Chatib Basri Reveals Strategy Behind Bringing Toyota's Rp61 Trillion Investment to Karawang
Former head of the Investment Coordinating Board (BKPM) for the 2012–2013 period and senior economist, Chatib Basri, has revealed the strategy behind his success in attracting Toyota's investment from Thailand to Karawang, West Java.
Speaking at the Grab Business Forum 2025 held at the Fairmont Hotel in Jakarta on Thursday (8/5), Chatib recounted that the effort began when severe flooding struck Thailand in 2012, paralysing the country's automotive industry hub.
Spotting the opportunity, Chatib and his BKPM team immediately flew to Tokyo to meet the then CEO of Toyota, Akio Toyoda. The objective was to offer Indonesia as an alternative location for Toyota's factory investment in Southeast Asia.
Notably, during the meeting, Chatib did not attempt to compare Indonesia's advantages with Thailand's. "At that time, I didn't talk about Indonesia being better than Thailand. Because I knew Thailand was still superior in many respects regarding its investment climate," he said.
Instead, he emphasised the importance of risk diversification for Toyota. Chatib argued that if the company did not promptly build a factory in another location such as Indonesia, Toyota would face significant risk should a similar disaster occur in the future.
"There's flooding in Thailand right now. Because of this flooding, your production for Southeast Asia has stopped. This is a natural disaster — it cannot be predicted. So the reason Toyota moved wasn't because we were better, but because they needed to mitigate risk," he explained.
The result of this approach was considerable. Toyota ultimately decided to build production facilities in Karawang with a total investment value of USD 3.7 billion, or approximately Rp61 trillion.
Chatib regarded this success as proof that even the smallest opportunity must be optimised by the government. He also stressed the importance of creating a conducive investment climate to attract foreign investors.
"The way investors think is like animal spirits. If one moves, the others will follow. If a stock is said to be good, everyone buys. But if it's said to be bad, everyone sells. The government must understand this psychology when attracting investment," he concluded.
Speaking at the Grab Business Forum 2025 held at the Fairmont Hotel in Jakarta on Thursday (8/5), Chatib recounted that the effort began when severe flooding struck Thailand in 2012, paralysing the country's automotive industry hub.
Spotting the opportunity, Chatib and his BKPM team immediately flew to Tokyo to meet the then CEO of Toyota, Akio Toyoda. The objective was to offer Indonesia as an alternative location for Toyota's factory investment in Southeast Asia.
Notably, during the meeting, Chatib did not attempt to compare Indonesia's advantages with Thailand's. "At that time, I didn't talk about Indonesia being better than Thailand. Because I knew Thailand was still superior in many respects regarding its investment climate," he said.
Instead, he emphasised the importance of risk diversification for Toyota. Chatib argued that if the company did not promptly build a factory in another location such as Indonesia, Toyota would face significant risk should a similar disaster occur in the future.
"There's flooding in Thailand right now. Because of this flooding, your production for Southeast Asia has stopped. This is a natural disaster — it cannot be predicted. So the reason Toyota moved wasn't because we were better, but because they needed to mitigate risk," he explained.
The result of this approach was considerable. Toyota ultimately decided to build production facilities in Karawang with a total investment value of USD 3.7 billion, or approximately Rp61 trillion.
Chatib regarded this success as proof that even the smallest opportunity must be optimised by the government. He also stressed the importance of creating a conducive investment climate to attract foreign investors.
"The way investors think is like animal spirits. If one moves, the others will follow. If a stock is said to be good, everyone buys. But if it's said to be bad, everyone sells. The government must understand this psychology when attracting investment," he concluded.