Mon, 04 Oct 2010

From: The Jakarta Globe

By Dion Bisara
Jakarta. Indonesia expects annual investment from Taiwan to double to $2 billion next year, primarily in the textiles, manufacturing and infrastructure sectors, the head of the national investment board said on Friday.

“We see large interest from Taiwanese investors today,” said Gita Wirjawan, head of the Investment Coordinating Board (BKPM).

“They have invested $14 billion in the past 10 or 20 years, or slightly less than $1 billion per year. That is too small. I hope it will be $2 billion starting next year.”

His comments came after a meeting with a Taiwanese delegation led by Economic Affairs Minister Shih Yen-shiang.

“The potential is high. We talked about billions of dollars per year,” Gita said.

Industry Minister MS Hidayat also expressed optimism for the budding relationship, and said the government could provide up to 1,000 hectares of land in Bekasi for Taiwanese companies to set up factories.

“The infrastructure there is ready,” Hidayat said.

“They have said that they want to set up footwear and electronics plants there. And if they want to open machinery plants, Gita and I would support it greatly, because that means we would not have to import machinery from China.”

Shih said Taiwanese businesses had come to regard Indonesia as an ideal target for investment due to its abundant natural resources, huge market, stable economy and democratic governance.

“We are here with 36 companies that are interested in investing in Indonesia,” he said. “This country is regarded as an ideal place to invest because of its natural resources, land and huge market of 240 million people.”

Other insiders have pointed out that Indonesia has become especially attractive as wages and land prices have risen in China, prompting Taiwanese businesses to find cost-friendly alternatives.

“Indonesia is now coming back economically, and it has now become more stable politically. On the other hand, China has become more expensive,” said Andrew LY Hsia, a representative from the Taipei Economic and Trade Office in Indonesia.

“So many of our investors are thinking of coming to Indonesia.”

But Hsia said a lack of understanding about Indonesia had long scared away Taiwanese investment.

“People there tend to thinks it’s dangerous here, with riots, etc. It’s different now, but [some people still] don’t know. The government needs to market it.”

Theodore MH Huang, honorary chairman of the Chinese National Association of Industry and Commerce, shared many of Hsia’s positive views about Indonesia, crediting the country for achieving economic and political stability.

“I think Indonesia has improved for doing business - the government is more stable and the currency is more stable,” Huang said.

“In short, stability is confirmed. This is important for business, so we hope investment will continue. Indonesia also has a lot of talented people, but they are not yet fully utilized.”

Huang, also the chairman of Taiwanese electronics and machinery producer TECO Group, declined to estimate how much Taiwanese investment was coming.

“Within three to six months, there will be some follow-ups and at that point in time we can sum up how much investment will come. But I can say the mood is changing now.”

He added that cooperation between the Indonesian government and prospective investors would help get investment funds flowing at their full potential.

“I think your government should study the mentality of foreign investors in more detail. The government,” he said, “should come up with specific programs that will fit each one individually.”