Since the economic crisis of the late 1990’s Japanese investment in Indonesia has declined dramatically. There has been a little improvement of late.

Both the Trade Minister Mari Elka Pangestu and Japanese Ambassador to Indonesia, Ebihara concurred that in 1997 the value of Japanese investment in Indonesia was at $8 billion while by 2005 it had fallen precipitously to $1.2 billion.

China, Vietnam and Thailand had proven to be more attractive destinations for Japanese capital than Indonesia, said Mari. Ebihara however was somewhat upbeat over the future putting faith in the fertile womb of the Indonesian woman as an engine of continued growth, and hence a drawing card for Japanese companies.

Compared to other Asian countries, Indonesia has a high potential in terms of population growth.

The Capital Investment Coordinating Body says that Japan’s investment in Indonesia from January to June of 2006 increased by 110 percent to US$653.4 million, compared to the same period last year. A full one third of this investment was destined for the car industry while other sectors of interest include electronics, printing, plastics and rubber.