Foreigners May Reconsider Investment in RI as KPK Weakened: Indef

TEMPO.CO, Jakarta - The Institute for Development of Economics and Finance (Indef) executive director Tauhid Ahmad opined investors, especially foreigners, might think over to invest their money in Indonesia (RI) should President Joko “Jokowi” Widodo does not show his will to combat corruption.

“If there is no guarantee from the government that corruption will be eradicated, they will reconsider the investment in Indonesia, especially the foreign direct investment,” said Tauhid at Le Meridien Hotel, Wednesday, October 2.

Tauhid reiterated that corruption practices might raise investment costs and risk. As a result, investors would be reluctant to penetrate to Indonesia. “So the government must show their efforts that strengthen the KPK (Corruption Eradication Commission), rather than hinder it.”

He believed that the corruption issue has far more impact on the economy compared to that of public protests in several regions. This because the impact of demonstrations was relatively low on the country's FDI.

"There were only common sentiments over the stock market that used to influence the outflows and inflows of the capital yesterday. The most fundamental one is the investor's perception of the government," said Tauhid.

President Jokowi declared last Thursday that he is mulling to issue a regulation in lieu of law or Perpu on KPK to restore the implementation of Law No. 20/2002 on the anti-graft body. However, coalition parties rejected the idea. NasDem Party Chair Surya Paloh even stated that the President and the coalition agreed that the Perpu is unnecessary.

CAESAR AKBAR | AHMAD FAIZ