Tuesday, 28 July 2015

Investment Challenges in Indonesia

TEMPO.CO, Jakarta - Economist Lana Soelistianingsih from the Universitas Indonesia said Indonesia’s biggest challenge in investment is the people’s lack of interest and knowledge, which is why the government has to provide intensive education.
"Education is important as knowledge about market so that the spread of local and foreign investors is more equal," said Lana Tuesday. Even distribution of local and foreign investors will protect Indonesia from foreign pressures.
Currently, foreign investors have larger percentage in stock investment with 51 percent and government bonds with 35.8 percent, making Indonesia depending too much on foreign investment.
There are two things causing the people’s lack of interest in investment. First of all, small per capita income. Even though investment costs are now cheap, per capita income of Rp3 million a month is considered scant. "People still put a lot of thought in saving, let alone investment," Lana said.
Second of all, the people’s lack of awareness of the importance of investment. In order to overcome this, the government must start introducing investment at school. "[The introduction must] start in junior in high school," Lana added.
Indonesia is facing five challenges in physical investment: Corruption, inefficient bureaucracy, lack of inadequate infrastructure, overlap between policies of the central and regional governments and expensive cost of loans.
In the short-term, the government can improve infrastructure and obviate the overlap between the central and regional governments. "For the other three [challenges], a long-term plan is needed in order to improve them," said Lana.


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