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Indonesia to attract investment with Iceland, Lichtenstein, Norway and Switzerland

The Indonesian government is expecting to finish the ratification of the comprehensive economic partnership agreement with Iceland, Lichtenstein, Norway and Switzerland early next year in a bid to attract investment from those countries amid the COVID-19 crisis. After seven years of negotiations, the agreement between Indonesia and the European Free Trade Association (EFTA) member countries, called IE-CEPA, was signed in December 2018. However, since then, only Iceland and Norway have ratified the agreement.

This is so that both Indonesia or the EFTA countries can reap the benefits of trade in both goods and services, investment and cooperation, especially when many countries across the world are seeing a slowdown because of COVID-19 and trade disruption. Indonesia has been pursuing stronger economic ties with nontraditional partners, including Latin American and Middle Eastern countries, to spur trade and attract new investment, amid the disruption the health crisis has caused to global trade.

So far, Indonesia’s exports have nosedived by 5.58 percent year-on-year (yoy) to US$131.54 billion in the January-October period this year, Statistics Indonesia (BPS) data show. Imports fell more steeply at 19.07 percent yoy to $114.47 billion in the first ten months of the year amid weak domestic demand. Meanwhile, foreign direct investment (FDI) fell by 5.1 percent yoy as of September this year to Rp 301.7 trillion ($21.4 billion), according to Indonesian Investment Coordinating Board (BKPM) data. The IE-CEPA is aimed at serving as a hub for Indonesia to lure investment from the EFTA countries and the broader European market.

(source: The Jakarta Post)