M'sians should consider investing in US$47bil Indon infrastructure sector

The Star 9/7/2010

PETALING JAYA: Malaysian investors should consider Indonesian market as it offers huge potential, including infrastructure projects worth US$47bil that are expected to be rolled out in the next four years.

Indonesian Ambassador to Malaysia Tan Sri Prof Da’i Bachtiar said bilateral trade between Malaysia and Indonesia stood at US$11.5bil last year and was expected to grow by double digits this year.

“Investment from Malaysia in Indonesia was US$1.5bil last year while from Indonesia to Malaysia was US$500mil, which still provide a lot of room to grow,” he said at the Activate Asia: Insight Indonesia Forum yesterday.

The event was co-organised by the Chinese Chamber of Commerce and Industry of Kuala Lumpur and Selangor (KLCCCI) and HSBC Bank.

Tan Sri Prof Da’i Bachtiar ... ‘Indonesia now has a relatively open foreign investment regime.’ Da’i Bachtiar said Malaysia was in eighth position with 23 projects worth US$77.3mil, or 2.1%, of the total foreign direct investment (FDI) in Indonesia in the first quarter. He said the top five investing countries were Japan, Singapore, the United States, the United Kingdom and Australia.

“Indonesia now has a relatively open foreign investment regime and looks to foreign investment to boost its economy. Virtually all sectors allow foreign participation except those of specific national interest.”

He said the government had issued several new regulations to ease the entry of foreign firms and capital into Indonesia.

Chamber president Tan Sri William Cheng said Indonesia was now back on its development track after 10 years of economic reformation post-1997/98 economic crisis.

“With a population of over 230 million and gross domestic product of up to US$515bil, which is driven by its significantly improved domestic consumption, Indonesia has become one of the most attractive markets,” he said.

HSBC Bank Malaysia Bhd executive director Jon Addis said Islamic finance was an area that had great potential in Indonesia as it only contributed 3% of the nation’s total banking assets last year compared with about 20% in Malaysia.

KRA Group CEO Karim Raslan said the large consumption of its people had helped keep Indonesian economy afloat despite the global financial crisis.

He said investors should not just focus on Jakarta as there were a lot of opportunities in places like Palembang, Medan, Pekanbaru and Pontianak.