Competing with Singapore
Sep 9th, 2006, in Business & Economy, News, by PatungIndonesia still has a long way to go to compete with the likes of Singapore, says the head of the national investment body.
Muhammad Luthfi, the head of the Badan Koordinasi Penanaman Modal (BKPM), speaking in respect of the poor ratings given to Indonesia in the Doing Business 2007 report put out by the World Bank recently, said that Indonesia remained unable to match the conducive business climate as existed in countries such as Singapore, in terms of their ability to speedily process and approve new investment projects.
They are clearly much quicker than Indonesia. Other countries are a step ahead of us.
(Mereka jelas lebih cepat dari Indonesia. Negara lain selangkah lebih maju.)
Luthfi went on to say that the government was committed to carrying out reforms to streamline the approval process for foreign investment permits and he was confident that the level of foreign investment would increase due to these measures.
He also said that the example of Batam, a special economic zone,
would be imitated by other regions. Batam, he said, had succeeded in reducing the time needed to process investment permits from 151 days to 97.
Meanwhile the Economy minister, Boediono, said that the government would take on board the results of the World Bank survey and would keep striving to improve the investment climate. When questioned on the poor scoring of Indonesia in the survey he re-iterated that Indonesia was focused on making it easier for investors to enter the country and also made mention of the Batam success story.
It has already begun in Batam, that’s a good sign.
(Dan itu sudah dimulai di Batam. Itu pertanda baik.)
According to BKPM statistics the level of foreign investment in Indonesia in the first half of 2006 was to the value of $3.7 billion, falling from $4.9 billion in the same period last year. The value of domestic investment however saw an improvement, rising from 9.61 trillion rupiah in the first half of 2005 to 11.46 trillion this year.
One Comment on “Competing with Singapore”
Comment on “Competing with Singapore”.
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If you really looked more in depth it really shows that the local did not increase but just sheer figure manipulation due to exchange rates,
Investment company manipulates, or the government manipulated by making calculation based on USD from year to year using such prevailing exchange rates to balance their book to show PNL.
Therefore the so call increase is not surprising at all. That is they actually remain stagnant. Anyone with an economic mind will be able to tell when foreign investment fell local investment will follow suit instead of rising. It will only rise when foreign investment increases. If it remains the same figure during a stabilizing of the rupiahs then will we be able to consider it a rise.
This is what I see as the failure in doing their due diligence and providing the public with fictitious figures.
It is like a company’s that is public listed and when figures are grossly manipulated it gives investors a picture of the company ding well but in fact it is losing money.
Simple. If you invest 1 million @ 8,000 rupiahs = 8 billion rups.
When exchange rate fell to 11,000 = 11 billion rups so is there a rise or fall.
On the other hand if the 1 million @ 11,000 = 11 billion rups and when it strengthen to 8,000 then the investment of 11 billion becomes 1.4 million USD.
That is the difference. Noting that when investments is in it will no longer be USD.
So the management and diversifying of funds in an investment is of ultimate importance not just investing only.
Many foreign country hedges their foreign investment against the currency of the country of their investments in anticipation of a volatile unforeseen econo yo yo especially countries like, Indonesia, Thailand and Philippines.
Here you could see and weigh the competence of these people in BI.
Unlike in singapore when the currency fluctuations is so minimal or stabilized throughout or like in Malaysia and Hong Kong where they pegged their currencies to the USD, an increase in portfolio will show real time rise instead of figure manipulation.
So such comparison in percentage with other countries does not necessarily mean it is doing well.
People will sit and laugh at you while you show the world the ignorance of a real world in action whereas you are still in a world of fantasy.