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Japanese companies lured to invest in Indonesia

The government aims to lure Japanese companies into relocating to Indonesia, as it launched on Wednesday an integrated data platform to spur investment and economic relations between the two countries as the health crisis impacts the economy. The integrated data platform, dubbed Japan-Indonesia Partnership Lounge (JAIPONG), is set to provide information on economic cooperation opportunities between Japan and Indonesia, as well as promote investment climate in the country as part of the country’s efforts to revive an economy battered by the pandemic. As more companies plan relocations to Indonesia, only a few hail from Japan.

Earlier in June, President Joko “Jokowi” Widodo announced seven foreign companies had confirmed plans to relocate production facilities to Indonesia, mostly from China, including South Korean industrial conglomerate LG and Japanese electronics giant Panasonic. The relocations are estimated to bring investment of US$850 million to the country and potential employment for 30,000 workers. Indonesia’s foreign direct investment (FDI) fell 8.1 percent year-on-year (yoy) between January and June to Rp 195.6 trillion ($13.2 billion), from the same period last year, as the COVID-19 pandemic hit the global economy, according to Investment Coordinating Board (BKPM) data. Meanwhile, FDI originating from Japan also dipped 48.5 percent to $1.21 billion as of June this year, from $2.35 billion in the same period last year, BKPM data also showed.

Japan is Indonesia’s fourth-main export destination with $8.32 billion worth of non-oil and gas goods shipped from January to August this year, according to Statistics Indonesia, a decrease of 9.06 percent yoy from the same period last year. Meanwhile, Indonesia imported $7.31 billion worth of non-oil and gas goods from Japan in the same period.

(source: The Jakarta Post)

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