Indonesia's relatively stable political situation and improved economic fundamentals will help the nation attract more investment in 2011, Switzerland-based investment bank UBS says.
Indonesia was the only nation in the ASEAN-5, a group comprised of Indonesia, Malaysia, the Philippines, Singapore and Thailand, that was currently spending more on investment than before the 1997 financial crisis, UBS economist Edward Teather said.
“Indonesia spent more than 30 percent of its gross domestic product [GDP] on investment last year. Other ASEAN-5 countries mostly spent between 15 percent and 25 percent,” he told a media briefing on the sidelines of the UBS Indonesia Conference 2011 in Jakarta on Tuesday.
He said that higher investment in infrastructure and improving worker productivity might lead to faster economic growth in Indonesia.
“The combination of a young and growing population, moderate debt, potential productivity catch-up and healthy investment rates means Indonesia is still good for growth,” he told reporters, adding that Indonesia would remain a promising investment destination for the next several years.
Economic growth of 6.1 percent led Indonesia’s GDP to top Rp 6,422.9 trillion (US$721 billion) in 2010, according to the Central Statistics Agency.
The Investment Coordinating Board (BKPM) said the nation’s investment realization reached Rp 208 trillion in 2010, exceeding a previous estimate of Rp 160 trillion, and up 54 percent from Rp 132 trillion in 2009.
The board has set a target of creating Rp 240 trillion in investment in 2011.