Indonesia Aims to Quadruple Foreign Investment by 2025

Indonesia’s economy remains impacted by global dynamics, including the U.S. election results, the slowing of China’s economy, and geopolitical conflicts in certain countries and regions.

David Sumual, Chief Economist at PT Bank Central Asia, stated that Indonesia cannot rely solely on domestic savings to achieve economic growth rates above 5%.

“For Indonesia’s economy to grow at 6% to 7%, it needs to attract three to four times more foreign investment than it does currently,” David said at the Denpasar 12 Discussion Forum on November 6, 2024, as reported by asatunews.co.id.

At the same forum, CNBC Indonesia’s Deputy Editor in Chief, Muchamad Ghufron, highlighted Indonesia’s struggles to attract foreign investors, especially in technology sectors.

He mentioned that many potential investors face challenges with regulatory ease and land acquisition, leading them to prefer locations like Johor, Malaysia, for their factory establishments.

Ghufron urged the government to revise regulations that hinder investment and to adopt import policies that support local products.

Sonny Y Soeharso, Deputy Secretary of the Expert Council of the NasDem Party, emphasized the importance of aligning key government programs with available budgets.

“Program priorities and budget structures must be aligned, necessitating prudent budgetary politics,” he said, adding that without significant economic strategies, growth would likely hover around 5%.

To achieve a growth rate of 7%-8%, he suggested targeted policies, strategies, and workforce skill improvements to meet global market needs.

Indonesian Vice Chair of People’s Consultative Assembly, Lestari Moerdijat, known as Rerie, in her opening remarks, stressed the role of optimism in achieving Indonesia’s growth targets.

“Optimism is crucial for driving economic growth, yet we must also prepare for challenges and continue seeking solutions,” Rerie stated.

In September, Bank Indonesia predicted an economic growth rate of 4.8% to 5.6% by 2025. She expressed hope that economic challenges would not hinder Indonesia’s aspirations for a prosperous society.

Top Foreign Investors in Indonesia

According to Investment Minister Rosan Perkasa Roeslani, Singapore has consistently been Indonesia’s top foreign investor over the past decade.

Foreign investment from Singapore reached $9.39 billion in 2021, increased to $13.28 billion in 2022, and surged to $15.36 billion in 2023. As of September 2024, Singapore’s investment in Indonesia reached $14.35 billion.

Under Law No. 25 of 2007, foreign investment in Indonesia involves overseas capital injection for establishing businesses within the country, either fully foreign-owned or in joint ventures with local investors. This capital inflow boosts job opportunities, enhances local workforce skills, and fosters economic growth.

According to the Central Statistics Agency, FDI in Indonesia has shown consistent growth, from $31.09 billion in 2021 to $45.6 billion in 2022, reaching $50.26 billion in 2023, quoting form goodstats.id.

Apart from Singapore, other key investors in Indonesia are Hong Kong and China. In 2022, Hong Kong’s FDI reached $5.51 billion, rising to $6.06 billion in 2023. By September 2024, Hong Kong’s investment totaled $6 billion.

“Hong Kong consistency in investing in Indonesia with interests in sectors like solar energy and services such as law firm and accounting.” Said Kevin Chiu, Director for Indonesia at the Hong Kong Trade Development Council as reported by jakartaglobe.id.

Meanwhile, China, another major investor, contributed $8.23 billion in 2022 and $7.44 billion in 2023, with $5.78 billion in investments by September 2024. China’s investments span across construction, maritime, and infrastructure projects. A total of 464 construction projects in Indonesia funded by Chinese capital.

These foreign investments play a critical role in enhancing Indonesia’s economic landscape, supporting infrastructure development, creating jobs, and contributing to overall economic stability.

The Indonesian government is expected to continue adjusting its policies to make the nation an even more attractive destination for foreign investors.

 

Sources: asatunews.co.id, goodstats.id, jakartaglobe.id

Image source: pexels.com

Latest Article
Indonesia Growth Strategies Focus on 3 Sectors to Attract Investment
JAKARTA – Deputy Minister of Investment and Downstream Industry, Todotua Pasaribu, acknowledged that...
Apple Proposes Investing USD 100 million in Indonesia
Apple has committed to investing USD 100 million (approximately IDR 1.57 trillion) in Indonesia to address...
Bank Indonesia Keeps Benchmark Rate at 6 percent
Tempo is reporting that Bank Indonesia’s (BI) Governor, Perry Warjiyo said in a press briefing...
Indonesia Combats Digital Fraud with Integrated Anti-Scam Center
Digital financial fraud and crimes are becoming increasingly sophisticated, prompting urgent action from...
Indonesia May Revive Tax Amnesty in 2025
Bloomberg is reporting that Indonesia will discuss reviving its tax amnesty program next year as President...

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.

Contact Our Consultants

Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.