U.S. firms to continue investment in Indonesia

Fitri Wulandari, The Jakarta Post, Jakarta

American businesses will continue to invest in Indonesia this year despite the upcoming general and presidential elections, a U.S. business representative said on Thursday.

U.S.-Indonesia Business Council chairman Robert W. Haines said Indonesia's improving macroeconomic condition provided a favorable atmosphere for U.S. companies to continue or start investing during the election year.

"We heard some people said investment should wait until the election is over. But we think the structure for investment exists and American investment does not have to wait," Haines said at a press briefing.

"We are willing to come out, we want to invest and the opportunity is there," he added.

The country's economic indicators have been improving over the past year, but analysts have said that investors would prefer to wait and see due to the protracted seven-month election period this year, with the general election in April followed by the country's first direct presidential election in July. Indonesia needs more investment to help push economic growth higher to create enough jobs for the millions of unemployed people.

Haines is leading a delegation of 25 U.S. businesspeople from 14 leading U.S. companies on a five-day visit to Indonesia to discuss the opportunity for investment and trade with legislators and government officials at both local and national levels.

Members of the delegation are from leading companies, such as oil and gas company Unocal Corporation and ExxonMobil, Cisco System, FedEx, General Electric Company, General Motors, Motorola and Oracle Corporation.

U.S-Indonesia Business Council is part of the U.S.-ASEAN Business Council, which is a private business organization aimed at promoting trade and investment between the United States and Southeast Asian countries (ASEAN). The council has some 200 U.S. companies as members.

According to Haines, investment from U.S. companies in Indonesia stands at around US$10 billion.

Walter B. Lohman, executive director of the U.S.-ASEAN Business Council, said Indonesia held many investment opportunities for U.S. investors.

"Our companies are interested in investing more in Indonesia. That is why we are here in the country for the long term and that is what the dialogue is about," Lohman said.

While noting progress the government has made in promoting investment, Haines said the government needed to address issues like transparency, rule of law and sanctity of contract as well as lack of clarity in the Regional Autonomy Law to help reduce the risks of their potential investments.

"Businesses would like to have predictability and stability of their investment in Indonesia. Those are very important to business," Haines said.

Haines said investors were concerned about having their contracts recognized and having a fair hearing at court when disagreement arose with the government or Indonesian companies.

Transparency in regulations is also another thing that the business sector would look into. Businesses would like information on regulation changes and be invited to provide input on how changes in regulations should be made, Haines said.

Lohman said investors would also like to see clarity in the Regional Autonomy Law to reduce uncertainty in investment.

"Right now, there is the local, the provincial and the national level. Each has a role in investment. And it is not always clear which one you have to go to," Lohman said.

However, Haines said some local governments had made progress by setting up a one roof system for investment approval.

Lohman added that with globalization, Indonesia had to compete with the whole world for investment.

"Indonesia does not lose its attractiveness. But it is an increasingly competitive world. So we are talking about consistencies which are more important in competitiveness," Lohman said.