Jakarta (ANTARA News) – The investment climate in Indonesia in the last two years has been favorable following investment reforms and an improved business climate. As a result, the government is optimistic of achieving its investment target this year.
Its optimism is based on its success last year when it exceeded its target. The countrys realization of investment in 2015 reached some Rp540 trillion, up 16.6 percent from that in 2014, surpassing the Capital Investment Coordinating Boards (BKPMs) target set at Rp519.5 trillion.
After all, investors confidence in Indonesia and its business climate has been improving, leading to a sense of optimism that the government will be able to achieve this years investment projection.
The BKPM has set a target to attract Rp594.8 trillion worth of investment this year, and Rp678.8 trillion next year. BKPM Chief Thomas Lembong, popularly called Tom, said the investors confidence in Indonesias investment climate is high.
This was reflected in the high number of business leaders who participated in the Forbes Global CEO Conference. “As of now, the investors sentiment is very good. After carrying out reforms and an improvement in the investment climate, the government was finally able to enhance investors trust,” Thomas pointed out in Jakarta on Wednesday.
The governments efforts to introduce a series of 14 economic policy packages since September last year and a campaign to intensively promote investment opportunities abroad has led to increased foreign investors interest, making Indonesia the second-best investment destination.
The policy package is aimed at encouraging people all over Indonesia to expand their economic activities efficiently and to connect them to the rest of the world. In the 14th economic policy package, the government has come up with a roadmap.
This roadmap will enable businesses to expand in a better way.
“Economic reforms will continue and will have a fundamental impact on Indonesias progress,” Thomas asserted. These reforms received a positive response from businesspeople taking part in the Forbes Global CEO Conference.
Leaders of various companies who attended the Forbes Global CEO Conference appreciated the breakthrough steps taken by the government to attract investments.
One of these steps is the tax amnesty program which has been proving to be a success in repatriating funds from abroad.
In the first three months period (July-September 2016), the government earned more than Rp97 trillion in penalties with Rp137 trillion worth of assets repatriated from abroad and Rp3,500 trillion worth of taxable assets, previously not reported, being declared.
CEO Wanda Group Jianlin Wangyang who won the Malcolm S. Forbes lifetime achievement award appreciated the Indonesian governments efforts to improve the investment climate.
The governments latest economic policy package is expected to lead to more investment in the e-commerce sector. It outlines a roadmap for the purpose and is expected to induce a sense of certainty in business besides facilitating the e-commerce industry.
In terms of foreign investor countries, Singapore was recorded as being the largest investor in Indonesia in 2015. Singapores investment reached US$5.9 billion, followed by Malaysia (US$3.1 billion), Japan (US$2.9 billion), the Netherlands (US$1.3 billion), and South Korea (US$1.2 billion).
China is ranked ninth, while Hong Kong was sixth, he added. China has been in the spotlight because it is one of the countries expected to make major investments in Indonesia.
If China and Hong Kong are taken together, the total is around US$1.5 billion, making the duo the fourth major investor.
Regarding investment from Europe, the BKPM noted that Europes investment potential was quite huge but Indonesia was yet to optimally benefit from it. However, investment from Europe in Indonesia did show an upwardly trend.
Based on the BKPM data, the investment commitments from European countries in January 2016 reached Rp6.53 trillion, almost 10 times higher than Rp670 billion recorded in the same period in the previous year.
The realization of investment from Europe reached Rp149.8 trillion during the period between 2010 and 2015. The increase in investment commitments from Europe continued to show a positive trend in 2015, with a 16 percent hike reflected in Rp37.3 trillion worth of investment, compared to Rp32.2 trillion in 2014.
The investment in 2016 is expected to boost the production sector and increase exports.
Therefore, the government has set a foreign investment target of Rp386.4 trillion in 2016, accounting for 53.9 percent of the total Rp594.8 trillion investment plan.
The government and social media giant Facebook are seeking cooperation to boost internet access for small and medium enterprises (SMEs), Vice President Jusuf Kalla said on Saturday after a meeting with Facebook CEO Mark Zuckerberg on the sidelines of an APEC summit in Lima.
Better internet access could help thousands of Indonesian SMEs in remote regions of the country that so far have not been able to promote their products domestically and internationally.
Kalla said Zuckerberg had offered Indonesia to use Facebook’s Aquila drone, a solar-powered unmanned aerial vehicle, to beam the internet to remote parts of Indonesia. He added that the government welcomed the plan and had assigned the Industry Ministry to work on the details.
He said better connectivity could help SMEs in the regions grow their business. “An online system provides information about the market and products. This system could unite markets and protect the quality of products being sold in the market,” Kalla said.
Facebook’s offer to Indonesia is part of the company’s effort to help small businesses tap the potential economic benefits from around 4.2 billion people around the world who have yet to get access to the internet.
“Mark [Zuckerberg] in his speeches cited Indonesia as an example where regions could be connected through the internet to produce economic benefits,” Kalla said.
