Indonesia could take advantage from great inter-ASEAN trading to allow Indonesia to diversify risk and strengthen resistance amidst global turbulence. This was the opinion of Amirul Feisal Wan Zahir, Group Head, Global Banking, Maybank spoken in Invest Asean Indonesia in Jakarta on Tuesday (6/10).
Furthermore Feisal Stated that diversification in ASEAN Growing market would be attractive to Indonesian companies amidst adverse economic condition today.
Indonesia according to Feisal had vast opportunities to make profit in ASEAN. Indonesia was great economy in ASEAN and the ASEAN Economic Community might serve as sentiment to growth. “Indonesian is blessed with impressive demography as vast market but ASEAN could offer even greater opportunities,” Feisal said.
According to Research by May Bank King Eng, ASEAN was today at Inflection Point of Capital Expenditure and the formation of AEC opened regional growth in the years to come. One of the main factors was lifting of trading barriers which enhanced inter-ASEAN trading and foreign Direct Investment (FDI).
Today inter-ASEAN trading was posted at 24% of total ASEAN trading while investment in the region remained low at 18%. Meanwhile countries of North America exported 40% of their products for inter-regional trading, countries of the Europe Community exported 60% of their products for inter-regional trading.
Stressing on the importance of forming ASEAN Economy block, Feisal believed that in the “new normal” condition, ASEAN states must foster strong ties through economic collaborations, building strong resistance to external shock and minimize dependency on the West. “ASEAN must help themselves to find opportunities, there is never any better time to be ASEAN” Feisal concluded.
Just like other ASEAN states, Indonesia was facing short-term challenge like weakening of economy and depreciation of Rupiah.
Nevertheless Maybank remained optimistic bout the outlook of Indonesia’s long term economy because of the strong fundamental economy. With the support of stable macro economy, the Indonesian Government in the 2016 Budget Plan had decided to Propel growth by increasing infra structure spending by 8% from Rp.290 trillion to create greater investment opportunities.
Increased infra structure spending would step up greater access ability and inter-connectivity as well as promoting education and development opportunities in Indonesia.
In that same opportunity CEO of Maybank Kim Eng group, Jhon Chong stated that various infra-structure projects must be financed by the capital market especially the bond market and Sukuk which were effective alternative financial resources to finance certain infra structure projects in Indonesia. The Rupiah bond market would enable sponsored projects to seek for long term financing with fixed interest to ensure financing. (SS)
Business News - October 9, 2015