Jakarta, April 19 (Antara) - German investment in Indonesia has remained miniscule over the past five years, accounting for only US$552 million, about one percent of its total investment overseas.
However, the visit of Indonesian President Joko Widodo (Jokowi) to Berlin on Monday is expected to open new flow of German investment to Indonesia.
During the president's visit to Berlin, German and Indonesian businesses concluded a number of business agreements, including an agreement to invest in the smelter sector, worth US$800 million.
The Indonesian Chamber of Commerce and Industry (Kadin) had earlier predicted that the visit of the President will mark a new phase in German investment coming to Indonesia.
Kadin General Chairman Rosan Perkasa Roeslani revealed that on the first day of the president's visit to Berlin, a business-to-business MoU worth US$875 million was to be signed between Indonesian and German businesses.
Of this amount, an agreement worth US$800 million will be signed between Ferrostahl Cronimet and PT Aneka Tambang; US$40 million pact between Myer Werft and PT Pelni; and US$35 million between APRIL and Inava.
Therefore, the Capital Investment Coordinating Board (BKPM), which is promoting Indonesia's investment potential in Germany, is optimistic about the future of German investment in Indonesia.
BKPM head Franky Sibarani was hopeful that the president's visit would encourage German investors to see Indonesia as their investment destination. "German Chancellor Angela Markel said Indonesia had the potential to serve as a gateway for German investors who can later enter into the ASEAN region," Sibarani stated in a press release here on Tuesday.
He explained that President Jokowi's visit will have a number of positive outcomes when it comes to investment, including the fact that the German government now has a positive view about the potential of Indonesia as an investment destination.
"They have chosen Sulawesi as one of the locations for their investment. Seeing the amount of their investment, they can use BKPM's three hour-service facility," the BKPM head said.
Rosan remarked that the president would witness the signing of the MoUs which will constitute a concrete step in boosting economic relations between Indonesia and Germany.
During his visit to Germany, Jokowi was also accompanied by business executives from the Kadin.
According to Shinta Widjaja Kamdani, Kadin deputy general chairman for international relations, Kadin was responsible for several business delegates operating in sectors such as energy, industry, agribusiness, maritime and telecommunications, coming to Indonesia.
The president also attended a business forum with German chief executive officers (CEOs), which, according to Franky, could increase the confidence of German investors in the Indonesian investment potential.
Some of the CEOs of German companies which had made investments in Indonesia, told Jokowi when they met him that they planned to expand their investment. Apart from the smelter sector, they have also set their sight on other sectors, such as automotives.
President Jokowi's visit has positive results on investment, including positive view of German government to the potential of Indonesia as an investment destination.
During the visit, an agreement was reached with the signing of business cooperation between Indonesia and Germany, including an investment in the construction of smelter in Sulawesi at a value of US$ 800 million.
"We the BKPM will follow up the results of the meeting, particularly the investment plan (old and new plans) so that they will be realized. The BKPM will set up an investment marketing team to facilitate the German investment," Franky said.
In a business forum on Monday, which was attended by 250 German investors and President Jokowi, Franky also promoted Indonesia's investment policy reforms.
He explained in the forum about the facilities the Indonesian government will provide to all those who want to invest in Indonesia. Would-be investors can simply visit the BKPM office to obtain investment services. The services included consultation and business permits and facilities once they realized their investment.
"BKPM serves as 'One Stop Shop' for investment. Investors can simply meet the marketing officers in charge of German affairs to get assistance and services from 22 ministries/state institutions at the one-stop integrated service center (PTSP) where would-be investors could handle various business permits, a three-hour license service and assistance when they are in the process of realizing their investment," the BKPM head said.
Franky also stressed the government's commitment to carrying out investment policy reforms to support the ease of doing business in Indonesia. He explained the revision of Negative Investment List (DNI) for the industrial sector, pharmacy and e-commerce.
The German investment in Indonesia in the 2010-2015 period totaled 547 projects worth US$552 million or Rp5.2 trillion. The projects absorbed 38,382 workers, according to the BKPM data.
The German investment in Indonesia is relatively small when compared with its total investment around the world. FDI Markets Financial Times data showed that it only accounted for one percent of Germany's total investment around the world.
In the meantime, President Jokowi, in the company of several ministers, met the CEOs of German companies to draw more investment to Indonesia. At the business forum, Jokowi convinced German businessmen to invest in Indonesia.
In his speech before the businessmen of the two countries, the President confirmed Indonesia's wishes to boost economic cooperation with Germany.
Despite the challenges of global economy, Indonesia showed resilience, even surprising growth, he said.
Indonesia's GDP growth reached 5.03 percent in the fourth quarter of 2015. The interest to invest in Indonesia is currently at its highest point in history, according to the Asian Development Bank.
The economic stability in Indonesia can be achieved due to the two of the country's economic growth engines, namely infrastructure construction projects and investment, according to President Joko Widodo. These sectors have shown tangible results and breakthroughs.
President Joko Widodo also explained about the government's economic policy, which was partly inspired from the experience of European countries in facing the economic crisis.
The President also asked German entrepreneurs to invest in Indonesia as he was determined to improve the investment climate in Indonesia.
"We will continue to reform. We will continue to simplify the licensing process. I will make the Indonesian economy open," the President said.***3*** (a014/INE)
EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 19-04-2016 20:02:4 |
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