Trying to entice United States investors to increase investment in Indonesia, President Joko “Jokowi” Widodo has promised to continue economic reforms to make Southeast Asia’s largest economy a more attractive destination to do business.

The administration is revising regulations on tax incentives for investment and seeks to pass them by the end of this month.

Speaking to 41 US-based companies grouped under the US-ASEAN Business Council on Tuesday morning, the President underlined the significance of investment into Indonesia from the world’s top economy.

“American investment into Indonesia has been sizeable and plays an important role in the Indonesian economy,” Jokowi said during a meeting with the council at the Merdeka Palace.

Realized foreign direct investment (FDI) in Indonesia by US firms surged by 71.5 percent to US$1.99 billion last year, driven by 625 projects. That is significantly higher than the 30 percent growth to $1.16 billion seen in 2016, spread across 540 projects.

The US stood still as the sixth-largest foreign spender in the archipelago over the 2016-2017
period.

Jokowi also noted that the US brought high-quality investment into Indonesia through companies with powerful brands, state-of-the-art technology and a broad international network, including gold and copper miner Freeport-McMoRan, technology giants Google and Facebook and entertainment giant Walt Disney.

Consequently, he expected US companies to jack up their investment although he was also aware of the many challenges of doing business in Indonesia, from policies regarding digital payment and patents to complicated export-import procedures.

“Give me two months and I’ll bring you some positive [progress] on economic policy reforms,” Jokowi said.

Up to present, Jokowi has launched 16 packages of deregulation measures intended to boost investment in the country, including some launched in September 2015 to enhance the competitiveness of the domestic industry through de-bureaucratization and ensuring business certainty.

As a result, Indonesia has secured investment grade status from all global rating agencies, including from Fitch Ratings in late December, and moved up significantly in the World Bank’s ease of doing business ranking to 72 last year from only 140 in 2014.

Alexander C. Feldman, the president and CEO of the US-ASEAN Business Council, acknowledged Indonesia’s global achievements under Jokowi’s administration. However, he concurred that it had to address a number of challenges.

“Several challenges are pertaining to data localization. Some people say data is the oil of the 21st century, and it really touches every business,” Feldman said.

He further suggested that in order to draw more foreign investment, Indonesia needed to set new policies and regulations regarding data openness and accessibility. While protecting its citizens, it would also allow businesses to operate in a conducive manner as well.

“The President’s goal is to raise investment in Indonesia, and our goal is to see if we can help achieve that goal and see how we can work together to promote Indonesia as the destination for American investment. So, we perceive that as a challenge as well as an opportunity,” Feldman said.

Feldman particularly noted the US’ intention to bring more tourists to Indonesia as US payment technology companies, Visa and MasterCard, as well as travel firm Expedia were very interested in making investments and taking part in developing 10 emerging tourist destinations, also known as the “New Balis”.

They include Lake Toba in North Sumatra, Tanjung Kelayang in Bangka Belitung, Mandalika in West Nusa Tenggara, Labuan Bajo in East Nusa Tenggara, Wakatobi in Southeast Sulawesi and Morotai in Maluku.

The development of these destinations is estimated to require around $20 billion in investment.

US-based oil and gas giants ExxonMobil and Chevron are among the US-ASEAN Business Council delegates, who are holding a three-day meeting with their Indonesian counterparts starting on Tuesday.

During his five-day visit to the US last week, Deputy Energy and Mineral Resources Minister Arcandra Tahar also met with the two oil and gas companies along with other major energy companies, such as British Petroleum North America and Murphy Oil.

Arcandra claimed that in general those firms appreciated Indonesia’s deregulation efforts in the upstream oil and gas sector and would seek an opportunity to join the government’s auction of 26 oil and gas blocks.

“It’s important for us to attract such foreign firms to invest in Indonesia’s oil and gas blocks, particularly to carry out exploration activities, so that we can find new oil resources to be exploited in the future,” Arcandra said.

Popular

PDI-P will likely be part of opposition: Ganjar

Indonesia one step from Olympics after beating South Korea

Bahlil leads task force to boost sugar, bioethanol production in Papua