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Indonesia on its toes to boost economy

Posted: 05 Mar 2014 ?? ?Print Version ?Bookmark and Share

Keywords:Indonesia? investment? Japan? Thailand?

Indonesia is arranging visits to Japan, South Korea, China, the U.S. and Europe to endorse industrial zones in the east and central Java, according to Indonesia Investment Coordinating Board Chairman Mahendra Siregar in a Bloomberg report.

The country's foreign-direct investment rose by about 22 per cent at around $22 billion within only a year, with the majority $4.7 billion contribution coming from Japan. This jump happened in 2013, around the same time when political unrest in Thailand started escalating, and Malaysia's minimum wage levels were increased.

The Japan External Trade Organisation (JETRO) said in the same report that the Japanese companies are voluntarily turning to Indonesia because of the political situation in Thailand. JETRO's Jakarta Office President Director Kenichi Tomiyoshi commented that the introduction of minimum wages in Malaysia will also drive the Japanese investors to Medan, which is an hour's flight away from Kuala Lumpur.

In December, the government eased off some restrictions on foreign ownership, announcing rules such as granting 100 per cent ownership of power plants built under public-private partnerships to foreigners. This is said to bring $3.5 billion in Japanese investment by mid-2015 from expansion by existing companies including Toshiba.

At the same time that Indonesia is presenting a more attractive image against its neighbours, cheaper and less risky, the country is reported to have snatched the top spot from China for being the most promising destinations for the Japanese companies over the next three years.

JETRO estimates investments from over 100 small and medium sized Japanese companies, joining about a thousand others already operating in the country, Tomiyoshi said through Bloomberg.

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