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RI-US partnership in investment expected to gain momentum
US business leaders reaffirmed their commitment to helping Indonesia reach its economic goals, creating jobs, developing infrastructure and enabling new domestic enterprises, as the two countries have a long history in investment partnership, a gathering here has concluded
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S business leaders reaffirmed their commitment to helping Indonesia reach its economic goals, creating jobs, developing infrastructure and enabling new domestic enterprises, as the two countries have a long history in investment partnership, a gathering here has concluded.
Top business organizations and chambers of commerce from the US and Indonesia discussed on Wednesday policies and ideas to foster investment and long-term economic growth at the US-Indonesia Investment Summit in Jakarta.
Myron Brilliant, executive vice president and head of international affairs at the US Chamber of Commerce said US investors were eager to work with the new administration under President Joko 'Jokowi' Widodo, who had a positive momentum to boost economic growth and foreign investment during his tenure.
Brilliant said Jokowi had outlined his ambition for Indonesia to achieve 7 percent annual gross domestic product (GDP) growth by 2018, despite it slowing to 5.1 percent in the latest quarterly figures this year.
'Indonesia will need to attain more investment if it is to meet the target and achieve the new government's policy ambitions,' he said.
The summit was held by the American Chamber of Commerce in Indonesia (AmCham Indonesia) and the US Chamber of Commerce in collaboration with the Indonesian Chamber of Commerce and Industry (Kadin) and Indonesian Employers Association (Apindo).
During the meeting, Indonesia's finance minister, Bambang Bro-djonegoro, said the government was eager to prop up investments, which were expected to grow at least 10 percent next year to boost Indonesia's economic growth of around 5.5 to 5.8 percent.
According to Bambang, private investments and government spending should be the key drivers for economic growth due to the slower demand for exports and the possibility of higher inflation that would repress domestic consumption caused by the plan to scrap the fuel subsidy.
'We hope that the president's invitation for foreign investment during the Asia-Pacific Economic Cooperation [APEC] in Beijing will match US investors' expectations,' he said.
- US investors are eager to work with new Indonesian government amid positive momentum
- Indonesia expects to see investment growth of 10 percent next year with private investments and govt spending among key drivers
Meanwhile, Kadin chairman Suryo Bambang Sulisto said Kadin was expecting more US investments in the oil and gas sector as the country had expertise in exploration technology, which should be welcomed by the government through incentives and streamlined procedures.
'Investment in the oil and gas sector is expensive because it is very risky. For instance, an oil company needs to invest tens of millions of dollars for one-time offshore drilling. That is why incentives and public-private partnerships are needed,' he said.
Meanwhile, Apindo chairman Sofjan Wanandi said investments for labor-intensive industries were still needed as they created more jobs and would be significant for economic growth.
Sofjan echoed Suryo's opinion that the government should ease licensing procedures and boost investments in infrastructure to cut the high costs faced by investors, stating 'the supportive move by the government will also attract local businesspeople to invite their foreign partners and start to invest more.'
The summit also featured the release of research conducted by the Paramadina Public Policy Institute, which aimed to highlight key policy initiatives to address industry challenges and achieve higher levels of investment. The research, titled Indonesia's New Path: Promoting Investment, Nurturing Prosperity, shows that US foreign direct investment in Indonesia from 2004 to 2012 reached US$65 billion and was poised to grow by another $61 billion over the next five years if the investment environment was favorable.
AmCham Indonesia managing director Andrew White said the $65 billion investment had come from around 35 companies, with key sectors being agriculture, financial services, oil and gas, pharmacy
and IT.
'The main issues in Indonesia that remain of concern for US investors are the regulatory environment, infrastructure and labor,' he said.
