Indonesia is increasingly targeted by foreign countries as an investment destination. This time, a report released Indonesia as the second best investment destination in the world. Indonesia is considered to have steady economic growth in the next few years. United Nations Conferrence on Trade and Development (UNCTD) data shows Indonesia as one of the promising countries in receiving foreign investment.
The rating of Indonesia as an investment-worthy country beats other Southeast Asian countries such as Malaysia and Singapore. Malaysia sits fourth while Singapore sits in fifth place. Here is the reason why Indonesia is good for investment.
- Indonesia have the great number of natural resources
Indonesia is a big country that has a lot of potential to be developed. Not only human resources (HR), Indonesia also has the potential on natural resources. The amount of potential owned by Indonesia becomes an opportunity to become a superpower country. Indonesia is also considered eligible to become a superpower country.
It has an abundance of natural resources to have the raw goods to drive a large production machine. Indonesia also has a large area to accommodate large engines. Therefore, Indonesia became a favorite country of world investment destination.
- Indonesia is expected to become the world’s fifth largest economy by 2030.
Data gathered revealed that Indonesia is expected to become the world’s fifth largest economy by 2030. In the same period the number of consumers in this country will grow to 135 million people and the productive age population is expected to reach 180 million people.
In addition, significant improvements in the environment and the rules of doing business in Indonesia are also reflected in the 2017 Ease of Doing Business report and Global Competitiveness Report 2017. In both reports Indonesia has succeeded in hoisting its position significantly in both categories this year.
- Local Economic Impacts of Dragon Tourism in Indonesia
- Economic Benefits of Transmigration in Indonesia
- Economic Effects of Tourism in Bali
- Government policy that support investment
The Indonesian government’s policy of providing additional incentives for investment in industry, tourism and special economic zones may also be the reason.
Support also arises from fiscal reforms for long-term sustainable growth of legal reforms to facilitate business and investment and concrete policies to combat corruption. This has made public confidence in the Indonesian Government at a high level and stronger investor confidence to invest in Indonesia.
- Indonesia economic growth is stable in the last 10 years (range 5% -6%)
Indonesia became one of the developing countries with strong economic resilience. This is evident from a stable economic growth of five percent. The growth is supported by controlled inflation. The reason Indonesia’s inflation over the last three years is maintained at around three percent.
- Focused to be industrial country
Indonesia is not only strong in agriculture and agriculture. However, Indonesia is also ambitious to become an industrial base that controls ASEAN’s market share of 40% and 60% from nine other countries. Can be proved by the number of new industries in Indonesia built so many investors are increasingly interested in Indonesia.
- Received investment grade rating from various world rating agencies
Indonesia received an investment grade rating from various global rating agencies. As the examples are S & P, Fitch Rating and Moody’s. Indonesia’s Ease of Doing Business rankings rose from 106 to 72. In 2018 October Indonesia hosted the IMF-World Bank Annual Meeting in Bali in October. The High Level International Conference event was also one of a series of IMF-World Bank preparation events.
- Inflation in Indonesia can be controlled
Indonesia’s economic growth is supported by controlled inflation. The reason Indonesia’s inflation over the last three years is maintained at around three percent. This makes investors feel safe to invest in Indonesia.
- Licensing Simplification
There are several factors that influence the amount of investment interest, such as the simplification of licensing or simplification of investment licensing in the country. So far the main grip of investors is the complexity of licensing in Indonesia, including overlapping regulatory bureaucracy, and many other things. But with this new policy, interest in investment is increasing.
- Japan Occupied Third Rank of the investor
Prospects and economic growth in Indonesia are still attractive to foreign investors, especially Japan. In the last five years, Japan has consistently been in the top five of the countries that invested in Indonesia. In fact, the total realization of Japanese investment in Indonesia ranks third until the end of the first semester of 2015. By the end of Semester I-2015, the realization of Japanese investment reached US $ 1.577 billion or 11.3% of the total realization of foreign investment in Indonesia during the first semester 2015.
- 11 Italian companies started investing
There 11 Italian companies expressed interest to invest their capital into Indonesia. The interest came from the telecom sector of US $ 4.5 million, electricity US $ 380 million, turbine industry for power plant of US $ 25 million, automotive industry US $ 90 million, shipbuilding sector US $ 10 million, and construction worth US $ 280 million.
Such interest can be seriously categorized as immediate actionable with the application of principle permit to BKPM. The average company has already met with its local partner or has determined its location.
- Social Factors Effecting Business in Indonesia
- Reasons Why is Indonesia Good for Business
- Business Practices in Indonesia
- Americans Capitalize on the Infrastructure Sector
In addition to Japan, South Korea and Italy, the United States is also interested to invest in Indonesia. This time they are in the industry supporting infrastructure. The reason the United States is interested in investing in this field is because of the lack of equitable distribution of infrastructure facilities in Indonesia, so that the sector is considered as a sector that benefits for America as well as Indonesia.
- The development of Special Economic Zones (KEK)/(SEZs)
The development of Special Economic Zones (KEK) is expected to encourage regional economic growth, through the entry of more investment to the island of Bangka. The existence of KEK will encourage more investment, both from outside the region and abroad to enter the province. The more SEZs, the investors have many options. I think it’s a good idea and initiative to advance the property and tourism sector.
- Great potential market with 250 inhabitants of Indonesia
Indonesia’s population of hundreds of millions is the largest market potential in Southeast Asia. With the purchasing power of the people, investors will be more interested in investing their capital to Indonesia. Not to mention, Indonesians is a dynamic and open society to the global market.
In conclusion, the fact that Indonesia becomes the second position of Best Countries to Invest in the World should make us proud of Indonesia. Whatever government program to support the development of Indonesia, we just need to support them.