HKI: Rupiah Volatility and Stock Market Fluctuations Do Not Undermine Indonesia's Investment Attractiveness
The Indonesian Industrial Estate Association (HKI) believes that the weakening of the Rupiah and the correction of the Jakarta Composite Index (IHSG) have not reduced Indonesia’s attractiveness as a long-term investment destination amidst increasing global economic uncertainty.
HKI Chairman Akhmad Ma’ruf Maulana stated that Indonesia possesses several advantages that keep it attractive to investors. These factors include a large domestic market, a demographic bonus, the availability of natural resources, industrial downstreaming programmes, and the expanding network of industrial estates supporting national manufacturing and logistics activities. According to him, this combination of factors ensures Indonesia remains on the radar of global investors seeking production bases and strategic markets in Southeast Asia.
Amidst global economic pressures, HKI sees an opportunity for Indonesia to attract more investment as many multinational companies review their global supply chains. Ma’ruf continued that the primary focus should not be on panicking over market volatility, but rather on ensuring that investments can enter and be realised more quickly. The simplification of regulations, acceleration of licensing, synchronisation of central and regional policies, certainty in spatial planning, accelerated energy provision, and improved infrastructure quality will be decisive factors in winning the global investment competition.
“Investors essentially look for three things: certainty, speed, and ease. When these three elements are provided consistently, Indonesia will remain competitive even as the world faces economic and geopolitical pressures,” Ma’ruf said in a statement.
Furthermore, HKI appreciates the steps taken by the government, Bank Indonesia, and financial authorities to maintain national financial system stability and enhance the attractiveness of domestic assets to preserve market confidence. Ma’ruf believes this coordination serves as a positive signal to investors that the government remains responsive in maintaining the investment climate and economic stability.
Ma’ruf emphasised that the current momentum of global uncertainty can be utilised by Indonesia to strengthen its position as a primary investment destination in the region. He noted that history shows countries capable of moving swiftly amidst uncertainty emerge as winners when the global economy recovers. Therefore, he stressed that now is the moment to strengthen collaboration between the government, the business world, industrial estates, and investors to maintain investment flows and national economic growth.
Regarding current financial market volatility, he argued it should be approached proportionally. Fluctuations in the Rupiah exchange rate and capital markets are economic cycles that occur during every period of global uncertainty. Geopolitical tensions, high global interest rates, energy price volatility, and shifts in international capital flows exert pressure on developing nations, not just Indonesia.
Ma’ruf noted that Indonesia has repeatedly faced various global economic challenges, ranging from the Asian financial crisis and the 2008 global crisis to the Covid-19 pandemic and various geopolitical upheavals. “That experience shows that national economic resilience should not be measured solely by daily movements in exchange rates or stock indices, but by the ability to maintain real economic activity, investment, production, and job creation,” he concluded.