Govt Wants US Investment To Double in Short Order
Dion Bisara, Shirley Christie & Camelia Pasandaran
Indonesia expects the United States to more than double investment in Southeast Asia’s largest economy to capitalize on the stable political climate and growing economic clout.
“I expect [US investment] to be steady at between $1 billion and $2 billion per year,” Gita Wirjawan, chairman of the Investment Coordinating Board (BKPM), said on Wednesday. “Foreign investment from the United States could double this year and in the years to come to up to $2 billion.”
Gita was speaking on the sidelines of this year’s International Conference of the Overseas Private Investment Corporation in Jakarta. OPIC, an independent US state agency that mobilizes private investment in emerging nations, finishes its two-day conference at the Shangri-La Hotel today.
Gita cited US companies that already had their eye on Indonesia, with Coca-Cola to open $500 million bottling plant, while Caterpillar may invest $300 million to $500 million to open a heavy machinery factory.
“It’s currently being discussed, but Coca-Cola’s plan is more immediate than Caterpillar’s, which expects some fiscal incentives,” he said.
Foreign direct investment from the US in Indonesia soared to $930 million last year from $171.5 million in 2009, according to data from the BKPM, making it the third-largest investor in the country after the United Kingdom and Singapore.
Scot Marciel, the USambassador to Indonesia, also said he was confident that American investment to Indonesia would exceed $1 billion this year.
President Susilo Bambang Yudhoyono called on US investors to team up with Indonesian companies to capitalize on the opportunities.
“You can take part in the development of our six growth corridors that we are now designing,” the president said. “You can take part in infrastructure and connectivity projects across the country. You can enter into joint projects to develop our industries, not just within the mining sector but also in manufacturing and services.’’
Under the country’s economic development blueprint — dubbed the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development [MP3EI] through 2025 — six regions in the country are designated as main economic corridors. Sumatra will be developed as an agricultural and national energy center, while Kalimantan will focus on mining and energy, Sulawesi-North Maluku on agriculture and fisheries, Bali-Nusa Tenggara on tourism and supporting national food self-sufficiency, Papua-Maluku on natural and human resources, and Java on industry and services.
Yudhoyono said US investors should be “persistent and patient” if they want to invest in Indonesia.
“We don’t expect to [have] an immediate return, but if you wait, it will be very fruitful,” he said.
Elizabeth Littlefield, president and chief executive of OPIC, said the agency offered facilities to US investors looking for partners abroad and vice-versa.
OPIC can provide financing for any project, without limits, as long as a US entity owns at least 25 percent of the equity. “US investors don’t have to be the majority [shareholder],” she said, declining to give an estimate of how much investment will come to Indonesia.
OPIC has $13 billion invested in projects worldwide, but only $76 million of that has been channeled into Indonesia so far.