16. Credit Growth Stays Strong Despite the Global Crisis Credit growth and loan deposits have fallen prudently to stabilize banks and NPLs at historical lows Rapid Bank Credit Growth Despite Global Liquidity Crunch Loan-to-Deposit Ratio has Fallen as Banks Deleverage (US$ bn) Capital Adequacy Ratio is Improving Non-Performing Loans at Historical Low Levels Period Average Source: Bank Indonesia

17. Indonesia’s Competitiveness Significant improvement in the global competitive scorecard Competitiveness Scorecard - 2009 Ranking Improvement – 2008 / 2009 Southeast Asia BRIC G3 • Indonesia had the greatest improvement in competitiveness rankings out of all 57 countries surveyed • Competitiveness ranking improved 9 places from 51 to 42 • Indonesia ranks ahead of the Philippines and Russia in World Competitiveness • Also ranks ahead of developed European economies including Italy and Greece • In the “stress test” rankings, an indicator of resilience to the global economic crisis, Indonesia is highly placed ranking 33 out of 57 countries • Indonesia is particularly highly ranked for socio-political stability IMD World Competitiveness Center (20 May 2009) “The most spectacular movements are seen for Indonesia, rising from 51st place to 42nd” Source: IMD World Competitiveness Center.

18. Resilience Acknowledged by Three International Ratings Agencies Moody’ recently raised Indonesia’ outlook to positive based on effective government policy and strong economic fundamentals Moody’s (Ba3 Positive) S&P(BB- Stable) Fitch(BB Stable) 2009 Ba3 BB- BB Ba3 BB- BB- BB 2008 B1 Ba3 BB- BB- 2007 Moody’s – 11 June 2009 “The change in outlook to positive in June 2009 was prompted by Indonesia’s stronger growth prospects relative to ratings peers and by its increasingly effective macro-economic policy framework. These credit strengths are underpinned by a balanced economy, strong domestic demand, and well functioning policy institutions…” ` Fitch – 20 Jan 2009 • “... Indonesia's conservative public finances, fiscal restructuring efforts and increased surveillance of fiscal variances to minimize negative fiscal ….Fitch anticipates a peaceful and non-disruptive conclusion to the election season, similar to the 2004 general elections.” S&P – 7 Nov 2008 "The stable outlook reflects Standard & Poor's view that debt reduction in recent years and an improved policy environment, particularly the flexible exchange rate regime, will enable the government to sustain an adequate external liquidity cushion in the face of ongoing negative external shocks...“ Source: Moody’s, S&P, Fitch.

19. Policy Response and Financial Sector Reform 2

20. Crisis Control in the Financial Markets Proactive government policies to improve liquidity through stabilizing the financial sector and ensuring exchange rate stability Improving Liquidity Through Stabilizing Financial Sector • Laws on Financial System Safety Nets(JPSK) and establish Financial System Stability Commitee (FSSC) • Increase the amount of deposits guaranteed by the government in the banking system • Strengthen the government’s supervisory and enforcement capacity over capital markets • Place government funds with state-owned banks to increase liquidity in the banking system • Manage state-owned enterprises’ foreign exchange transactions to reduce speculation Ensuring Foreign Exchange Stability • Promote trade financing with the establishment of various bilateral and multilateral agreements • Preventing of illegal imports • Requiring greater disclosure on large-sized purchases of foreign currency against IDR to curb speculative pressure on IDR • Currency stabilizationto reduce level of volatility in foreign exchange • International cooperation on currency swaps(ASEAN +3; BSA-Japan; BCSA-China; Yen-Rp swaps)

21. Fiscal Stimulus for 2009 to Stimulate Real Growth Support from infrastructure and national programs, such as: Expansion of government programs to alleviate poverty Expansion of credit program (KUR) to accelerate the development of the primary sectors Additional infrastructure projects for job creation activities 1 2 3 Targeted and effective US$7 billion fiscal stimulus plan to stimulate the real economy and maintain positive growth momentum Accelerate job creation and foster small scale businesses Boosting the society’s purchasing power • Reduce individual income tax • Acceleration of National and Regional budget disbursement • Subsidies on medicine, and cooking oil • Direct subsidies (cash transfer and conditional cash transfer) for low-income households • Provides more direct and indirect subsidies to education and health sector Stimulate trade and promote entrepreneurships • Import duty facility on selected capital goods and materials and reduction in import tax for capital goods • Export financing and guarantee (JBIC, ADB, IFC, etc.) • Tax rate reduction on corporate income, individual income and increase minimum threshold for employee tax • Discount on electricity peak-hour charge for industries and reduction on diesel fuel price • Tax subsidy for oil & gas industry

