INDONESIA'S free trade zones of Batam, Bintan and Karimun have a "precious window" of opportunity to recapture the attention of foreign and Singaporean investors, said Trade and Industry Minister Lim Hng Kiang yesterday.
This is because of the rising cost of doing business in China, a major competitor for foreign investments.
Indonesia and Singapore have worked hard to make these free trade zones attractive to investors, Mr Lim said at an Indonesia-Singapore business forum.
"By combining the complementary strengths of both countries into a package that is competitive and attractive to investors, we have succeeded in marketing a compelling value proposition of an integrated supply chain to potential third country investors."
While Singapore companies often do business in more familiar locations such as Jakarta, Batam and Bintan, many have also come to recognise the untapped potential of the larger Indonesian market, he added.
For example, large Indonesian cities such as Surabaya, Medan and Bandung offer good opportunities for companies in the food and beverage, retail, and real estate sectors.
Companies focused on engineering, logistics, food processing and urban infrastructure can find many opportunities in resource-rich regions such as Kalimantan and Sulawesi.
Speaking at the same event, Indonesia's Coordinating Minister for Economic Affairs, Mr Hatta Rajasa, urged the Singaporean businessmen in the audience to explore investment opportunities in his country and take note of the economic progress it had made in the past decade.
Indonesia's gross domestic product had quadrupled over the past 10 years to US$850 billion (S$1.05 trillion) last year.
Indonesia's growth has certainly not gone unnoticed by foreign investors from around the world.
Last year, the country received a record net foreign direct investments (FDI) of US$19 billion, up nearly 20 per cent from the year before, Mr Hatta said.
In the first half of this year, FDI had grown 30 per cent from the same period last year.
Singapore was the top foreign investor in Indonesia, especially in areas such as food processing, pharmaceuticals, transportation, electricity and gas and water.
Indonesia hopes to attract more investments into these sectors, as well as sectors such as manufacturing, marine-based industries and tourism, as it seeks to reduce economic dependence from the export of its natural resources.
"Furthermore, we are working on offering tax and other incentives for investors in key economic sectors and regions through special economic zones," Mr Hatta said, adding that the successful integration of Asean member states will hold even greater economic potential.
"Investors would be looking at a huge potential Asean market of 600 million, anchored by Indonesia's 240 million people."
BEST OF BOTH WORLDS
By combining the complementary strengths of both countries into a package that is competitive and attractive to investors, we have succeeded in marketing a compelling value proposition of an integrated supply chain to potential third country investors.
- Trade and Industry MinisterLim Hng Kiang, saying that Indonesia and Singapore have worked hard to make these free trade zones attractive to investors