Kadin to publish 'industry map'
Tony Hotland, Jakarta
The Indonesian Chamber of Commerce and Industry (Kadin) will publish an "industry map" to help domestic and foreign investors in making investment decisions in the country.
"This map is intended to provide a sort of investment guideline in the next five years especially for foreign investment to speed up our economic recovery," said Kadin chairman Mohamad S. Hidayat on the sidelines of a meeting with Korean businessmen here on Wednesday.
Hidayat said that the map would help investors in deciding which areas and commodities to invest in, and describe the focus of Indonesian industries: whether it would be more labor intensive or natural resources based.
"The map will cover not only the manufacturing and mining sectors, but also plantations, agriculture, food, fisheries, high technology, and other sectors," he said.
The chamber has been working with industry associations and Japanese businessmen, and plans to ask consultant McKenzie International to assist in the making of the map. The publication is scheduled for September this year.
"McKenzie International was once asked by India to help make the map for its information and technology industry. Now, India is quite competitive in this sector.
"We are also trying to ensure that the map also explores conditions demanded by most foreign investors. Most of them still have concerns about law and order problems, such as legal uncertainty and regulations on labor here," he explained.
Legal uncertainty and labor issues have been the major concerns for many foreign investors, a factor which has discouraged them from coming and prompted them to relocate their business in other countries.
Hidayat also said that Indonesia had been losing its competitiveness significantly compared to other Asian countries, and was currently equal to Cambodia and Laos.
"In order to reach an economic growth rate a 6 percent per year, we need real investment of around Rp 315 trillion or approximately US$35 million. The government's investment is still minimum, therefore the larger part is expected to come from private domestic and foreign investors," he said.
Data from the Investment Coordinating Board (BKPM) shows that foreign investment approvals during the first quarter of the year totaled 209 projects with a combined investment value of $1.5 billion.
Popular sectors were trading and repair (72 projects), services (36), metal machinery and electronic industry (17), and hotel and restaurant (16).
There was enormous investment value in the metal ($538.9 million), construction ($282.2 million), hotel ($263.7 million), and food (174.8 million) sectors, with favored investment locations in Jakarta, West Java and Banten.