Invest in Indonesia

Posted on Nov 10, 2014

Indonesian President Tells Business Leaders ‘This Is Your Opportunity’.

In his maiden speech at an annual Pacific Rim economic forum as Indonesia’s new leader, President Joko Widodo pitched Indonesia as a prime investment destination to regional business leaders, pledging to slash fuel subsidies that have crimped the government’s ability to spend on social and infrastructural development.

Describing the $27 billion Jakarta spends annually to hold down fuel prices as “huge,” Mr. Widodo said “we want to channel our fuel subsidy from consumption to productive activity.”

The savings would be used to build much-needed ports, railways and other infrastructure for the sprawling archipelago nation, home to some 250 million people across more than 17,000 islands, and help improve livelihoods for rural residents, the president told the Asia-Pacific Economic Cooperation CEO Summit in Beijing.

“In five years, we want to build 24 seaports and deep seaports,” on the islands of Sumatra, Kalimantan, Java, Sulawesi, Maluku and Papua, Mr. Widodo said. He also outlined plans to expand Indonesia’s railway network and develop mass-transportation networks in six major cities, including Jakarta, Bandung and Surabaya.

Other key infrastructure projects would include power plants, to help develop Indonesia’s manufacturing and industrial sectors. “This is your opportunity,” the president told the audience in halting English, in a refrain he would use repeatedly in his roughly 13-minute speech.

Savings from reduced fuel subsidies would also go toward improving livelihoods for farmers, fishermen and micro and small enterprises in rural Indonesia, giving them access to capital, better equipment and infrastructure, Mr. Widodo said.

“We want to build the dams — 25 dams in five years — from our fuel subsidy, to maintain the water supply to the farming area,” he said. “Some subsidy we want to channel to the fishermen, to give them good engine, to give them refrigerator. We want to increase the income of the fishermen.”

Mr. Widodo’s comments underscore his intention to tackle costly fuel subsidies — a legacy of the more than 30-year rule of former President Suharto and a drain on fiscal resources that the new leader hopes to redirect toward improving infrastructure and social spending. In calling for more investment, he also acknowledged the constraints he faces freeing up the budget for development if the fuel subsidies are not addressed.

“This is your opportunity, because you know our national budget is limited,” he said.

Mr. Widodo sought to reassure his audience about the risks of doing business in Indonesia, recognizing that the country has previously ranked low on ease of doing business surveys. “A lot of investors, when they come to me, almost all of them, they always complain about land acquisition,” he said. “I will push my ministers, my governors, my mayors, to help clearing this problem.”

The president cited his experience in dealing with land disputes during his stint as governor of Jakarta, including some related to the construction of toll roads in the Indonesian capital. He also reminded his audience of his background in business, assuring them that Indonesian authorities would assist foreign investors in securing business permits in a speedy manner.

“I’m very happy to be among with you, because you know I was a businessman [many] years ago,” Mr. Widodo said. “So this morning I am very happy because we can talk about business, about investment with all of you.”

Source: Chun Han Wong / blog.wsj

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Jokowi Tells APEC in Speech: We Are Waiting for You to Invest in Indonesia.

Indonesian President Joko Widodo addressed business leaders at the Asia-Pacific Economic Cooperation CEO summit in Beijing on Monday, where he put out a call for greater investment in the archipelago and promised a friendlier climate for doing business in the country.

The following is his speech:

Excellencies, distinguished guests, ladies and gentlemen and CEOs.

First, on behalf of Indonesian government and the people of Indonesia I would like to thank you for coming to my presentation. Today I am very happy to be among with you because you know I was a businessman years ago. So this morning I am very happy because we can talk about business, about investment with all of you.

This picture shows you our map of Indonesia. We have a population of 240 million and the distance is like from London in the UK to Istanbul in Turkey. And imagine, we have 17,000 islands.

Our national budget in 2015 is $167 billion and the fuel subsidy [allocation] is $27 billion. It’s huge. So we want to channel our fuel subsidy from consumption to productive activities. We want to channel [the money] to farmers for seed, for fertilizers, and also for irrigation. And we want to build dams — 25 dams in five years from our fuel subsidy to maintain the water supply to farming areas.

Some subsidy [funds] we want to channel to fishermen, to give them boat engines [and] refrigerators. We want to increase the income of the fishermen. Some fuel subsidy [funds] we want to [give to] micro and small enterprises in the villages. We want to help them raise working capital. And some subsidy [funds] we want to channel to the health program [and] the education program. And the subsidy [funds] we [also] want to channel to infrastructure.

In five years we want to build 24 seaports and deep seaports. We have 17,000 islands, so we need seaports and deep seaports. And this is your opportunity: 24 seaports and deep seaports.

This picture shows our Jakarta port, Tanjung Priok Port. In 2009, the capacity was 3.6 million TEUs a year. And our plan in 2017 is around 15 million TEUs a year. This is the potential [for] ports in Indonesia. This is your opportunity. We want to build in Sumatra, Kalimantan, Java, Sulawesi, Maluku, also in Papua. And we plan to build our [railway network]. We already [have railway lines] in Java and we want to build in Sumatra, Kalimantan, Sulawesi and Papua. This is your opportunity.

Now we talk about mass transportation. We want to build mass transportation in six big cities in Indonesia. We started in Jakarta last year, and we want to build in Medan, Makassar, Semarang, Bandung [and] Surabaya. So, this is also your opportunity. Because you know our national budget is limited.

Now we [will] talk [about] our maritime agenda. We want to build [a] sea toll. What is [a] sea toll? [A] Sea toll is [a] maritime transportation system to make our transportation costs lower [and] more efficient. We want to build from the west to the east. We hope not only the vessels can enter our sea toll but also mother vessels can enter the sea toll. So the price, the cost of the transportation, [becomes] more efficient.

For example, the price of […] one sack [of] cement in Java is $6 […] But in Papua the price is $150 […] Imagine, 25 times [as much]. So we hope with our sea toll the price in our islands [will be] the same.

Electricity. We need power plants. We need around 35,000 [megawatts] to build our industries, projects, industrial zones, [manufacturing] zones. So we need power plants. This is also your opportunity to invest in this project. Because we need our power plants for manufacturing, for industrial zones.

Many investors, a lot of investors, when they come to me most of them […] always complain about land acquisition. I will push my ministers, my governors, my mayors to help clear this problem. I have experience with land acquisition when I was a governor. We [had the] Jakarta Outer Ring Road [project that] started 15 years ago but stopped eight years ago, because we had a problem. One point five kilometers [was] unfinished because there [were] 143 families [who did] not accept […] the compensation price. So last year I invited them […] to lunch and dinner. Four times. Ah, this is me. I invited them and then we talked about the problem. Four times. And the problem [was] cleared.

And now the toll road has been [in use since] seven months ago.

Now [let’s] talk business permits. We have a national one-stop service office that can help you, that will serve you, that will facilitate you, that will give you your business permit. For example, [a] principle business permit [will take] three days to process.

Finally, again on behalf of the Indonesian government and the people of Indonesia I would like to thank you for your listening my presentation. We are waiting for you to come to Indonesia. We are waiting for you to invest in Indonesia. Thank you.

Source: The Jakarta Globe

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Joko Widodo, President of Indonesia, at the APEC CEO Summit.