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Ada Pertanyaan? Hubungi Kami Nadia Maharani, Fitri N. Heriani
Photo by: SGP
As one of the primary pillars of national economic growth, infrastructure is set to play a hugely important role in the government’s ongoing attempts to boost the country’s slowing economy. These efforts, however, are being hampered by the sluggish pace of development and replacement of the Indonesia’s ageing infrastructure, which is in turn leading to businesses having to bear the burden of high logistical expenses.
Confirming the parlous condition of Indonesia’s infrastructure, Sofjan Wanandi, Head of the Vice President Expert Staff for Economic Affairs, recently stated that domestic products were failing in their bid to compete with foreign products, largely due to infrastructure issues, and that such failure was hampering economic growth.
“The largest [difference] lies in logistical costs, and in these our budget is far below those of foreign countries,” stated Mr. Wanandi during a dialogue which was held at the Indonesia Investment Coordinating Board (“BKPM”) Headquarters last Wednesday.
According to Mr. Wanandi, Indonesia’s national infrastructure is vastly inferior to that of neighboring countries, such as Malaysia and Singapore, and thus the government should be focusing its energies on developing, upgrading and maintaining the country’s moribund systems.
Moreover, Mr. Wanandi stressed that future economic growth was heavily reliant on the immediate repair, development and expansion of Indonesia’s road and transportation infrastructure in order that domestic competitiveness be boosted.
Mr. Wanandi has therefore emphasized the need for government to follow through on its promises to kickstart mass infrastructure projects, because attempts to lure investors here without delivering on such promises will surely contribute to even more problems for the nation as a whole.
In order to expedite national infrastructure development, Mr. Wanandi has suggested that the government should streamline bureaucracy in order to achieve faster license processing for investors.
Conveying a more positive message, BKPM Chairman Franky Sibarani has revealed that Indonesia recently ranked highest among ASEAN nations with regard to attracting foreign direct investment (“FDI”) throughout Semester I (January-June) of 2015.
According to Financial Times data, Indonesia’s FDI amounted to 31 percent (USD 13.66 million), way above that of other ASEAN nations such as Vietnam (17 percent) and Malaysia (16 percent).
The Financial Times data proves that Indonesia remains the number-one-most-favored nation to invest in within the ASEAN region, in spite of the sluggish global economy.
“The data also makes clear that the weakening national currency and economy have not deterred foreign direct investment in Indonesia,” assured Mr. Sibarani.
Mr. Sibarani asserted that despite a 15.8 percent decrease in FDI in the country in comparison with Semester I of 2014, the total investment coming into the Asia-Pacific region in Semester I of 2015 showed a growth of 9.2 percent over 2014’s figure. This fact relates to two causes that underlie current investment in the ASEAN nations by foreign countries.
Firstly, according to the BKPM, the top ten countries investing in the ASEAN nations are supporters of the region’s more market-oriented countries and are investing in them accordingly. Secondly, three ASEAN nations are themselves top-ten sources of investment within ASEAN, which proves that intra-ASEAN investment is currently accelerating.
“Through our BKPM representatives in Singapore, we are making a concerted effort to attract intra-ASEAN investment interest in Indonesia, and the interest of Singapore and Malaysia in particular,” concluded Mr. Sibarani
In addition, Mr. Sibarani emphasized that the BKPM’s main future challenge was to realize the high demand for foreign direct investment. This year, the BKPM is targeting investment amounting to as much as IDR 519.5 trillion. Presently, as of Semester I of 2015, 50 percent (IDR 259.7 trillion) of this target has already been achieved.
(sp)
Nadia Maharani, Fitri N. Heriani
Photo by: SGP
As one of the primary pillars of national economic growth, infrastructure is set to play a hugely important role in the government’s ongoing attempts to boost the country’s slowing economy. These efforts, however, are being hampered by the sluggish pace of development and replacement of the Indonesia’s ageing infrastructure, which is in turn leading to businesses having to bear the burden of high logistical expenses.
Confirming the parlous condition of Indonesia’s infrastructure, Sofjan Wanandi, Head of the Vice President Expert Staff for Economic Affairs, recently stated that domestic products were failing in their bid to compete with foreign products, largely due to infrastructure issues, and that such failure was hampering economic growth.
“The largest [difference] lies in logistical costs, and in these our budget is far below those of foreign countries,” stated Mr. Wanandi during a dialogue which was held at the Indonesia Investment Coordinating Board (“BKPM”) Headquarters last Wednesday.
According to Mr. Wanandi, Indonesia’s national infrastructure is vastly inferior to that of neighboring countries, such as Malaysia and Singapore, and thus the government should be focusing its energies on developing, upgrading and maintaining the country’s moribund systems.
Moreover, Mr. Wanandi stressed that future economic growth was heavily reliant on the immediate repair, development and expansion of Indonesia’s road and transportation infrastructure in order that domestic competitiveness be boosted.
Mr. Wanandi has therefore emphasized the need for government to follow through on its promises to kickstart mass infrastructure projects, because attempts to lure investors here without delivering on such promises will surely contribute to even more problems for the nation as a whole.
In order to expedite national infrastructure development, Mr. Wanandi has suggested that the government should streamline bureaucracy in order to achieve faster license processing for investors.
Conveying a more positive message, BKPM Chairman Franky Sibarani has revealed that Indonesia recently ranked highest among ASEAN nations with regard to attracting foreign direct investment (“FDI”) throughout Semester I (January-June) of 2015.
According to Financial Times data, Indonesia’s FDI amounted to 31 percent (USD 13.66 million), way above that of other ASEAN nations such as Vietnam (17 percent) and Malaysia (16 percent).
The Financial Times data proves that Indonesia remains the number-one-most-favored nation to invest in within the ASEAN region, in spite of the sluggish global economy.
“The data also makes clear that the weakening national currency and economy have not deterred foreign direct investment in Indonesia,” assured Mr. Sibarani.
Mr. Sibarani asserted that despite a 15.8 percent decrease in FDI in the country in comparison with Semester I of 2014, the total investment coming into the Asia-Pacific region in Semester I of 2015 showed a growth of 9.2 percent over 2014’s figure. This fact relates to two causes that underlie current investment in the ASEAN nations by foreign countries.
Firstly, according to the BKPM, the top ten countries investing in the ASEAN nations are supporters of the region’s more market-oriented countries and are investing in them accordingly. Secondly, three ASEAN nations are themselves top-ten sources of investment within ASEAN, which proves that intra-ASEAN investment is currently accelerating.
“Through our BKPM representatives in Singapore, we are making a concerted effort to attract intra-ASEAN investment interest in Indonesia, and the interest of Singapore and Malaysia in particular,” concluded Mr. Sibarani
In addition, Mr. Sibarani emphasized that the BKPM’s main future challenge was to realize the high demand for foreign direct investment. This year, the BKPM is targeting investment amounting to as much as IDR 519.5 trillion. Presently, as of Semester I of 2015, 50 percent (IDR 259.7 trillion) of this target has already been achieved.
(sp)