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China, Japan keen to invest in Indonesia
Shaking on it: President Joko âJokowiâ Widodo greets Chinese Vice Premier Liu Yandong at the State Palace, Jakarta, Wednesday
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Shaking on it: President Joko âJokowiâ Widodo greets Chinese Vice Premier Liu Yandong at the State Palace, Jakarta, Wednesday. Jokowi and Yandong talked about the follow-up on Chinaâs pledge to invest in various infrastructure projects in Indonesia.(JP/Wendra Ajistyatama) (JP/Wendra Ajistyatama)
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span class="inline inline-center">Shaking on it: President Joko 'Jokowi' Widodo greets Chinese Vice Premier Liu Yandong at the State Palace, Jakarta, Wednesday. Jokowi and Yandong talked about the follow-up on China's pledge to invest in various infrastructure projects in Indonesia.(JP/Wendra Ajistyatama)
Business leaders from China and Japan separately told President Joko 'Jokowi' Widodo on Wednesday that they remained committed to their investments in Indonesia and would follow through on their investment plans.
President Jokowi held a courtesy call meeting with Chinese Vice Premier Liu Yandong on Wednesday afternoon at the Merdeka Palace, later followed by a meeting with former Japanese prime minister Yasuo Fukuda, also president of the Japan Indonesia Association (Japinda).
State Secretary Pratikno said that during the meeting Jokowi underlined his desire for Chinese-backed investment projects to be realized.
'The point is that the President asked [China] to speed up the implementation of the projects that are backed by China's investments,' Pratikno said after the meeting. 'And Chinese Vice Premier said they are used to working fast. So, they will carry out the program swiftly.'
The government has previously said it would push Chinese investors to follow through on their plans to invest in Indonesia, as the realization of Chinese-backed investments has been lacking at best.
Of the total US$24.27 billion in planned investments from 2005 to 2014, only $1.8 billion, equal to 7 percent, were realized, statistics from the Investment Coordinating Board (BKPM) show. The BKPM said recently that major obstacles hampering the fulfilment of investment plans included the difficulty of finding local business partners, a general lack of knowledge about Indonesia and the incompetent bureaucracy that handles investment licenses.
Jokowi's fresh call to Chinese investors, Pratikno said, reflected the President's intention to prioritize the completion of planned projects.
Pratikno added, however, that certain projects were not on the table during Wednesday's meeting, although Jokowi underlined that his country was particularly concerned with infrastructure projects.
Coordinating Economic Minister Sofyan Djalil said China 'remains committed to helping Indonesia build its infrastructure'.
As for the Japanese delegation, Sofyan said the business leaders who came along with Japan's former prime minister Yasuo Fukuda had also expressed similar commitments.
'They expressed the commitment to continue investing in Indonesia,' he said.
The business leaders who met with Jokowi on Wednesday represented a number of major Japanese companies including Sumitomo, Toshiba, Suzuki Motor, Mitsubishi, Panasonic, Daihatsu, Mizuho Bank and Chiyoda.
Japan has long been a major foreign investor in Indonesia. It ranked as the second-biggest investor in Indonesia after Singapore, with total investments reaching $2 billion out of the $21.7 billion total from January to September last year.
However, Indonesia has yet to reap maximum benefit from the Indonesia-Japan Economic Partnership Agreement (IJ-EPA), which has been in place since 2008, due to a lack of product diversification, according to research by the Centre for Strategic and International Studies (CSIS) in 2013.
During the meeting, Sofyan said, Japanese delegations also conveyed problems they faced when investing in Indonesia, for example, those related to land acquisition.
'We will resolve it soon,' Sofyan said.
The meeting, however, did not discuss the construction of the 2,000 megawatt Batang coal-fired steam power plant (PLTU) in Central Java, a project funded by the Japanese government through the Japan Bank for International Cooperation (JBIC), which was halted due to land acquisition problems.
Sofyan also said the Japanese delegation made an offer to Indonesia to adopt Japan's Shinkansen high-speed rail technology.
The government remained undecided about a plan to construct a high-speed railway between Jakarta, Bandung and Surabaya, although it had given the go-ahead to China and Japan to conduct feasibility studies for the potential project.
'They were still offering Shinkansen,' Sofyan said. 'The President said we will look into the proposal.'
