1. L/O/G/O
Case Study:
Indonesia:
Attracting Foreign Investment
Syndicate 5
Muhammad Ridwan – 29112555
Machadi Dhana – 29112303
Mahammad Khadafi – 29112324
Pedro Putu Wirya – 29112565
Seto Kusparyanti – 29112306
Yuliani Dewi Risanti – 29112321
Rahdianto Maulana – 29112554

2. Case Background
• 2006 become the new chapter of Indonesia
economic development
• Foreign direct investment was vital to restoring
economic growth
• Winning back foreign investor was proving to be
a challenge

3. Problem Formulation
The key problem of investment in Indonesia.
• Policy uncertainty
• Corruption
• Lack of confidence in court system
• Infrastructure bottleneck

4. Profile of Indonesia
• Consist of 5 principal island: Sumatra,
Java, Kalimantan, Sulawesi, Irian Jaya
• Consist of 300 distinct native ethnicities
• Rich in natural resources and supportive
climate to many form of agriculture

5. Historical Profile of Indonesia
• The early years of independence: 1949-
1965
• The Suharto regime: 1965-1997
• The Asian Financial Crisis:1997-1998
• Reformasi: 1998-2004
• First elected president: 2004

6. Analysis
• During early years of independence, the
government try to reduce the company
which runs by Dutch and ethnic Chinese.
• During Soeharto regime, the law give
advantages to companies related with
Soeharto and his associate

7. Analysis
• History has shown the fluctuation of
incentive given to investor
• The establishment of BPKM in 1973 and
the government announcement in 2004,
focusing on attracting investor
• Batam as free trade zone, become a
successful example of attracting investor.

8. Lesson Learned
With new investment law approved in March
2007, there are several positive points:
• Financial incentives on case by case basis
• Reduce time to establish business from
155 days to 30 days
• BKPM focus on investment attraction and
providing service
• Regional government and agencies
responsible for investment approval