Indonesia Emerging as Attractive Destination for Foreign Investors

Jakarta (Antara Bali) - The Indonesian governments efforts to introduce a series of economic policy packages since September last year and intensive investment promotions abroad have increased foreign investors interest and made Indonesia the second-best investment destination.

"This January, Indonesia emerged as the second most preferred investment destination after China," Oikos Mando Panjaitan, manager of the Department of Communications of Bank of Indonesia, stated on Monday.

Indonesia has, since last September, launched 12 tranches of its economic policy package aimed at streamlining investment licensing procedures, creating ease of doing business, and attracting more foreign investment into Indonesia.

Besides this, the Capital Investment Coordinating Board (BKPM) has also been conducting intensive investment promotions in various countries in Asia, Europe, America, and Australia.

Last month, President Joko Widodo (Jokowi) undertook a tour of several European countries, which comprised the Netherlands, Britain, Germany, and Belgium, to increase investment and strengthen trade ties.

President Jokowi, following his European tour, noted that his official visits had resulted in the inking of several business-to-business agreements, worth US$20.5 billion.

"I have achieved two milestones during these visits. The first is the trust that all businessmen in the European countries have laid on Indonesia and the faith and confidence reposed by the European Union in the nations economy," Jokowi affirmed during a press conference after a tour of Europe at the Halim Perdanakusuma Airport on Saturday (April 23).

The president pointed out that the second milestone achieved was the trust that European countries had expressed in the role Indonesia had played in establishing peace through the advocacy of moderate Islam.

According to BKPM Head Franky Sibarani, Europes investment potential was quite huge, but Indonesia had yet to optimally benefit from it. However, there has been an increasing trend in investment from Europe in Indonesia.

Based on the BKPM data, the investment commitments from European countries in January 2016 reached Rp6.53 trillion, almost 10 times higher than Rp670 billion recorded in the same period in the previous year.

The realization of investment from Europe reached Rp149.8 trillion during the period between 2010 and 2015, he remarked, hoping that the presidents visit will boost European investment in Indonesia.

The increase in investment commitments from Europe continued to show a positive trend in 2015, with an increase of 16 percent to reach Rp37.3 trillion, compared to Rp32.2 trillion in 2014.

The Netherlands, with a total investment worth of Rp70 trillion, is ranked seventh among the list of countries investing in Indonesia; Britain, with Rp31 trillion, came tenth; Germany, with Rp5.2 trillion, stood 17th; and Belgium, with Rp1.6 trillion, ranked 27th, he revealed.

The BKPM is also planning to hold investment marketing promotional campaigns in New Zealand and Australia as part of its efforts to boost investment inflows from the two countries.

During the event, BKPM Chief Sibarani will act as the keynote speaker at the business forums to be held in Auckland, New Zealand, and Melbourne and Sydney, Australia, the BKPM noted in a press statement on Wednesday (May 4).

"With these activities, investors, who have expressed an investment interest through BKPMs representative offices and the Indonesian embassies (in the countries), will hopefully realize it soon," he affirmed.

New Zealand and Australia are among Indonesias neighboring nations that have the capacity to invest in the country, he pointed out.

While intensive efforts are being made overseas, Vice President Jusuf Kalla also hoped that the countrys investment potential will also be readied. Therefore, he has called on all regional governments to manage and issue sound policies, so their respective regions would become attractive destinations for foreign investors.

The entry of foreign investment into the regions will boost employment opportunities and increase production.

"Welfare can only be improved if employment and production can be enhanced and increased. This all can only be achieved through capital investment and good technology. Therefore, regions must be attractive to investors," the vice president stated in Jakarta on Thursday (May 5).

The realization of investment in Indonesia in 2015 reached some Rp540 trillion, up 16.6 percent from that in 2014, surpassing the BKPMs target set at Rp519.5 trillion.

"This means that the investment level in 2015 is 16.6 percent higher than that in 2014," Sibarani noted earlier.

"For 2016, based on the five-yearly plan, the investment target is set at Rp595 trillion," Sibarani remarked.

The investment for 2016 is expected to boost the production sector and increase exports. Indonesias export performance, which until August 2015, had slumped 10.23 percent compared to that in 2014, should be boosted by attracting more foreign investment.

Therefore, the government has set a foreign investment target of Rp386.4 trillion in 2016, or some 53.9 percent of the total investment plan of Rp594.8 trillion in a bid to boost exports
(WDY)