Thu, 25 Mar 2010

From: The Jakarta Post

By Aditya Suharmoko, The Jakarta Post, Jakarta
Foreign direct investment is flowing into Indonesia, now considered an attractive investment destination, says a senior economist.

The Economic Intelligence Unit (EIU) Corporate Network Director Ross O’Brien said in Jakarta
on Wednesday that a lot of investment that was held back during the recent global financial crisis, which peaked in October 2008, would start flowing to the country this year.

“A lot of firms put investment plans on hold. A lot of these projects will come out of storage,” O’Brien said after a media briefing on the Indonesia Summit, to be held Thursday in Jakarta at the Shangri-La Hotel.

The summit, hosted by Economist Conferences, a division of the Economist Intelligence Unit (EIU),, will see over 100 business leaders and government officials from Asia taking part in an interactive discussion.

Vice President Boediono, Finance Minister Sri Mulyani Indrawati, Trade Minister Mari Elka Pangestu and Industry Minister MS Hidayat are among those attending.

O’Brien estimated investment growth in Indonesia would reach 13 percent this year.Investment in Indonesia grew by 3.3 percent last year, according to the Central Statistics Agency (BPS). But Indonesia’s economy managed to grow by 4.5 percent in 2009 as household consumption remained strong. The government estimates the economy will expand at 5.5 percent this year
on the back of stronger trade and investment.

The EIU forecasts Indonesia’s economy will expand 5.6 percent in 2010, and 5.9 percent in
2011, due to a resilient domestic market and good investment opportunities.

The head of the Investment Coordinating Board (BKPM), Gita Wirjawan, said he was upbeat that investment in the country would grow by 15 percent this year.

Indonesia still has some problems caused by factors affecting the investment climate, he admitted. But these will not lead to Indonesia losing momentum in attracting investment, he said.

“We still have issues with legal certainties and transparency.

But so does the US, the UK and other emerging countries. Every country has its own issues,”
Gita said.

The BKPM has been involved in intensive communication with the International Finance Corporation to change the perspectives of foreign investors on Indonesia.

Gita said the future visits of Chinese Prime Minister Wen Jiabao and US President Barack Obama would add to the momentum leading to Indonesia becoming better positioned on the international map.

He said Indonesia could attract Rp 2,000 trillion (US$220 billion) in investment annually if the country could tap the momentum.