Children wait to receive China’s Sinovac COVID-19 vaccine in South Tangerang, Indonesia, on Dec 14, as the nation started vaccination for children aged six to 11 against COVID-19. (AGUNG KUNCAHYA B. / XINHUA)
An expected post-pandemic recovery in Indonesia can offer vast opportunities to investors keen on tapping the potential of Southeast Asia’s biggest economy, the country’s economic planners said.
Indonesia’s economy is slowly recovering from a pandemic-induced 2.1 percent contraction in 2020, with its GDP rebounding by 3.51 percent in the third quarter of this year. Bank Indonesia, the country’s central bank, forecast this year’s GDP to expand by 3.2 to 4 percent.
During a seminar on “Capturing Indonesia’s Investment Opportunities in the New Normal Era”, Indonesia’s Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan said infections from the novel coronavirus peaked in mid-July, and that the country has since seen a sharp decline in the number of infections and fatalities.
“The status of Indonesia right now is so much better than before,” Pandjaitan said in a keynote speech delivered via video from Jakarta.
The seminar, a hybrid event held both online and offline on Dec 13, was organized by the Indonesian Consulate General in Hong Kong. Over 100 people, including members of the Indonesia Chamber of Commerce in Hong Kong, attended in person at The Ritz-Carlton Hong Kong.
Pandjaitan has been in charge of handling the pandemic in Java — Indonesia’s biggest island where the capital Jakarta is located — and the resort island of Bali. The two islands are home to more than half of the country’s population of 270 million.
He said that between Dec 6 and 12, only three deaths were recorded in Jakarta, while the number of new daily cases ranged from 26 to 41. In Bali, the highest count for daily infections was 13, with three deaths.
Total number of cases in Indonesia reached 4.26 million as of Dec 14, according to the World Health Organization. The nation’s COVID death toll stands at just under 144,000.
Pandjaitan told the forum that the country is ramping up its vaccination rate. More than 50 percent of the population had been fully vaccinated as of Dec 15, official data show.
The government has also started inoculating children aged 6 to 11 amid concerns over the Omicron variant. The vaccination program, which will cover 26 million children, started on Dec 14.
Indra Darmawan, senior economic adviser to the Indonesian Minister of Investment and chairman of the Indonesia Investment Coordinating Board, or BKPM, told the participants in the seminar that the country’s GDP is expected to rise by 4.5 to 5.5 percent in 2022.
Darmawan, who presented his report via video, said the country is enjoying a rising number of investments this year, from both foreign and local sources. He added that these investments are not concentrated in Java but are distributed in other parts of the archipelago.
Data from BKPM show total investment in Indonesia during the nine months to September reached 659.4 trillion rupiah ($459.76 million) — over 70 percent of the target investment of 900 trillion rupiah for this year.
More than 50 percent of Indonesia’s total investment in the first nine months of the year came from foreign investors. Singapore was its top foreign investor, accounting for 32 percent of the total.
Ricky Suhendar, the Indonesian consul-general in Hong Kong, said regulations have been streamlined to improve the investment climate.
“The government of the Republic of Indonesia is fully committed to continuing our agenda of structural reform, deregulation, and de-bureaucratization,” he told the forum.
The Indonesian House of Representatives has ratified a law aimed at boosting investments and creating jobs. The government has also set up a website to simplify business licensing and offer tax incentives to foreign investors.
Sanitiar Burhanuddin, Indonesia’s attorney general, discussed the Omnibus Law, which aimed at giving “legal certainty” to investors in Indonesia. Burhanuddin, who also delivered his speech via video link, said the law will harmonize over 70 “overlapping regulations which (have) hampered the smoothness of investment (inflows) in Indonesia”.
Minister Pandjaitan said tapping investment opportunities in Indonesia is “simple as long as you follow the rule of thumb for investment” in the country, which comprises four parts: investments must be environmentally sustainable; make use of the local labor force; will facilitate transfer of technology and; add value to the country’s economy.
Consul-General Suhendar said that given Indonesia’s commitment to reduce carbon emissions, businesses may want to invest in renewable energy and sustainable transport projects.
Apart from green energy and transportation, businesses might also be keen to tap opportunities in healthcare and digital technology, Suhendar added.
