European Union Eager to Increase Foreign Direct Investment in Indonesia
Colin Crooks, Deputy Head of the European Union delegation to Indonesia, Brunei Darussalam and ASEAN, said that Europe's businesses are eager to invest in Indonesia. However, the European Union (EU) hopes that several issues that are blocking the Indonesian economy (particularly related to trade and investments) from growing further are dealt with. Crooks pointed at EuroCham's position papers, which discuss bottlenecks to Indonesia's investment climate and provides recommendations for its improvement.
EuroCham, which promotes European business interests and represents European member companies in Indonesia, produces position papers that address issues identified by the member companies as obstacles to operations and expansion within their respective industries, as well as market entry and market access for companies not yet active in the Indonesian market. The papers provide recommendations to the Indonesian government for improvement of the business environment both on general issues, as well as industry specific problems. They also serve to keep the European Commission, as well as the governments of individual European Union member states, informed about Indonesia's business environment.
Crooks stated that European businesses suggest five recommendations that should foster durable economic growth in Indonesia and smoothen investments:
• Infrastructure; the current lack of quality and quantity of Indonesia's infrastructure results in significantly higher logistics and operating costs. Disturbances in electricity supplies are also a major problem for businesses in Indonesia.
• Human resources; stimulate higher-quality human resources and open access to skilled labor to push technological and expert knowledge.
• Regulatory framework; improve coordination among ministries to simplify the regulatory framework and improve Indonesia's business and investment climate.
• Transparancy; involve and consult all stakeholders in the policy-making process to improve transparency, assure investors, and avoid adverse impacts.
• Indonesian National Standard (SNI); align the SNI with other international standards and expedite the current processes to avoid price increases due to higher costs.
Currently, the European Union is Indonesia's fourth largest trade partner and the third-largest source of foreign direct investment (FDI). The value of EU investments in Indonesia is estimated at USD $2.41 billion in 2013. These investments created job opportunities for 1.1 million Indonesians in the country's value-added industries such as infrastructure, manufacturing, pharmacy and banking.
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