Economist: KPK-Polri Clash Will Drive Away Investors

TEMPO.CO, Jakarta - An economist from Mataram University, Dr. M. Firmansyah, said that the conflict between the Corruption Eradication Commission (KPK) and the National Police (Polri) may deal a negative impact on the growth of investment in Indonesia, as investors may interpret it as the Government's lack of commitment on eradicating corruption in Indonesia.

"Although the relationship between the institutional clash and its' resultant effect on the national economy has yet to become apparent, foreign investors may understand this as the absence of a fair and independent judiciary in Indonesia - this will scare away potential investors," said Firmansyah in Mataram, West Nusa Tenggara on Monday, January 26, 2015.

According to Firmansyah, President Joko "Jokowi" Widodo needs to be firm in ensuring that he is able to deliver his campaign promise of advancing eradicating corruption under his tenure.

Firmansyah also added that investors will shy away from Indonesia as corruption significantly raises the cost of doing business. "Transactional costs soar when corruption is added into the equation - thus reducing Indonesia's competitive advantage, especially in the upcoming establishment of the Association of South East Asian Nations (ASEAN) Economic Community," he said.

ANTARANEWS