U.S.-Indonesia Investment Report Examines Challenges to Greater Trade and Investment

Monday, October 26, 2015 - 8:30am

WASHINGTON, D.C.—The Indonesian business environment would benefit from allowing greater foreign involvement in numerous sectors, eliminating currency controls and lifting restrictions on expatriate employment, according to a study released today by the U.S. Chamber of Commerce and the American Chamber of Commerce in Indonesia.

Taking Stock: U.S.-Indonesia Investment” includes a series of recommendations to attract higher levels of investment to Indonesia in an effort to improve the country’s economic growth prospects. The report, prepared by Indonesia's Paramadina Public Policy Institute, draws on interviews with dozens of executives, as well as independent research.

The report noted that many of its recommendations are in line with an ongoing “deregulation package” launched recently by President Joko Widodo. The report was released to coincide with President Joko’s October 25-27 visit to Washington, D.C.

"Indonesia's potential is vast, but the business environment can improve and needs to spur innovation, investment and job growth," said Myron Brilliant, Executive Vice President and Head of International Affairs for the U.S. Chamber of Commerce. "In this report, we are putting forth recommendations that are specific, actionable, and, if implemented, will promote greater trade and investment between Indonesia and the United States."

The report notes that Indonesia's overall regulatory system appears at times to be fragmented and uncoordinated and that economic nationalist policies have harmed investor sentiment. It therefore calls for a holistic approach, whereby the government strengthens institutional arrangements to promote coordination and further reform with an eye on the investment climate. This approach will require support at the highest levels to overcome bureaucratic resistance and to help eliminate conflicts of interest that can undermine policy and harm the national interest.

“We have had great cooperation from policymakers in discussing these issues and we think the political will is there from President Joko to make the needed changes,” said AmCham Indonesia Managing Director A. Lin Neumann, who edited the report. “The time has come for bold action.”

The report also makes sector-specific recommendations to spur growth in a number of promising industries in Indonesia, including agribusiness, consumer goods, creative economy, extractive industries, information technology, insurance, and oil & gas. 

"Taking Stock" is the third in an annual series of policy white papers prepared by the U.S. Chamber of Commerce and the American Chamber of Commerce in Indonesia. The full report can be read here.   

About the U.S. Chamber of Commerce

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. Its International Affairs division includes more than 50 regional and policy experts and 25 country- and region-specific business councils and initiatives. The U.S. Chamber also works closely with 116 American Chambers of Commerce abroad.

About AmCham Indonesia

The American Chamber of Commerce in Singapore is a voluntary organization of professionals with commercial activities in Indonesia. Its central mission is to promote US-Indonesia commercial relations and to serve its members as a key resource for information and business networking. First formed in 1971 as a committee, AmCham Indonesia has grown to hundreds of members representing more than 250 companies.