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Indonesia could achieve another rating upgrade if it can tackle problems with infrastructure, crack down on rampant corruption and prepare measures to mitigate external shocks, says Fitch Ratings, which last month raised the nation’s sovereign rating to investment level.

“There are some weaknesses that Indonesia needs to address for a further upgrade, such as structure issues and external finances,” Philip McNicholas, Fitch Ratings’ director for Asia-Pacific sovereigns, said at an event in Jakarta on Tuesday.

“These factors are both low relative to its BBB peers,” he said. Thailand is rated BBB, Fitch’s second-lowest investment grade.

Fitch raised Indonesia’s long-term sovereign debt rating to BBB-, the lowest investment grade, from BB+ on Dec. 15, citing the country’s robust economic growth, prudent fiscal and monetary policies. The outlook is positive, which means that Indonesia is inclined for a rating upgrade.

McNicholas said that a further upgrade is not likely to take place in the next 12 to 24 months, but added that there were ways to accelerate a rating upgrade.

Indonesia needs to deal with problems in infrastructure development and boost per-capita income, which in turn would lead the country to have more state revenue, he said.

Lack of infrastructure spending has been holding back the economy from growing faster. Fitch forecast Indonesia’s economy to expand by 6 percent this year, which is lower than the 6.3 percent growth estimate by Bank Indonesia.

Gita Wirjawan, trade minister and head of the Investment Coordinating Board (BKPM), acknowledged that infrastructure and land acquisition issues were obstacles to Indonesia’s economic growth.

However, Indonesia’s prospects outweigh its infrastructure problems, he said at a Jakarta Foreign Correspondents Club luncheon in Jakarta on Tuesday.

“Korea had been crazy aggressive, with or without the land issues and infrastructure development. They are willing to take risks before the problems are fixed,” Gita said, referring to South Korea’s top steel maker, Posco. The company in 2010 inked a $6 billion deal with Indonesia’s state-owned Krakatau Steel.

McNicholas said that state revenue in Indonesia — Southeast Asia’s largest economy — accounted for about 15.9 percent of the country’s gross domestic product in 2010. That ratio is estimated to have increased to 17 percent in 2011, he said.

“Overall, this is in line with countries like India and the Philippines. However, this level is still way below the median of the BBB group,” he said.

He noted that the ratio among countries with a BBB rating stood at 33 percent.

Indonesia also needs to crack down on corruption, McNicholas said. He said it was important that corruption cases that caught the public’s attention in the past few years “were not swept under the carpet” and that such cases were brought to trial.

Indonesia’s financial market should be prepared for external liquidity shocks caused by the European debt crisis, he said.

“If Europe becomes worse, investors will go to back to dollar assets, which will not be good for the rupiah,” said Harry Su, head researcher at Bahana Securities.

Finance Minister Agus Martowardojo said in his key note speech at the finance event that authorities have prepared safeguards for a sudden shock in the global market.

“Crisis management protocols” have been prepared to counter shocks in financial and capital markets, he said, and that a “bond stabilization framework” will mitigate any impact of a sudden flight of capital from overseas investors.

Agus said that Bank Indonesia’s large amount of foreign reserves have also helped buffer the capital outflow as international investors retreat from the local market. The central bank currently has $110 billion in reserves.

“The upgrade to investment grade is part of recovery process but also evidence of a lot of changes in policies over the last couple of years and trajectory of growth is stable,” said Andrew Steel, head of Asia-Pacific corporate ratings at Fitch.

However, with only the lowest level of investment grade at BBB-, “it is still early for investment,” he said.

Some fund managers have policies in place that require having the second-lowest investment grade before they will invest in a country, Steel said.

Additional reporting by Muhammad Al Azhari