INDONESIA is fast becoming a favourite of foreign investors with the country receiving an all-time record high of US$29.3 billion in new foreign direct investment (FDI) in nearly 22,000 projects last year, a significant increase over the previous year.
More importantly, the trend remains strong with Indonesia getting a further US$14.18 billion worth of new investments in over 23,000 projects in the first semester of this year, according to the latest data available.
Singapore continues to be Indonesia’s top foreign investor, having poured US$9.19 billion into nearly 5,000 projects last year. The city-state has been the largest FDI contributor to Indonesia for the past five consecutive years, says Indonesia’s Ambassador to Singapore Ngurah Swajaya in an interview with The Business Times on the occasion of his country’s 74th Independence Day on Aug 20.
Singapore businesses continue to be optimistic about prospects in Indonesia. In the first semester of this year, Singapore ploughed in a further US$3.4 billion worth of new investments in 5,348 projects in Indonesia.
Japan is Indonesia’s second largest foreign investor, having put in US$4.95 billion in 3,166 projects last year, says the Indonesian envoy. China and Hong Kong were in third and fourth places, respectively, with a combined investment of US$4.39 billion in 2,634 projects.
Mr Ngurah cites a recent report by McKinsey, the global management consultancy, which projects that Indonesia is on the way to becoming the seventh largest economy in the world in 2030 with 135 million middle-class consumers with capacity to spend. For the Indonesian economy to reach that level, the country would need some 113 million skilled workers.
“There is a market opportunity worth US$1.8 trillion in consumer services, education, health, agriculture, fisheries, natural resources and the digital economy in Indonesia. I would say that every investor knows that to capitalise on such huge opportunities, they must move in quickly to get the maximum benefits,” says Mr Ngurah.
