Developing Indonesia’s Big Picture
Six ministers attend fifth annual US-Indonesia Investment Summit
By Paul Goddard
Wednesday, November 8, 2017
The fifth annual event, held on November 2 at the Mandarin Oriental Hotel, Jakarta, saw a very special ministerial panel discussion between Thomas Lembong, the Chairman of the Indonesia Investment Coordinating Board (BKPM); Bambang Brodjonegoro, State Minister for National Development Planning (BAPPENAS); and Airlangga Hartarto, Minister of Industry on the subject of Thinking Ahead: Taking Indonesia to the Next Level.
Rudiantara, Minister of Communications and Information Technology; Ignasius Jonan, Minister of Energy and Mineral Resources; Mari Elka Pangestu, former trade minister and tourism and creative economy minister were also featured speakers; Luhut Pandjaitan, Coordinating Minister for Maritime Affairs gave the closing keynote speech.
“This is an important event and the culmination each year of an ongoing initiative throughout the year that includes continued dialogue between US companies and the government of Indonesia and the Indonesian private sector, including corporate delegations visiting from the US,” said AmCham Indonesia President Brian Arnold in his opening remarks.
The summit saw the launch of the 2017 Investment Report, The Big Picture: Indonesia’s Partnership with US Investors, which was the result of conversations with key policymakers, business leaders and top analysts to try to determine what the big picture for Indonesia is, how the government plans to achieve it, and the challenges standing in its way. AmCham also unveiled a special video presentation made for the occasion.
In his opening address, Joseph R Donovan, US Ambassador to Indonesia, spoke of a free and open Indo-Pacific region, underscoring the important role the region plays in advancing US economic prosperity. This, he said, is the context of the US-Indonesia strategic partnership.
“In our economic partnership, we strive for a predictable, open, and transparent economic policy framework, one that promotes fair competition and the protection of intellectual property rights, to facilitate freer, fairer, and more balanced two-way trade and investment and to promote private sector-led economic growth.”
“I always say it is better to be lucky than smart,” he said. “We are lucky right now as the world economy is the best it has been in 10 years. But bad times lead to good policy and good times lead to bad policy. We must beware of complacency and carelessness in policy.”
Other featured guest speakers were John Goyer, Senior Director of Southeast Asia, the UD Chamber of Commerce; Rosan Roeslani, Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) and Hariyadi Sukamdani, Chairman of the Indonesian Employer’s Association (APINDO).
The ministerial panel saw a lively discussion between three members of President Widodo’s cabinet, all agreeing that while much progress had been made smoothing the way for foreign direct investment (FDI) there is still much to be done.
Bambang spoke of the need for “structural reform” and “growth with innovation;” he set a goal for Indonesia of 30 percent of GDP contributed by the manufacturing sector by 2024, up from about 22 percent now.
Airlangga said manufacturing production needed to improve, embracing the use of technology and innovation, noting that the “Internet of Things has become the Internet of everything.”
Lembong welcomed the news that Indonesia had moved up in the World Bank’s Ease of Doing Business Index 2018, ranking 72 from 91, but he said that there was “no magic bullet” to make problems go away. Instead, he said, greater cabinet planning and coordination was needed, and he praised President Widodo’s ability to “focus on the practical details.”
A broad spectrum of stakeholders took part in the day’s panel discussions, including representatives from the health ministry, KADIN, BKPM, Apindo and the Creative Economy Body. IBM, Mastercard, ExxonMobil, HM Sampoerna, Google, 21st Century Fox, Chevron and Caterpillar, to name but a few, represented US businesses in Indonesia.
“It was a great day,” said AmCham Managing Director A. Lin Neumann, “giving us a chance to touch base with the government, hold productive talks and set the agenda for further advocacy in the year ahead.”
The subjects discussed ranged from new ways forward in health, investing for growth, legal certainty and the rule of law, the spirit of the creative economy and new paths to power and energy.
A candid but constructive day of discussion and debate focusing on the successes and problems facing both the Indonesian economy and US investment was concluded by the closing keynote speech by Luhut Pandjaitan.
“The relationship between US investment and Indonesia is very important,” he said. “Some people say that China is the biggest [investor in Indonesia], which it is not, the biggest are Singapore, the US and Japan.
“Our economy is doing very well – investment grade – inflation is also down, ease of doing business has improved, so don’t hesitate to invest in Indonesia.”
Throughout the day, the ministers also held candid, off the record discussions with US companies.
The summit began with a gala kickoff dinner the evening before with special guests from the Indonesian House of Representatives and entertainment provided by the Disney company.