Businesses intend to boost investment in Indonesia

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Japan’s Chamber of Commerce and Industry has expressed its intention to boost economic cooperation with Indonesia to President Joko “Jokowi” Widodo in a meeting at Merdeka Palace on Monday.

The meeting was attended by a number of representatives from the Japanese Chamber of Commerce and Industry, including its chairman Akio Mimura, upon their request. Coordinating Economic Minister Sofyan Djalil, Industry Minister Saleh Husin and Trade Minister Rachmat Gobel accompanied Jokowi.

Mimura said “Indonesia is still an attractive country [in terms of its economy]” and that they “expect the existing good relations will continue in the future”.

“And we also want to make relations that are good and beneficial for Indonesia,” he added after the meeting, saying that they hoped Jokowi would visit Japan soon.

He refused to provide details on the Japanese investments, but said that “if [we] think about the good relations between the two countries, of course, the investment will be more advanced”.

Minister Sofyan said the group expressed its intention “to boost investment in Indonesia” as imports from Japan have been outperforming exports.

Japan has been a long-time major foreign investor in Southeast Asia’s biggest economy. Japan ranked as the second-biggest investor in the country after Singapore with total investments reaching US$2 billion of the $21.7 billion total of foreign direct investments into Indonesia from January to September last year.

However, Indonesia has yet to reap maximum benefits from the Indonesia-Japan Economic Partnership Agreement (IJ-EPA), which has been implemented since 2008, due to a lack of product diversification, among other things, according to research by the Centre for Strategic and International Studies (CSIS) in 2013.

Indonesia’s exports to Japan have been outpaced by imports, with exports only increasing by 9.53 percent to $27.09 billion from 2009 to 2013, while imports expanded by 17.81 percent to $19.28 billion, according to the Trade Ministry.

Indonesia has also demanded a review several times, as it claims it benefits less than expected from the deal, but no follow-up has been undertaken thus far.

During the Monday meeting, the Japanese chamber of commerce also conveyed problems it faced when investing in Indonesia, for example, issues related to infrastructure and manpower skills, Mimura said.

Saleh said the Japanese business group mentioned some problems hindering its investments in Indonesia, including those related to land acquisition, high energy costs and transportation. They hoped that the government would soon be able to fix such problems, he added.

According to Saleh, discussion over the construction of the 2,000 megawatt (MW) Batang coal-fired steam power plant (PLTU) in Central Java, which has halted due to land acquisition problems, was also on the table during Monday’s meeting.

The President, Saleh added, told them that he had studied the Batang PLTU issue, funded by the Japanese government through the Japan Bank for International Cooperation (JBIC), and “hopefully in the near future it is completed”.

The Indonesian government, Saleh said, also expressed its intention “to involve Japanese companies” in its ambitious five-year plan to add 35,000 MW to the electricity grid by building multiple power plants, which is expected to help the country avert a crippling power crisis, with electricity demand rising at a rate of 7 percent a year.

Rachmat has previously said that Japan had given a nod to Indonesia’s proposal to review the agreement to further step up bilateral economic relations, which was raised during Rachmat’s recent visit to Japan, where he met with Japanese Prime Minister Shinzo Abe and his counterpart, Economy, Trade and Industry Minister Yoichi Miyazawa.

During a meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit last November in Beijing, China, Jokowi told Japanese Prime Minister Shinzo Abe that Indonesia would need more investments from Japan in the manufacturing sector.

Abe has previously said that Japan would want to contribute more to Indonesia’s industrial and human resources development.

 

 

 

Source : Jakarta Post | February 3, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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