Under President Joko “Jokowi” Widodo’s administration, Indonesia’s vision for the digital economy foresees local companies valued at a total of US$130 billion and the birth of 1,000 so-called technopreneurs by 2020.
Jokowi has issued a number of policies to implement its e-commerce road map, including economic stimulus packages and greater access to financial support for SMEs and IT-based companies.
Kalla said the government had given financial support to SMEs across the country, which would be supplemented by an agreement by APEC members to help each other in conducting training to support SMEs.
“When we talk about SMEs, we are talking about the SDGs [Sustainable Development Goals]. With strong SMEs a country can alleviate poverty, as demanded by the APEC,” Kalla said.
On Saturday, the first day of the two-day APEC summit, Kalla joined the APEC Business Advisory Council (ABAC) along with 21 leaders of APEC member countries, including outgoing US President Barack Obama, Russian President Vladimir Putin, Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe, to discuss a theme titled “Growing Global MSMEs and Promoting Sustainable Development.”
Kalla said that during the forum Indonesia had proposed that APEC member countries cut import tariffs on what he called Indonesia’s development products, such as crude palm oil, coffee, cocoa, rubber and rattan.
“The development products must be accepted without tariffs in those countries, because that is one of the ways to support agricultural products in a developing country like Indonesia. If such products are prevented [from entering foreign markets] it will create a new kind of poverty,” Kalla said.
Meanwhile, Deputy Foreign Minister AM Fachir said Indonesia welcomed the adoption of APEC’s Education Strategy and the APEC Baseline Report on Current Education Status during the APEC Ministerial Meeting (AMM), which had “Developing Human Capital” as its theme.
“Indonesia is committed to creating an education community that is strong and cohesive at the APEC,” said Fachir.
President Joko ‘Jokowi’ Widodo on Tuesday (15/11) at the State Palace welcomed the founder and the CEO of a technology company, Plug and Play, Saeed Amidi.
Minister of Communication and Informatics Rudiantara who accompanied the President at the meeting said that the purpose of Amidi’s visit to Indonesia is to follow up the previous discussion with the President on February at Plug and Play headquarter, at Silicon Valley, Los Angeles, US. At that time, President Jokowi invited Saeed to invest in Indonesia as the country is planning to expand in e-commerce sector.
“In accordance with the declaration of the 14th Economic Policy Package, the road map of e-commerce, he also welcomed the idea and just had a discussion with the President,” said Rudiantara.
According to the Minister, because Plug and Play has branches in several countries, the Government requests that the investments in Indonesia need to be done with joint venture companies.
“So, the venture capital is located abroad, only the money enters this country. However, we asked Saeed Amidi and Plug and Play to do joint investment in Indonesia,” the Minister said.
Previously, Plug and Play together with GAN Kapital (a local investment company) launched Plug and Play Indonesia at Jakarta (14/11).
Furthermore, this company will act as the accelerator means for the start-up companies in Indonesia that focuses on mobile and financial technologies sector that are strengthened with the platform of cooperation innovation.
Plug and Play Indonesia will develop facilities for the alliance company through digital- based solution and will also invest in 50 companies in Indonesia.
Chosen alliance companies will be granted fund support, endorsement, and several other supports in accelerator programs for 3 months. It is scheduled to be launched in January and we will gather a number of big companies, said the Minister.
Rudiantara added that the soft launching has already been held on the other day, and Astra also has shown commitment to work together with Plug and Play. In addition, there will be also 5 universities to join as well as certain number of International Corporation.
Plug and Play is an accelerator digital platform for the start-up, which focuses on financial technology sector that already has branches in over 22 countries.
There are currently more than 200 corporate partners, investors, universities, and many more that engages in retail sector, financial technology, Internet, media, and cloud.
For the record, GAN Kapital is an Indonesian investment company that focuses on investing to technology-based start-up companies.
Also attending the meeting were Minister of Communication and Informatics Rudiantara, Minister of State Secretary Pratikno, Head of Creative Economy Agency (Bekraf) Triawan Munaf, and CEO of GAN Kapital Anthony Pradipta. During the meeting, Saeed also handed over a figure that contains a photo of the President taken in Silicon Valley.
Indonesian Pencak Silat Association, or IPSI, will host the 17th World Pencak Silat Championships at Lila Buana sports hall in Denpasar, Bali on Dec. 3.
IPSI committee head Eddy Prabowo said that athletes will compete in 24 categories, 18 of which are martial arts and six are in the arts.
“Preparations are still underway and we will continue to coordinate with our counterparts in Bali,” Eddy said in Jakarta on Tuesday (15/11).
Eddy said there are already athletes from 32 countries who have signed up for the event and athletes from an additional 13 countries have yet to confirm their attendance.
“We don’t only expect to be a successful organizer, but also to be the major winner,” he added.
Meanwhile, Erizal Chaniago, secretary general of the association, said that they have selected the country’s 28 best martial artists.
“We’ve selected 28 of the best out of 71 who competed at various tournaments recently. They are now being trained at a national camp in Jakarta,” Erizal said.