Bisnis.com, Jakarta \u2014 The shift in investment flows towards\ndeveloping countries or the Global South is seen as both an opportunity\nand a new challenge for Indonesia to accelerate industrialisation and\nstrengthen its position in the global supply chain.<\/p>\n
Warih Andang Tjahjono, Advisory Board member of the Industrial\nEngineering Community at Bandung Institute of Technology, said\ndeveloping countries are now the primary destination for global\ninvestors as economic growth slows in major nations such as China, the\nUnited States, and Europe.<\/p>\n
He added that this situation has turned regions such as Asia, Latin\nAmerica, Africa, and the Middle East into new battlegrounds for\nattracting foreign direct investment (FDI).<\/p>\n
\u2018Now we refer to Global South countries. The competition is\nintensifying, and Indonesia must continuously enhance its investment\nappeal,\u2019 he said at an industrial and investment forum on Tuesday, 26\nMay 2026.<\/p>\n
He explained that developed nations are facing domestic and\ngeopolitical challenges affecting global investment flows. The United\nStates is focusing on strengthening its own industry, while Europe\nremains under geopolitical pressures.<\/p>\n
China, meanwhile, has experienced a slowdown in economic growth\ncompared to previous years of 8-9% annual expansion. Current growth is\naround 5-6%.<\/p>\n
\u2018China has even shifted to domestic consumption rather than\ninvestment-driven growth. That is why the Global South is crucial. It\nincludes South America, Africa, the Middle East, India, and us in Asia,\u2019\nhe said at the Bisnis Indonesia Forum at the Bisnis Indonesia office on\nMonday, 25 May 2026.<\/p>\n
Amid these changes, Warih noted that Global South nations such as\nIndonesia, India, Brazil, and Mexico are competing to become new global\nmanufacturing hubs. He said Indonesia must respond by strengthening its\ninvestment climate and industrial competitiveness to avoid falling\nbehind other developing nations aggressively attracting global\nindustrial relocations.<\/p>\n
\u2018Brazil and Mexico are growing stronger. When their manufacturing\nsectors are robust, they become strong exporters,\u2019 Warih said.<\/p>\n
He assessed that Indonesia has significant advantages to win this\ncompetition, including a large domestic market, demographic dividend,\nand abundant natural resources. However, Indonesia must act faster to\nstrengthen its manufacturing sector, which currently contributes 18-19%\nto gross domestic product (GDP).<\/p>\n
By contrast, manufacturing contributes 27-40% to national economies\nin developed nations such as Japan, South Korea, China, and Germany. \u2018If\nIndonesia wants to be a strong nation, manufacturing must be a\ncornerstone,\u2019 he said.<\/p>\n
Warih also stressed the importance of FDI as a tool for integrating\nIndonesia into the global supply chain. Foreign investment, he said, is\nnot just about bringing in capital but also opening access to export\nmarkets and international production networks.<\/p>\n
\u2018FDI is not just about inflows of money, but about Indonesia becoming\npart of the global supply chain,\u2019 he said.<\/p>\n
Furthermore, he noted that the government needs to be more aggressive\nin building a positive perception of Indonesia among global investors\namid increasingly fierce competition among developing nations.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/global-south-emerges-as-new-battleground-for-manufacturing-investment-1779902717", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }