U.S. investors are becoming more interested in putting their money into Indonesia's textile, commodities, furniture, mineral, and energy sectors amid an improving business and political climate here, a minister says.
Trade Minister Mari E. Pangestu, who on a visit to the U.S. last week held one-on-one meetings with investors there and held discussions on investment opportunities in Indonesia, said that U.S. businesses wanted to invest here as part of a strategy of diversifying their production bases away from China.
"Many investors and businesspeople (in the U.S.) expressed interest in building plants here," Mari said Monday.
The U.S. is one of the country's main export markets and sources of foreign investment.
Indonesia's exports to the U.S. last year amounted to US$12.01 billion, an 11.15 percent increase compared to the previous year, while U.S. investment in Indonesia reached over US$10.4 billion and is expected to increase significantly in the coming years.
Mari said that U.S. investors were interested in putting their money into the textile and furniture industries in Indonesia as a way of diversifying their investments away from China.
She said that the U.S. business community also applauded the government for its success in resolving the problems faced by U.S. oil giant ExxonMobil Corp and mining giant Freeport McMoRan Copper and Gold Inc with their investments in Indonesia. The way in which these problems had been dealt with were positive and would lead to increased in investment in the energy and minerals sectors.
Investors planning to invest in the country's commodities sector, particularly cocoa and coffee plantations, were also encouraged by the positive developments in the political and security areas.
"We also explained about improvements in our infrastructure. It is about image. Overall, U.S. investors have a very positive outlook on Indonesia," Mari said.
During Mari's visit, the U.S. and Indonesian governments signed agreement on ways to combat illegal logging and concrete measures for cooperation in preventing improper transshipment of Indonesian commodities, such as shrimp and textiles.
Many said that illegal logging caused environmental damage, economic hardship and depressed the price of legally harvested timber.
China, the world's largest importer of tropical wood, played a central role in laundering illegal timber from endangered forests in Asia-Pacific, global environmental group Greenpeace said in a report recently.
Much of the timber supply to China came from Indonesia and Papua New Guinea, where at least three-quarters of all logging was illegal, the group said.
Mari said both countries agreed to conduct exchanges of information on the illegal transshipment of Indonesian commodities. She added that the country already had action plans to address the problems, including tightening up the procedures related to export and import documentation.
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