Foreign Investment in Indonesia

On an international scale, Indonesia has one of the biggest gaps between investment potential and actual potential realisation. Preceding the Asian Financial Crisis of 1997/8, there was extensive foreign investment in Indonesia particularly from the likes of India, Japan and the United Kingdom, and the GDP growth rate was at an extremely healthy 10% per annum, but subsequent to 1998, Indonesia was by far the worst affected of the Asian region economies with their GDP contracting by 13.7%. The Indonesian Rupiah (IDR) has since stabilised, along with the GDP, which is currently growing at a rate of 6%.
 

Indonesia has the world’s third largest reserve of natural resources, and they include; palm oil, crude oil, tin, copper, gold and natural gases. Indonesia’s level of imports are higher than average in the following sectors; machinery and equipment, fuels, chemicals and foodstuffs. Indonesia’s failure to fulfil their potential in terms of economic growth and foreign investment is linked to a plethora of different issues that are slowly but surely becoming less of a barrier, and in stead becoming and easily attainable hindrance.

In Indonesia, foreign investment opportunities are plentiful plus the ever-present obstacle of corruption is becoming less of a problem due to the introduction of certain legislative measures. When there is enormous potential for diversified business ventures within a country, the issues holding back enterprise cannot be sustained. Sooner or later, Indonesia’s economic and foreign investment potential will be realised.

Numerous financial media outlets in the western world have publicised the distinct aspects preventing potential investors from utilizing an emerging market such as Indonesia but in reality the preventative factors may not be such a deterrent. GMS Global Management Services offer a range of foreign investment products to suit any investors who are interested in profiting from an emerging market such as Indonesia. Financial products and independent financial advise is what we specialise in and for no obligation meeting with one of our financial advisors click here.

During the global financial crisis between 2008/9, Indonesia emerged relatively unscathed as their GDP growth figures were within a 4 – 6% range which is of course a huge positive and it shows that there is no direct correlation between the economic growth in the western world and that of the Indonesian economy.

The IDX capital inflow has increased tenfold, in recent years, which is a major contributing factor in the performance of Indonesia equity market and at GMS Global Management Services they have an Indonesia fund that incorporates some of the best performers. Equities in Indonesia were breaking records throughout 2010 and have continued in a positive vain through 2011. There are not many markets that are currently trading at a higher level than they were before the 2008 market crash, which is a good indicator of things to come.

By Eggay