Regional News
Indonesia provides good opportunities for international investment, and US investors are interested in doing business in the archipelago because of its strong economic growth, the US ambassador has said.
“Companies are looking more at the situation here in Indonesia, rather than what’s happening in the US,” Scot Marciel told reporters in Jakarta on Wednesday. “We have seen increase in both two-way trade and investment, so I think it’s going quite well.”
Bilateral trade in the first sixth months of 2011 increased by 20 percent, and Indonesian exports to the United States could be up by more than 20 percent despite a slowdown in the US economy, he said. Investment from the United States into Indonesia will reach more than $1 billion this year, Marciel said.
According to data from the Indonesia Investment Coordinating Board (BKPM), the United States — at $936 million — was the second largest contributor to foreign direct investment in Indonesia in the first half, after Singapore.
Investment from the US soared to $930 million last year from $172 million in 2009, with companies including agricultural firm Cargill and shoemaker Wolverine setting up offices.
The ambassador said that Indonesia’s fast-growing economy, tame inflation and having the world’s fourth largest population was appealing for US businesses. Indonesia has benefited from rising exports and strong domestic spending, which could accelerate economic growth to 6.7 percent next year, from a projected 6.5 percent in 2011.
Marciel encouraged the government to improve its bureaucratic process to make it easier for US companies and citizens to set up operations.
“Investors would make their judgment based on the overall economy, and also how smooth the environment is,” he said.
Indonesia is currently ranked 121 out of 183 countries in terms of overall ease of doing business, according to the Doing Business 2011 list compiled by the International Finance Corporation, the private investment arm of the World Bank.
Marciel praised the Indonesian government’s moves to provide tax breaks for some investors, saying it showed the government’s “willingness to try to create a better business environment.”
General Motors, the largest car maker in the United States, last month announced plans to invest $150 million to reactivate its Bekasi manufacturing plant in West Java, a move that could create 800 new jobs.
The company could benefit from the government’s plan to exempt investors from paying tax for up to 10 years if their investment is worth at least Rp 1 trillion ($120 million).
President Barack Obama in his visit last November called for US businesses to increase their investment in Indonesia.
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By: Dion Bisara
Source: Jakarta Globe, Sept. 1, 2011
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