Indonesia’s New Path: Promoting Investment, Nurturing Prosperity

Indonesia at the end of 2014 is at the beginning of a new era filled with both great challenges and tremendous hope. The election of Joko “Jokowi” Widodo as president after the most closely fought contest in the nation’s history, marks the first time an entrepreneur and a “common man” has become Indonesia’s president. We are confident that the outpouring of enthusiasm that greeted Jokowi’s recent inauguration will help ease any lingering political tensions between the new administration and the legislative branch. There is indeed an air of change in the country. Foreign investors have generally been impressed by the broad economic policy outlines sketched by the team of President Joko and Vice President Jusuf Kalla. Streamlined permit issuance, more rational regulations and cuts in a crippling fuel subsidy have all been promised and would be warmly greeted by investors. The US investment community is committed to working with the new government and legislature openly and transparently to realize our mutual goals of a more prosperous and forward-looking Indonesia. Against this backdrop, we are reminded that American investors have been part of the Indonesian story for many decades, assisting in the growth of the country through numerous political transitions. US investment in Indonesia dates back to 1924, when geologists from Standard Oil of California (now Chevron) first began operating in Sumatra. As our 2013 study, “Partners in Prosperity: US Investment in Indonesia,” found, 1American companies invested roughly $65 billion in Indonesia during the years 2004-2012. More importantly, as that study also found, US companies stand poised to invest another $61 billion over the next five years, assuming that conditions are ripe for the kind of ongoing partnerships that can assist Indonesia to meet its goals of reducing poverty and building a modern economy