Indonesian authorities have provided assurances to investors that they will be shielded from potential disruptions amid the coronavirus outbreak that has discouraged investment into the country.
Investment Coordinating Board (BKPM) head Bahlil Lahadalia met with the National Police's Criminal Investigation Department (Bareskrim) chief, Insp. Gen. Listryo Sigit Prabowo, on Monday to announce that the department would deploy a team to Batam, Riau Islands, to guard investments in the area.
Bahlil said he would also work with the National Police to safeguard investments, especially in "crucial areas" like Batam.
"We have to be cohesive in building our country and maintaining our economic system. That's why all of the country's institutions, including the police, will help if there are any problems," Bahlil said.
The release further continued, "The BKPM head gives his assurance that investors still trust Indonesia. This is the message we want to convey to the public, especially businesspeople, so that they won't need to worry that the coronavirus is the end of everything."
The message was intended to provide reassurance as investment into Indonesia declines amid the COVID-19 pandemic.
The BPKM boss added that investment from China was expected to decline amid the pandemic, adding that the agency was currently seeking to maximize the potential of domestic investment.
The expected decline in Chinese investment would contrast with last year’s achievement, when foreign direct investment (FDI) from China grew almost twofold to $4.7 billion from $2.4 billion in 2018, according to the BKPM. China was the second-largest foreign investor in Indonesia during that period.
Bahlil told reporters on March 6 that the BKPM had set its sights on alternative sources of FDI, citing Europe and the Middle East.
However, Center of Reform on Economics (Core) Indonesia research director Piter Abdullah argued that replacing Chinese investment with investment from the Middle East and Europe would be a challenge, as investors would need time to adjust to Indonesia’s investment landscape, while other countries offered more competitive advantages or had established closer relations with the two regions.
Instead, Piter advised the government to nurture its existing investors and create opportunities for investors from Japan and South Korea, two of Indonesia's long-time partners. He claimed investors from the two countries were prepared to invest in Indonesia regardless of the outbreak but that Indonesia had made China its “golden child” for FDI.
“Indonesia needs to become more attractive and put itself in a sweet position where the three countries [China, South Korea and Japan] compete and give their best to us,” Piter said.
