Indonesia Most Favorite for Japanese Investors
13 September 2013 21:02 WIB
TEMPO.CO, Jakarta - Indonesia’s investment rank for Japanese manufacturers has continued to rise. In 2011, Indonesia was ranked fifth on the list of favorite investment targets for Japan. A year later, Indonesia climbed the ladder to the third place, surpassing Vietnam and Thailand.
"It must be acknowledged, Indonesia is still a star for Japanese investors," said Japan Bank for International Cooperation (JBIC) CEO Hiroshi Watanabe at the Finance Ministry on Thursday, September 12, 2013. He projected Indonesia would remain in the third position this year.
The five target nations for Japanese investments respectively are China, India, Indonesia, Thailand and Vietnam. Compared to other developing countries, Watanabe said Indonesia was ranked first as the most favorite investment target.
However, Watanabe said there were five major problems the Japanese faced when investing in the nation. First, the relatively non-competitive business climate. Second, underdeveloped infrastructure compared to other Asia-Pacific nations. Third, the high wages of workers. Fourth, the lack of development in human resources management. Fifth, legal issues.
"Among these five major issues, Indonesia’s infrastructure is considered to be the most serious problem for Japanese investors," Watanabe added.
Watanabe said Japanese investments would climb higher should the Indonesian government be able to contain the problems.
During talks with Deputy Finance Minister Mahendra Siregar, the JBIC CEO focused on financing a number of ongoing and future infrastructure projects.
"JBIC has announced its commitment to financing our infrastructure," said Mahendra.
Mahendra said the Indonesian government had also offered a financing scheme in the form of a public private partnership (PPP) for the infrastructure projects, but the details had yet to be discussed.
He said JBIC had welcomed the financing scheme by forming a working group to discuss it in details. Aside from providing direct financing for infrastructure projects, JBIC has also formed a consortium involving national and regional banks to finance infrastructure projects in the nation.
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