TEMPO.CO, Jakarta – Anton Hermanto Gunawan, chief economist of state-owned lender PT Bank Mandiri, foresees this year’s investment to grow 6-7 percent. He said that investment growth will be relatively low and will not exceed 10 percent as investors enter wait and see mode amid the economic slowdown. “[That is,] despite the government’s efforts to push investment,” he said yesterday in Indonesia-Australia Business Week at Ritz-Carlton Hotel in Kuningan, South Jakarta.
According to Anton, consumer demand will not increase significantly as their purchasing power has not yet recovered. “Consumer confidence had improved but it has dropped again lately,” he said. Anton said that to circumvent sluggish private investment the government should increase spending for infrastructure projects, particularly in the electricity sector. “It will need one to two years to complete in order to boost investment,” Anton said.
Nevertheless, Anton lauded the government for its regulatory reforms. According to him, the strategy has yielded positive results, particularly land reforms. He pointed to ongoing infrastructure projects. “But deregulation is only a piece of the puzzle. There are spaces still left blank,” he said.
On investment, the Investment Coordinating Board (BKPM) chairman Thomas Trikasih Lembong expected foreign investment from Australia to Indonesia to reach US$3 billion or Rp40 trillion in the next five years, most which are to be invested in mining and tourism. Thomas has spoken highly about Australia’s mining sector. Australia-based mining company EMR will acquire gold and silver mines in North Sumatra and Newcrest will operate a gold mine in North Maluku.
In terms of quality, Thomas said, the government is very keen to cooperate with Australia in the tourism sector. “They have a good taste, management and nice design,” he said. At present, Indonesia and Australia have made a commitment to develop tourism sector, particularly marine tourism. Indonesia boasts beautiful islands and diving sites, while Australia has large ships.
Australian Trade, Investment and Tourism Minister Steven Ciobo said that Indonesia is home to other tourist attractions that have huge potential aside from Bali. Ciobo said that Australia is open to foreign investment, including from Indonesia.
The Indonesia Chamber of Commerce and Industry (Kadin) international relations department official Shinta Widjaja Kamdani said that Indonesia and Australia are eyeing cooperation in animal husbandry, digital economy, and education. Kadin and Australia are currently analyzing possible investment under the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).