More US firms to open in Indonesia

24 April, 2013

The United States renewed its commitment to being a loyal partner of Indonesia as a number of American businesspeople pledged to expand business and invest more in the country.




As a demonstration of its commitment, a trade delegation consisting of 26 business leaders from more than 20 US companies is visiting Jakarta. During the visit, the delegates will meet Indonesian government officials and business representatives to discuss business potential in the country.

At a press conference on Wednesday, US Ambassador Scot Marciel said several US companies would open new businesses in Indonesia.

“Some US companies will open their business here. Some others that have been here are planning to expand their business. Meanwhile, some others are still reviewing the possibilities,” he added.

Marciel did not reveal the companies that will open new businesses in the country but he confirmed that General Motors would soon open a factory in Indonesia. During the three-day visit, the delegates were also joined by the Singapore branch of the American Chamber of Commerce (AmCham) which was led by US Ambassador to Singapore David Adelman.

According to AmCham Singapore board of governors member, Elizabeth Hernandez, who is also Hewlett Packard’s vice president, Indonesia is a unique market with gross domestic product growth of over 6 percent and a market potential of 250 million people.

However, despite its bright prospects, Indonesia still has some work to do to improve the investment climate, said Hernandez. Adelman meanwhile said most companies looked for certainty as well as transparency before they decided to invest.

Hernandez added that some business sectors required specific qualifications that needed to be met, such as people skills and adequate infrastructure. She also explained that there were still some regulations that hindered investment and were hard to resolve. “However, I believe that the opportunities outweigh the challenges,” she said. The trade mission met with the chairman of the Investment Coordinating Board (BKPM) M. Chatib Basri, who later promised to facilitate the flow of US investment.

The board said it was reviewing the possibility of creating a better investment climate in the country, and added that there were windows for investment given the size of the country’s young demographic.

According to figures from BKPM, total foreign investment in Indonesia last year hit Rp 313.2 trillion (US$32.26 billion), 24.6 percent up on the previous year. The US ranked fourth with total investment of $1.2 billion, down from third position in 2011 with investment of $1.5 billion.

The delegation met with representatives of the Finance Ministry, Trade Ministry, State-owned Enterprises Ministry, Education ministry and Health Ministry. They also met with the Indonesian Chamber of Commerce and Trade (Kadin) and the Indonesian Employers Association (Apindo).

 

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