World Bank Introduces RI as Investment Destination

KOMPAS/WISNU WIDIANTORO

President Joko Widodo (right) and World Bank President Jim Yong Kim (left) walk to their seats for a meeting at Merdeka Palace, Jakarta, Wednesday  (26/7).

JAKARTA, KOMPAS — The World Bank is committed to introducing Indonesia as a feasible investment destination. Besides its high economic growth potential, it has a growing number of startups in several regions.

Also, Indonesia has a strong leadership. President Joko Widodo, as the head of government and head of state, keeps improving the ease in doing business and economic growth through a number of regulations.

The commitment to introducing Indonesia as a main investment destination was conveyed by World Bank president Jim Yong Kim after a closed-door meeting with President Jokowi at Merdeka Palace in Jakarta on Wednesday (26/7). “We want to introduce Indonesia as a good place for investors to put money,” he said.

Kim came with World Bank vice president for East Asia and the Pacific Victoria Kwakwa, director for Indonesia and Timor Leste Rodrigo Chaves, International Finance Corporation regional director Vivek Pathak, World Bank operational manager for Indonesia Rolande Pryce and World Bank president advisor Aurelie Chardon. They met President Jokowi, who was accompanied by Cabinet Secretary Pramono Anung, Coordinating Maritime Minister Luhut Binsar Pandjaitan, Coordinating Economic Minister Darmin Nasution, Finance Minister Sri Mulyani and other ministers.

Three reasons

Kim said that at least three things made Indonesia a feasible investment destination. First, Indonesia has a relatively strong leadership. As a president, Jokowi has big ideas for the country and the Indonesian people.

Jokowi is seen as capable of bringing high economic growth to Indonesia. At a time when most countries were facing economic slowdown, Indonesia’s economy grew over 5 percent.

Second, there are many new industries in some regions in Indonesia. Startup businesses that are ready to welcome capital injections from investors, particularly foreign investors.

Third is that the World Bank sees Indonesia’s economic growth potential as very high. Moreover, Indonesia also has made a commitment to continuing efforts to improve the investment climate.

Meanwhile, in his remarks, President Jokowi voiced appreciation for the partnership between World Bank and Indonesia. The President also thanked the World Bank for its assistance in alleviating poverty, human development and mitigating climate change impacts. The President also expressed appreciation for the World Bank’s decision to raise Indonesia’s ranking on the ease of investment index.

Quality

The government’s strategy in pushing for the realization of investment is not only about investment quantity or value. It is also about quality. The quality aspect relates to investment orientation in vocational education and export performance.

“Talking about quantity or investment value, the biggest players are Japan, Korea and China,” said Coordinating Investment Board (BKPM) head Thomas Lembong during a press conference in Jakarta.

According to BKPM data, total domestic investment (PMDN) and foreign investment (PMA) in January-June 2017 stood at Rp 336.7 trillion, a 12.9 percent increase from the same period in 2016 of Rp 298.1 trillion.

The five countries or territories with biggest investment realization in the first half of 2017 were Singapore with US$3.7 billion, Japan with $2.8 billion, China with $2 billion, Hong Kong with $1 billion and the United States with $1 billion.

On the other side, Thomas Lembong said his office appreciated high quality investment from Europe and the US. Their investment tends to focus on technical sectors. European and US investment relates to vocational education or industries requiring a high level of skill.

Commitment

PT Bank HSBC country head of global banking Haryanto Suganda said every time he met foreign business players, such as those from China, many of them wanted to know about the Indonesian government\'s commitment to infrastructure development.

“When meeting construction companies, like state-owned firms from China, they ask how strongly committed Indonesia is to it. Then, they ask about bureaucracy and legal certainty. They also ask about land acquisition,” Haryanto said during a discussion with the media regarding the Belt and Road Initiative.

Indonesian Employers Association chairman Hariyadi Sukamdani said private companies were interested in investing in infrastructure, but it had not been maximal because the government was not ready.

(NAD/NTA/LAS/CAS)