On Nov. 12, I joined 22 US companies and the US ambassador to Indonesia, Robert O. Blake at the US-Indonesia Investment Summit in Jakarta. I met with senior Indonesian officials who provided encouraging signals that they, executing the vision of President Joko “Jokowi” Widodo, are determined to implement a problem-solving, action-oriented approach to advancing Indonesia’s economic development. Equally, the summit demonstrated the commitment of US companies and the US government to working with the Indonesian government and the private sector to expand trade and investment with this important trading partner.
We know that American industry wants to continue to expand its market presence and to invest in Indonesia. The US Department of Commerce works with these companies to open doors and nurture connections between American and Indonesian businesses, and to encourage investment in one another’s communities for the long term, thereby creating jobs in both the US and Indonesia.
During the early days of his administration, US President Barack Obama made a deliberate and strategic decision to deepen American engagement in the Asia-Pacific — the world’s fastest-growing region. He saw that America’s economic future is based significantly in the Asia-Pacific and that our collective economic futures are inextricably intertwined. The administration’s rebalance is focused on security, prosperity, democratic governance and human rights.
The Asia rebalance is a key priority of the US Department of Commerce Secretary, Penny Pritzker. Just this year, secretary Pritzker has made four trips to Asia, visiting seven countries. The US Department of Commerce’s emphasis is on the economic and commercial dimension of the rebalance, focusing on deepening trade and investment ties with existing partners, like Indonesia. Expanding our economic engagement with the region requires working multilaterally to build both the physical and soft infrastructure necessary for the growth of America’s emerging partners in the 21st century.
The region’s growth creates attractive opportunities for both the US and Asian nations. Today, this region is home to nearly 60 percent of global Gross Domestic Product (GDP), and includes the world’s fastest-growing economies. Its rapidly growing middle class will demand quality goods and services. A strong US-Indonesia commercial relationship involves several of the pillars of our Asia strategy. Taken as a whole, ASEAN is the US’ fourth-largest export market and its fourth-largest overall trading partner.
Two-way trade between the US and Indonesia is rapidly expanding, reaching nearly US$28 billion in 2013. In 2013, the US was Indonesia’s fourth-largest export market, and the largest buyer of a variety of Indonesian products. Many Indonesians have good-paying manufacturing jobs today because the US is a leading consumer of Indonesian exports.
The US applauds President Jokowi’s goal of achieving a 7 percent annual GDP growth rate. We want to see Indonesia realize its economic potential — and trade and investment have a major role to play. When an economy grows, our trade with that country grows, and jobs are created in both countries.
And investment generally follows trade. The more US companies export to Indonesia, the more they will learn of the investment opportunities in the country. As the new government achieves its goal of improving the business climate, US business will be more likely to increase their investments in Indonesia.
The US is already deeply invested in the Indonesian economy and its success. From 2004 to 2012, US corporations invested more than $65 billion in Indonesia.
Indonesia’s priorities of developing its infrastructure, including power and transportation, and its maritime focus are of great interest to American companies. In addition, a renewed effort to make improvements in the human capital, education, healthcare and agriculture sectors are welcomed by US companies that can provide world-class products and services to advance these initiatives.
The Department of Commerce utilizes a variety of tools to help expand trade and investment abroad. Trade missions are one of the most effective ways of directly connecting US companies with potential public and private sector partners in critical markets, including Indonesia. Trade missions include small- and medium-sized companies, which are key drivers to growth economies. The Department of Commerce will bring a trade mission here to Indonesia in early 2015.
Indonesia is at an inflection point. We applaud the government’s objective of improving the business climate, which is critical for increased investment. In the experience of American companies, countries can best promote foreign direct investment by adopting policies organized around certain basic principles.
These include a commitment to open and non-discriminatory regimes for foreign investment, a level, competitive playing field between state-owned entities and private commercial enterprises, strong substantive and procedural protections for investors and their investments; strong rules on transparency and public participation in the making of rules affecting investment, responsible business conduct by multinational enterprises and, to the extent that countries choose to establish foreign investment screening mechanisms, those mechanisms should be narrowly tailored to focus only on genuine national security considerations.
We believe that governments can fully embrace these principles without compromising their ability to regulate in the public interest.
By focusing on making Indonesia a more attractive destination for trade and investment, Indonesia will be able to compete in the region and globally. Greater investment in Indonesia, including investment in human capital, will help create the sustainable growth that will create jobs, provide good wages and opportunities for all of your citizens.
Throughout Indonesia’s transformation to a global, competitive economy, the US and Indonesia will be economic partners, each benefiting from the other country’s success and growth. This partnership, in addition to enriching Americans and Indonesians, can be a driving force for all of Asia.
Source: The Jakarta Post