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COVID-19, bureaucratic inefficiency hurt foreign business confidence in Indonesia: Survey
Foreign companies have become less optimistic about prospects for revenue, profit, investment and the workforce during the pandemic.
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Foreign enterprises operating in Indonesia have grown less optimistic about doing business in the country as a result of bureaucratic inefficiency and the continuing spread of COVID-19, a survey shows, but more than half of business are considering major investments in the country over the next two years. (JP/Dhoni Setiawan)
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oreign enterprises operating in Indonesia have grown less optimistic about doing business in the country as a result of bureaucratic inefficiency and the continuing spread of COVID-19, a survey shows, but more than half of business are considering major investments in the country over the next two years.
The 2020 International Business Confidence Index published by the British Chamber of Commerce (BritCham) Indonesia in partnership with the European Business Chamber of Commerce (EuroCham) Indonesia found that foreign companies had become less optimistic about prospects for revenue, profit, investment and the workforce during the pandemic.
The survey’s respondents – 108 foreign businesses polled from Sept. 16 to Oct. 9 – largely believed that the nation’s COVID-19 situation and its regulatory environment would be the main factors affecting business over the next 12 months. Labor policies, they thought, would be the least likely to affect business over that period.
The respondents also believed the macroeconomic outlook could worsen over the next 12 months, driven by deterioration in the investment climate and the political environment.
“Despite the negative outlook and the concerns that have been flagged, more than half of the international businesses in the survey are expecting to increase their investments or expand their workforce,” BritCham honorary secretary Nick Holder said during a virtual discussion of the survey on Wednesday.
Forty five percent of respondents were considering major investments in the next two years. About 24 percent were not planning further investment.
“Indonesia’s efforts to attract foreign businesses and make the country a good working environment should be paying off in terms of investment and increases in the workforce," Holder said.
