Corporate Investment In Indonesia? You Bet!


There is little doubt that Indonesia is the most populous nation in southeast Asia, with some 251 million people. There is also not much doubt that the country has an ancient regulatory system, inadequately structured for conducting “big league” 21st-century business. The place is riddled by corruption. So why is much of the industrial world, including the United States, China and Europe, thirsting to invest in new factories and more in Indonesia like never before?

Just a short time back, the Indonesian government reported that investment jumped some 27 percent to a record 65.5 rupas or almost $7 billion. Part of the reason is that Indonesia was practically untouched by the 2008 financial crisis. Secondly, it is a nation of huge natural resources including mining, oil and natural gas. And the “kicker” goes back to the booming population now increasingly hungry for consumer goods. Plus, the labor force is young and most eager to expand its financial horizons.

The current “consumer boom” leads one statistical guru to predict that “affluent consumers” in Indonesia will double to 141 million by 2020. That number is more than the entire population of Thailand.

Let’s face it: General Motors didn’t just invest $150 million into new projects in the country on a whim.

And the Indonesian government is now pushing to modernize its processes of doing business. The Indonesian Investment Coordinating Board is cutting in half the number of documents that foreign countries need to apply for a business license. It is also now investing heavily in today’s most modern technology to keep shredding red tape distractions. And if you listen to M. Chatib Basri, whose main job is attracting new foreign businesses, you might become a convert, too: “Indonesia is the least unattractive country in the world. Even though it has to deal with the problems of bureaucracy and infrastructure, the returns are higher than if you invest in Europe and the U.S. now.” Hmm…