Indonesia pushes infrastructure development

Indonesia pushes infrastructure development.

By: Manik Mehta | Issue #631 | Aug 08 2016 at 09:07 AM | Channel(s): International Trade

Indonesia is focusing on port development and is seeking American investment and technology to make it happen.

With its strategic geographic location close to the Strait of Malacca, one of the world's busiest lanes for international trade, Indonesia has long yearned to carve out a larger slice of the international shipping pie; the Southeast Asian nation is now pro-actively making efforts, with a series of measures, to upgrade its anachronistic infrastructure with a view to bolstering its trade and business ties with both its regional and international trading partners.

The recent formation of the ASEAN Economic Community (AEC), emulating the European Union's model, is also driving Indonesia's leadership to create a viable and modern infrastructure that will, particularly, strengthen air, sea and road transportation, and give Indonesia the sharp-edged competition advantage in its bid to become a regional shipping power. Indonesia has also expressed an interest in joining the U.S. led Trans-Pacific Partnership (TPP); although this agreement has yet to be ratified by the United States – it was signed by 12 member nations early this year in Auckland, New Zealand – the possibility of becoming a future member of this large free trade zone that accounts for roughly 40 percent of global trade has spurred Indonesia's interest to expeditiously develop modern infrastructure and facilitate transportation and distribution of goods.

Indonesian Investment Coordination Board

With this objective in mind, a high-profiled delegation led by Franky Sibarani, the chairman of the Indonesian Investment Coordination Board, (IICB), recently visited the United States in an effort to court U.S. investors and technology providers, highlighting to them the opportunities unfolding in Indonesia.

"The United States is the largest investor and most important trading partner of Indonesia. President Barack Obama has visited Indonesia twice between 2010 and 2015. U.S. companies, not including financial and petroleum sectors, have invested $8.3 billion, with commitments of $16.5 billion in pharmaceutical, chemical and other sectors. Indonesia, Southeast Asia's largest market with a population of 255 million, accounts for 41 percent of the population of the Association of Southeast Asian Nations (ASEAN)," Sibarani said in an interview with the AJOT in New York.