Jakarta (ANTARA News) - The looming US economic recession will not affect Indonesia`s investment growth if the government issues policies favoring investment inflows, an official said.
To increase the investment growth, the government must attract investors to engage in the manufacture of raw materials into semi-finished goods, Chairman of the Investment Coordinating Board (BKPM) M Lutfi said on Tuesday.
As many Indonesian commodities had nothing to do with the US economy, the government must protect the commodities 60 percent of which was used to meet domestic needs, he said.
"If I am not mistaken our exports to the US only account for 2 percent of our commodities while the remaining 60 percent is used to meet domestic needs," he said.
Because of the US economic slowdown, China would likely dump its export commodities to Southeast Asia. The question now was whether the government was ready to face the matter, he said.
There must be good market mechanism to protect national products. This did not mean that Indonesia rejected the entry of Chinese goods into its domestic market, he said.
He said the government was making an effort to change its policies related to the protection of domestic industries. Some of the policies concerned the protection of investment.
Foreign investment inflows to Indonesia reached US$14.4 billion last year. The BKPM had set the country`s investment growth rate target of 15.2 percent for this year while the Finance Minister put the figure at 12 percent, he said.(*)