French ambassador to Indonesia
The French government has embarked on a vast program of pro-business reforms, aimed at generating more solid, more inclusive and more sustainable growth. This national strategy is based on four points.
The first objective is to promote investment by cutting corporate and personal tax and streamlining administrative
The second objective is to strengthen public policies in favor of corporate growth and innovation.
The third and fourth objectives focus on renewing the French social model by promoting labor market flexibility and fostering human capital through a US$15 billion investment plan in skill development.
Recent international studies confirm that these measures are effective, as shown by the renewed interest of international investors for France in the last two years.
In 2019, France ranked fifth in the AT. Kearney Foreign Direct Investment Confidence Index
In 2018, the number of foreign investment projects in France increased to 1027 according to Ernst and Young’s (EY) Attractiveness Barometer, after 1019 in 2017. This is the highest number of foreign investment projects ever recorded in France.
This performance is all the more remarkable considering that investment projects decreased at the European level for the first time in 10 years (6,356 investments projects in 2018, down 4 percent from 2017).
France is the most attractive destination for industrial investments, as well as for research and development (R&D) investments. R&D investments projects increased by 85 percent, to a total of 144, more that the total R&D investments of Germany and the United Kingdom together.
Moreover, funds raised for start-ups in France increased by 41 percent compared to 2017. EY’s report shows that the measures taken by the current administration have successfully addressed the major concerns of foreign investors.
The tax system and labor costs were the main factors weighing on France’s attractiveness in the previous editions of the study but they are no longer the first concern of investors.
According to another study, KPMG’s barometer, Paris was the world’s second most attractive city in terms of volume of foreign direct investments (FDI) and the first destination for R&D investments, before Singapore and Bangalore in India.
Overall, FDI to France went from 32 billion euros in 2016 to 44 billion in 2017 and reached 48 billion in 2018.
France also made some progress in international rankings such as the World Economic Forum’s Global Competitiveness Index in which France ranks 17th in 2019 while we stood at the 22nd rank in 2018.
Firstly, France is becoming the most relevant and the most competitive entry gate to the European market, with a market of 70 million consumers, as well as more and more tourists come every year.
We benefit from one of the cheapest power supply on the continent and are home to several well-connected logistic hubs.
Second, Indonesia needs smart investments abroad to fill local gaps in technologies and human capital. Indonesia is already one of the fastest growing digital markets in Asia and home to four unicorns.
To keep this momentum and fuel future growth, it will need to source talents and innovation abroad either by importing, attracting or investing.
Many Indonesian companies already buy French technologies such as aircrafts, satellites, industrial machineries, telecommunication equipment or fiber optic etc. Investing in the economy that brings those technologies to life is the logical next step. And it is a step that has never been so easy to make.
The writer is French ambassador to Indonesia.
Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.