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[News] Foreign Investment Is Actually Good For Indonesia
Posted at: 21 November 2018

The government's plan to open more sectors to foreign investors by revising the 2016 Negative Investment List (DNI) is indeed a bold measure in the run-up to the presidential and legislative elections next April, since electoral campaigns tend to raise the ugly head of inordinately strong nationalistic sentiment. Foreign investment is actually good for Indonesia.

Indonesia need more foreign investment in several sectors, notably in higher learning institutions, transportation and logistics services and various segments of higher added value manufacturing industries, such as rubber processing, to expand our export capacity.

It is simply a coincidence that China observes this year the 40th anniversary of its reform and opening-up policy, which within 30 years has transformed the country into the world's second-largest economic powerhouse.

The strongest driver of China's rapid growth was its bold decision in 1978 to open up its economy through special economic zones, which attracted a huge wave of FDI because the rules and regulations in these zones became more flexible and liberal than the rest of the mainland.

Chinese experiences, which have been validated by many international researches, have shown that joint ventures with companies from advanced countries, under proper regulatory arrangements by the host government, have transferred technology, expertise and good corporate governance practices to indigenous firms.

In fact, most Indonesian businesses have become high-growth companies by banking their capability in internalising FDI spillovers - through both linkages and demonstration channels. Foreign investment is actually good for Indonesia.

(source: The Jakarta Post/The Strait Times)