Indonesia’s FDI troubles

Largest ASEAN economy claims economic prowess but foreign investors remain unconvinced

When Indonesia’s Investment Coordinating Board (BKPM) rejected some 6,541 foreign investment permits last month, it underscored a problem Indonesia has been facing for a couple of years. Investors are looking at the country. They are scouting deals. They are searching for opportunities. They are not always investing, though.

Last year Indonesia attracted around US$24 billion in foreign investment but that is about a quarter of the total investment that China attracts and less than half of what Brazil receives, reports MNI’s Asia Insight. For the country to maintain levels of economic growth of close to 6% per year, it will need a lot more investment.

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Asian cities need sustainability

Environment, productivity and work hours are all big issues

Asia is home to some of the largest urban centres in the world.

Jakarta, in Indonesia, is home to some 25 million people. Manila is huge. Tokyo and Seoul are both large. Smaller Hong Kong and Singapore are large by any standard. High urbanisation rates are making these cities even larger, but not necessarily more sustainable.

As Cornelia Zou reports in China Daily Asia Pacific last week the challenges are quite significant, but so are the opportunities for Asian cities to start taking issues of sustainability seriously and make significant leapfrogs in terms of the environments, quality of life, education, even work hours and governance.

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Cheap oil helps Indonesia

Lower subsidies cut government costs and could help build infrastructure

Cheap oil has helped Indonesia eliminate punishing subsidies and while the move is likely to bump inflation up, it will also free up a about US$21 billion that the government can now spend on infrastructure or social programs.

All this is good news for the economy, which is still making a comeback from a mini-crisis in 2013. Growth this year is expected to be in the 5.5% range, around the same level as Malaysia. Inflation could average out to 4%.

Speaking during the Asian Financial Forum in Hong Kong, the deputy governor of Bank Indonesia Perry Warjiyo said the country’s central bank is more likely than not to keep its policy rate steady at 7.75%. As this piece in Asia Insight, a Market News International publication, points out things are looking good for the largest economy in Southeast Asia.

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Asia set to cash in on blockbuster movie business

No other place on earth can  compete China for enthusiasm for Hollywood movies. Proof is in how much audiences will pay out of pocket to go to the theatre to see blockbusters like Transformers or in how much super-rich investors are willing to shell out to get into the game of producing them. 

In just 11 days, Transformers: Age of Extinction earned US$212 million in Mainland China, 10 times more than the US$21 million the movie earned in South Korea and far, far higher than the US$6 million earned in Malaysia or the US$4 million it earned in Hong Kong, Singapore or Thailand.

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