Indonesia plans to woo companies from Japan to Europe as political turmoil in Thailand and rising wages in Malaysia boost the attractiveness of Southeast Asia’s biggest economy.
The Indonesia Investment Coordinating Board plans to visit Japan, South Korea, China, the US and Europe to promote industrial zones in central and east Java, Chairman Mahendra Siregar said Feb. 28.
Japanese companies, the biggest direct investors in Indonesia, are turning to the country as protests in Thailand raise risks in that nation, according to the Japan External Trade Organization.
The perception that Indonesia is now politically less risky and cheaper than some neighbors is adding to the allure of the world’s fourth-most-populous nation, even as investment growth is set to cool before elections this year.
The nation has overtaken China and India as the most promising country for Japanese companies for business development, according to a Japan Bank for International Cooperation survey.
“Indonesia’s appeal includes a sizable labor force and consumer market,” said Wellian Wiranto, an economist at Oversea-Chinese Banking who has worked at Singapore’s central bank and the International Monetary Fund.
“Indonesia has its own share of political uncertainties ahead of elections, but they must look negligible compared to the drama playing out in the streets of Bangkok.”
Thai Protests At least 23 people have been killed since protests against Thai Prime Minister Yingluck Shinawatra’s government began in late October, according to government data.
Labor costs are another advantage for Indonesia. Medan, the country’s fourth-largest city, will benefit from the introduction of minimum wages in Malaysia last year as it offers a cheaper workforce and is less than an hour’s flight from Kuala Lumpur, said Kenichi Tomiyoshi, president director at the Jakarta office of Japan External Trade Organization, or Jetro.
Batam and Bintan in the Riau archipelago also will benefit from their proximity to Singapore, he said in a Feb. 26 interview.
http://www.thejakartaglobe.com/business ... rs-rivals/