Indonesia’s investment authority said it was working to increase investment cooperation with the four European Free Trade Association (EFTA) member countries.
In a virtual discussion on Friday, the Investment Coordinating Board said it wanted to expand the potential for investment cooperation with Norway, Switzerland, Iceland and Liechtenstein within the Indonesia-EFTA framework.
Fajar Usman, Director of Foreign Investment Cooperation, said that most of the foreign investment came from Asian countries, with only 10% from Europe, 9% from America, 6% from Australia, and 2% from Africa.
“A lot of investment from various countries has entered Indonesia through Singapore,” he said. “We will encourage the entry of PMA from their home country to Indonesia.”
Usman said Switzerland was the EFTA member country with the largest investment in the country this year, reaching $ 121 million through the third quarter.
Investments from Norway this year were relatively small, with $ 6.94 million through the third quarter, he added.
This puts the total investment from EFTA member countries in Indonesia at $ 128.2 million through the third quarter, he added.
Lack of promotion, marketing
Todung Mulya Lubis, Indonesian Ambassador to Norway, said Norway has great potential to invest in Indonesia.
However, marketing and promotion in Indonesia to attract investment from northern European countries is still lacking because it tends to focus on investment from Asia such as China, South Korea and Japan.
“Hopefully, the Coordinating Body can help facilitate investment entering Indonesia,” said Lubis.
In 2019, Norway’s total investment abroad reached $ 8 billion, but the largest share went to Europe and North America.
“In the last five years, investment from Norway to Indonesia was only $ 64.2 million,” said Lubis.
Norwegian investment is mostly concentrated in Java, with a total of $ 31.54 million, followed by Papua with $ 25.77 million in the hydropower and aquaculture sector.
Its largest investment, in the chemical and pharmaceutical industry, amounted to $ 20.2 million or 31.4% of total state investment.
Only 163 projects have received investment from Norway.
“Maybe our fiscal and non-fiscal incentives and promotions are still lacking,” said Lubis.
Lubis added that Norway had postponed investment plans and cooperation with Indonesian companies due to the corona virus pandemic.
“We need to focus on the importance of investment promotion to achieve investment flows, because it can boost the economy and development, especially from developed countries which have an impact on technology transfer and increase competitiveness in the international market,” he said.
* Written by Rhany Chairunissa Rufinaldo and Maria Elisa Hospita of the Indonesian language service Anadolu Agency in Jakarta
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