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Invest early in Indonesia: Jokowi to businesses

SINGAPORE — Indonesian President Joko Widodo, on his first official visit to Singapore, has called on businesses here to invest in his country as it undergoes a political and economic transformation, saying that those who venture in early will reap great profit.

Indonesia President Joko Widodo at Singapore-Indonesia Business Dialogue. Photo: Robin Choo/TODAY

Indonesia President Joko Widodo at Singapore-Indonesia Business Dialogue. Photo: Robin Choo/TODAY

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SINGAPORE — Indonesian President Joko Widodo, on his first official visit to Singapore, has called on businesses here to invest in his country as it undergoes a political and economic transformation, saying that those who venture in early will reap great profit.

“People tell me, Jokowi, we have heard all of this before. What is different this time? The difference is, this time we are actually doing it,” he told over 150 Singapore business leaders gathered at the Singapore-Indonesia Business Dialogue at the Shangri-La hotel today (July 28).

Declaring that the Indonesian economy will double in the next 20 years, he stressed his determination in making reforms in infrastructure development, education and healthcare happen. He listed infrastructure projects that have already been launched, such as the expansion of ports, as well as several healthcare and education initiatives.

He acknowledged the rocky near-term outlook but pointed out the opportunities amid the uncertainty. Indonesia targets a 7 per cent gross domestic product growth rate by 2018. But in the first quarter, the Indonesian economy grew 4.7 per cent from the year-ago period, slowing from the 5 per cent expansion in the previous quarter to mark the weakest pace of growth since the global financial crisis six years ago.

“Today, we are once again confronting challenging times in Indonesia. We are in cyclical downturn. We have just had a major transfer of power. The world looks full of uncertainty and risk. What does it mean? It means that today is the best time to invest. We only have to look to history to prove that those who come early will be the ones who will reap great profit,” he said.

He acknowledged shortcomings in the Indonesian business environment, such as corruption, but said the government is addressing these issues.

“Yes, it is true we still have a lot of work to do in Indonesia. The internal environment must be business friendly and licensing we must simplify. Corruption we must fight,” he said.

However, he urged the business leaders: “Don’t wait until it’s all done. Invest early.”

Mr Widodo and Prime Minister Lee Hsien Loong today witnessed the signing of three agreements between Singapore and Indonesia. These included two Memoranda of Understanding on electronic government cooperation as well as youth and sports cooperation.

The other agreement aims to improve economic cooperation between the apex business chambers in the two countries — the Indonesia Chamber of Commerce and Industry, or KADIN, and the Singapore Business Federation.

The agreement will foster closer relationships between small and medium enterprises in Singapore and Indonesia; enhance collaboration in business sectors such as infrastructure, manufacturing and logistics; promote good and sustainable agricultural practices in line with international guidelines and standards; foster exchange of information about economic developments and good trade association management practices; and establish feedback channels on challenges affecting the flow of trade and investment between the two countries.

Mr S Iswaran, Singapore’s Second Minister for Trade and Industry, who also spoke at the dialogue, noted that Singapore is Indonesia’s fourth largest trading partner with total bilateral trade amounting to S$72.4 billion last year. Singapore was also Indonesia’s top foreign investor last year with total investments at US$5.8 billion (S$7.9 billion), a 25 per cent jump from 2013.

“Indonesia’s economy has performed well over the past decade. Macroeconomic conditions have generally improved – inflation has fallen from double to single digits, and government debt as a share of GDP is now lower than the majority of advanced economies. However, like the Singapore economy, Indonesia’s economy is facing some headwinds,” he said.

Mr Iswaran said that Mr Widodo and his administration have taken concrete steps to strengthen the economy, such as trimming fuel subsidies and streamlining business permit processes, and are committed to improving governance.

“This, coupled with Indonesia’s strong economic fundamentals – the size of its economy, growing urbanization and middle class, as well as its demographic dividend – will position the country for stronger growth over the long term,” he said.

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