With booming economic conditions and growth areas outlined, Indonesia is set to thrive with more room for further investments, especially from Malaysians.
According to the Indonesian Consul General in Kuching, Djoko Harjanto during a seminar entitled ‘Identifying opportunities in the Indonesian market’, Indonesia has seen a stable economy and strong growth even with the ongoing eurozone economic crisis.
In fact, the country was well on its way to become the top 10 largest economies in the world by 2025 with a gross domestic product of US$4.3 trillion and an estimated income of US$14,900 per capita.
“If you look at the numbers, you can see where Indonesia is moving.
“Firstly, during the midst of the global economic crisis, Indonesia grew 4.5 per cent in 2008. In 2009, it grew to 6.1 per cent and also 6.5 per cent in 2011,” he said.
“We have kept inflation low. Also, our debt to gross domestic product (GDP) ratio has shrunk dramatically to 26 per cent in 2010,” he added.
“In fact, the IMF predicts that Indonesia’s economy will be larger than Australia by mid-decade. These numbers are happening and they show that we are on the right track.”
Malaysia will stand to gain from Indonesia’s robust growth as the latter remains a major import source for Malaysia.
To recap, imports from Indonesia constituted some 6.1 per cent of total Malaysian exports back in 2011.
Meanwhile, Harri Santoso from the Investment Coordinating Board of Indonesia outlined that to date, Malaysia remained a key investment figure in Indonesia, garnering US$1.806 billion from 2007 to 2011.
These included investments in sectors such as food crops and plantation sector with US$530 million, construction with US$353 million, food industry with US$231 million, trade and reparation with (US$134 million) and other services estimated at US$96 million.
Other sectors accumulated to US$462 million in investments.
“Perhaps the biggest advantage of Indonesia is its population of 240 million people – being the fourth largest population in the world – offering a large domestic market of which more than 50 per cent live in urban areas,” Santoso highlighted.
“A growing and affluent middle class supports GDP growth and with more than 50 per cent of GDP accounting for private consumption, these statistics fare well for many industries including the retail and consumer products, food processing as well as the automotive industry.” The country’s total domestic and foreign direct investment realisation in 2011 reached US$27.6 billion, an increase of 20.5 per cent from 2010.
In fact, within the first quarter of 2012, Indonesia has seen total domestic and foreign direct investments reaching US$7.8 billion, an uptick of 32.9 per cent to date.
Meanwhile, Santoso outlined several key investment areas in Kalimantan that could benefit Malaysians, in particular Sarawakians due to its locality.
“Right now, Kalimantan will be one of the areas we concentrate for investments.
We have investment attention areas in Kalimantan, which are Pontianak, Ketapang, Sanggau and Mempawah.
“In Pontianak itself, we are looking at investments of US$1 billion mostly for forestry, palm oil, oil and gas and agriculture.
In Ketapang, we are looking at US$1.2 billion for palm oil, bauxite, port and roads (infrastructure).
“The third is Sanggau, at US$500 million, once again for palm oil and bauxite ventures.
For Mempawah, we are looking at US$1 billion investments for oil and gas, and port developments.”