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Indonesia is Still Trusted as an Investment Destination Country


By : Putri Ganeswari )*

Indonesia is still trusted as one of the best investment destinations by other countries, even in the midst of world geopolitical shocks and the global economy.

Until now, the world economy continues to be hit by conditions that are completely uncertain and not even a few countries in the world are still facing a crisis due to the global situation. Starting from the COVID-19 pandemic, which until now has not really ended, to the conflict between Russia and Ukraine which caused some commodity supplies to be disrupted.

Even in this condition, the President of the Republic of Indonesia, Joko Widodo, actually said that Indonesia was not too affected by how difficult the world economy was, because of the good condition of the national economic fundamentals. He also added that it turns out that other countries are still looking at Indonesia as one of their investment destinations.

Unmitigated, a number of large international companies are very interested in making their investment in the country. According to Jokowi, as stated by MR Samir, the condition of economic and political stability is very good in Indonesia, which has led to high trust among foreign investors.

Regarding trust, according to Jokowi, it has become one of the most important points to attract investors from a country. The reason is, if a country is considered bad and does not succeed in gaining trust in the eyes of investors, then they will never enter to invest. Instead, the country will continue to depend on import activities.

For this reason, Indonesia will continue to improve its image in order to be able to attract the trust of investors, including their interest in investing in the country thanks to the positive impression and trust that has been given. Jokowi also emphasized that it is actually not easy to gain the trust of investors. Indonesia will continue to strive to do so.

One example given by President Jokowi was when a pipe factory from the Netherlands was built in the Batang Integrated Industrial Estate (KIT). So automatically, Indonesia, which previously imported a lot of pipes from other countries, since the existence of the factory, Indonesia’s import activities have decreased.

Regarding the Integrated Industrial Estate in Batang, Central Java, Jokowi assessed that his success was truly extraordinary. The reason is that a large number of job opportunities have been created, where it is able to improve the welfare of the entire community there. In the future, 10 companies will be established, such as electric car battery manufacturers, medical devices and pipes, including the largest glass factory in Southeast Asia.

Data shows that during the second quarter of 2022, foreign investment in Indonesia reached 54 percent of the total investment, or around Rp. 163.2 trillion. Meanwhile, domestic investment alone is worth Rp 139 trillion or 46% of the total investment. From this figure, it is very clear that the investment portion is mostly owned by foreign investors, which means that their level of trust in Indonesia is also very high.

The Minister of Investment/Head of BKPM, Bahlil Lahadalia, emphasized that in the era of President Jokowi’s leadership, there was an increase in the confidence of foreign investors to invest in Indonesia. Even in the midst of uncertain global conditions, Indonesia continues to be trusted as an investment destination.

Another reason stated by Bahlil about why foreign investors can be very confident to invest in Indonesia is because of the resilience of the national economic condition, including the issue of investment licensing in the country which is increasingly being facilitated by the government.

The Ministry of Investment/Investment Coordinating Agency (BKPM) published data on investment realization during the April-June (Quarter II) 2022 period which reached IDR 302.2 trillion, an increase of 7 percent compared to the previous period. Cumulatively, investment realization data for the period January-June 2022 (Semester I) reached IDR 584.6 trillion, an increase of 32 percent compared to the same period in 2021.

Indonesia is still highly trusted by foreign investors who will invest their capital and make the country one of the most promising investment destinations, even though the world economy is full of uncertainty. Many factors determine, one of which is their belief in socio-political stability in the country, including the ease of all business licenses and investment permits.

)* The author is a contributor to the Nusantara Reading Room

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