G20 Presidency Proves Indonesia Conducive for Investment
By: Dian Ahadi )*
Indonesia officially holds the presidency of the Group of Twenty (G20). The election of Indonesia as the G20 Presidency shows the magnitude of international trust as well as evidence that Indonesia is conducive to investment.
It should be noted that Indonesia is the first developing country to become the president of the G20 meeting, which are the countries with the largest economic power in the world. Therefore, Indonesia will continue to focus on raising issues that represent national needs, developing and developed countries and poor countries.
The G20 has a very strategic role in formulating various global issues related to growth and the economy as well as economic and financial stability. Because its membership consists of a combination of developed and developing countries which constitute 66 percent of the world’s population. Therefore, the election of Indonesia as the G20 Presidency will have a very positive effect on national economic growth.
Previously, the Coordinating Minister for Economic Affairs Airlangga Hartarto said the government would continue to encourage ease of investment in Indonesia by improving the ease of doing business system. Airlangga believes that increasing confidence in cross-border growth can be used as a momentum to increase optimism and awareness regarding the reforms that have been carried out by the Government of Indonesia to support ease of doing business.
The government will also continue to encourage promotions related to the ease of investing in Indonesia by prioritizing the issue of investment and sustainable development. On the other hand, digitalization will also have an important role in investment by prioritizing the competitive advantage of investment opportunities in the country.
A survey conducted by Standard Chartered of more than 1,000 chief Financial Officers (CFOs) and senior financial professionals in companies with turnovers above USD 500 million. The study reveals, despite the uncertainty caused by the global pandemic and the economic impact associated with the pandemic, overseas markets remain the main key to growth. The study also reveals greater attention to investment in digital technology, use of retained funds and increased focus on environmental, social and governance (ESG) issues in relation to trade and supply chains.
The survey, of course, reveals that as many as 35 percent of corporations as a whole and 43 percent of corporations in the US indicate that regulatory requirements are still the number one concern among respondents who want to expand to Indonesia, even though leaders are aware of the existence of the Job Creation Law which promises business certainty.
Indonesia’s opportunity to hold the G20 Summit in Bali can of course be a moment for Indonesia to introduce natural resources and the ability to accept investors to increase economic growth and infrastructure development.
In addition, Indonesia has several times updated the regulations governing investment in order to ensure that investment in Indonesia can run according to the applicable principles and objectives.
The purpose of investment is to increase national economic growth, one of which is job creation and promoting sustainable economic development. Indonesia itself targets to be able to attract investment of Rp 200 trillion – Rp 250 trillion through the holding of the G20 Summit in November 2022.
Until now, the government continues to develop detailed plans and targets regarding the withdrawal of investment through the event. Investment Minister Bahlil Lahadalia said the focus of investment being pursued by Indonesia was those who wanted to do downstreaming in the country. Some of the sectors that will be focused on are tourism, plantations, coal and nickel.
He also said that only Indonesia had built an integrated battery cell industry in the world. Bahlil believes that the electric vehicle industry is capable of pursuing investment targets that are environmentally friendly and fair. Bahli added that the investment target in 2022 will reach Rp. 1,200 trillion, an increase of 33.33% compared to last year’s target.
Total Investment in 2021 has increased 9.0% compared to the previous year, this of course shows that Indonesia has potential as a country with a favorite investment destination for investors. The moment of the G20 Summit can of course be a medium of introduction to the delegates present that Indonesia is a country that is conducive to investment.
)* The author is a contributor to Pertiwi Institute