Japanese Investment

Dec 7th, 2006, in Business & Economy, by

Indonesia is increasingly unattractive to Japanese investors.

Indonesia, so far this year, was the 9th most popular investment destination for Japanese investors looking to put their oodles of spare cash to work, based on a survey put out by the Japan International Cooperation Agency (JICA), an aid distribution body. This represents a decline of one spot on last year.

From January to November 2006 total Japanese investment dollars arriving in Indonesia were at $430 million, a massive decline of 61% on the same period last year. M. Lutfi, the head of the state investment board, Badan Koordinasi Penanaman Modal (BKPM), responded thus to the news: cbn

Japan is the most concerning [to us].
(Jepang ini paling mengkhawatirkan.)

Luthfi went on to say that Indonesia’s position kept declining, year after year, and that Japanese investors were increasingly put off coming to Indonesia by the weak and uncertain legal system, the tax regime, and lack of infrastructure and low quality of workers.

In addition to Japan Chinese investment in Indonesia also declined in the period covered, being at $114 million, a downturn of 43%. However Luthfi was more optimistic about China, saying that next year an investment agreement between China and the state electricity body, PLN, would see $4 billion arrive from mainland China.

10 Comments on “Japanese Investment”

  1. mugsy says:

    Indonesia is just too conservative for the Japanese. Like it or not, Indonesia just has to lighten up on the frontiersmen. The Japanese will rely on their young people to broker an Indonesian, Japanese interest an economic interest.

  2. Tomaculum says:

    The only reason for the decreasing of the japanese investment is that the production costs in Indonesia is now not /low cheap enough. There are more countries with cheaper manpower.

  3. Bas says:

    Production cost is not everything. What refrain them more in my opinion is the low quality of workers, law makers and those suposed to watch the aplication of these laws… Why Sony leaved the country? Only insane people would invest in such a country where you cannot even buy a property. Where even your wife cannot buy a property because her husband is a foreigner. They don’t want foreigners here. Only their money. Let’s let them alone and see what’s happening next.

  4. Rudy Hendra says:

    You know, Indonesia is a beggar country.
    They just want your money, and don’t care to pay back.

    If you live in Indonesia, you will know that ‘native-Indonesian’ will not pay back if they borrow your money.

    I keep wondering, why Indonesian have such mentality.
    They always think,”How can I borrow from others?”
    Not,”How can I be useful for others.”
    They always think,”How I can have your money?”
    Not,”How can I make money?”

    Like I said. Beggar country.

  5. Bas says:

    And always thinking about short time, never about long term. Some guys could be rich now if they had colaborate with me and not trying (and most of the time succedding) to cheat and stole my money. But that’s Indonesia. People prefer getting 1 million by cheating you and basta rather than really working with with and getting hundreds of millions…

  6. Rudy Hendra says:

    Yes, that’s right.
    In our Chinese community, also the Chinese in Bandung, business relationship can last for a lifetime, even more.
    And also friendship.

  7. Dimp says:

    Hi Rudy,

    That is a harsh word, con-artists know no boundaries, crimes have no religions, they know no races. You just have to be careful.

    Just because some of your good business comes from Chinese does not mean that no Chinese will cheat you, the same that just because some of the Pribumi did cheat you that every Pribumi will cheat you.

    My personal experience doing business was that I was cheated by Chinese-Indonesian, mind you that they are also Christians, not that they are all bad, they always say “God be with you”, “God praise you” etc., yet they have no issues cheating me of my money.

    So again, there will always be opportunists out there, there will always be con-artists out there, but you cannot generalised them.

  8. Andrew says:

    Going back to the original topic, the Japanese is right: who would be interested in gambling millions of dollars in a land where you could lose your money in a split second? it is of course better put their money in China, Vietnam, Thailand.

    This is not what I want as an Indonesian, but hell, that is a completely logical and sensible business decision.

  9. BB says:

    >Japanese interest an economic interest.

    When you invest your money, what else interest do you have?
    People even go for a war because of their economic interests. (refer to Iraq)

  10. keli says:

    So easy to be conned. If female well, just be white, dont be out of sight and not too bright and bring your money with you. They love you more than you will ever know. So be tame and play the game and they will end with the same. Not MUCH

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