22. Coordinated Monetary and Fiscal Policy Response to Global Crisis Monetary and fiscal policy has been moderate compared to other countries with room for further policy action if needed Policy Rate Cuts since November 2008 Cost of Fiscal Stimulus Program (bps) (% of GDP) Southeast Asia Southeast Asia Indonesia Indonesia Malaysia Malaysia Philippines Philippines Thailand Thailand BRIC BRIC Brazil Brazil China China India India Russia Russia Japan Japan G3 G3 UK UK US US Source: Bank Indonesia, Bloomberg, as of 23 June 2009.

23. Budget Financing and Debt Management 3

24. 2009 Budget Outlook with Safety Net and Crisis Prevention Mechanism The 2009 budget is designed to give the Government enough room to adjust to any potential impact of the global financial crisis Manageable budget deficit of US$12.6 billion or 2.5% of GDP 2009 Budget Outlook (in US$) Includes reserves for oil price fluctuation and infrastructure land acquisition. Minimal impact on budget deficit from oil price movement A US$1 change in the oil price affects budget deficit by only US$10 million Source: Ministry of Finance

25. 2009 Funding Plan 2009 budget requires US$23 billion of total funding of which US$14 billion has already been secured through government securities issued and 2008 surplus, while US$5 billion will be secured through program and project loan Budget Deficit Financing (in US$) Commentary • 2009 budget deficit is US$12.6 billion (2.5% GDP) • Total funding required is US$23.4billion including amortizing or maturing debt • Funded by • Accumulated 2008 budget surplus of US$4.8 billion • New government debt of US$18.5 billion of which US$13.9 billion in government bonds and other securities • Contingency facilities available from World Bank, ADB and other bilateral G2G agreements (Japan and Australia) • US$9.0 billion of government securities has been already raised, leaving additional requirement of US$4.9 billion Government Security Issuance (1) Estimates based on new set of assumptions plus additional fiscal stimulus measures Include Contigency Fund facilities from Bilateral and Multilateral source. Includes net investments in SOEs. Assumption 1USD = 10,600 for 2009 Budget Outlook. As of 24 June 2009.

26. Government Debt Composition Balanced debt profile with approx. half IDR denominated and 20% in JPY Government Debt Composition Central Government Debt Snapshot – March 2009 By Interest Rate By Currency By Maturity Source: Ministry of Finance.

27. Maturity Profile of Tradable Government Securities Maturity profile has been improving over time towards a more balanced structure. External bonds are longer dated, with the shortest ones coming due in 2014 Tradable Government Securities – Maturity Profile (As of 25 May 2009) Source: Ministry of Finance Note: Period end of average middle exchange rates used

28. Holders of Tradable Government Securities There is an increasing proportion of foreign and non-bank holders of Indonesian Government securities Holders of Tradable Domestic Gov’t Securities Foreign Holdings by Maturity, 17 June 2009 (US$ billion) Development in Domestic Market • Yearly issuance schedule publicly available • Established primary dealership infrastructure • Benchmark series • Active communication with market participants • Variety of domestic securities available • T-Bills, fixed rate, floating rate, variable rate, zero coupon, retail bonds and Sukuk Source: Ministry of Finance. As of June 17th 2009. Assume exchange rate of Rp 10,250 / US$.

29. Conclusion Indonesia has demonstrated resilience against the global economic crisis and strong growth prospects have prompted positive ratings outlook by Moody’s 4.3% growth projected for 2009 and manageable budget deficit of 2.5% of GDP Total 2009 funding requirements from government securities of US$13.9 billion, of which US$9.0 billion has been secured. Additional US$4.9 billion to be raised from JBIC Shibosai and Rupiah bonds Pro-active and effective policy response to support the banking system and capital markets; ensure foreign exchange stability and promote real growth through fiscal stimulus Room for further monetary and fiscal policy measure if required Realistic and achievable funding strategy from diversified sources Additional support from the World Bank, ADB, and bilateral arrangements with Japan and Australia if required Effective government policy and prudent debt management safeguarding Indonesia against the global economic crisis