FOREIGN INVESTORS MORE CONCERNED ABOUT SECURITY ASSURANCE RATHER THAN LABOR COST

Foreign investor never questioned about the plan of Regional Provincial Minimum Wages (UMP) of workers at all what they were concerned about was acts of sweeping by labor unions and security guarantee. “They said that the anarchic act was their biggest problem” this was disclosed by Head of the Coordinating Board of Investment (BKPM) Mohamad Chatib Basri to the Press amidst Indonesia Investment Summit 2012 in Jakarta on Tuesday (6/10).

Chartib was of opinion that the impact of increased Minimum Wages (UMR) was strongly felt among medium and small companies, but multi national companies claimed that they had paid salaries above minimum standard. Chatib also denied there were threats by foreign investors to relocate their business to other countries where the UMR was lower, because so far there had been no foreign investors who expressed their grievances or intention to walk out.

Investment Still Strong

Broadly speaking Chatib was still optimistic investment would be plentiful until Quarter I-2013. One thing to be observed was export condition an private consumption. Somehow Chatib admitted that realization of Foreign Capital Investment (PMA) in Indonesia from Quarter II-2012 to quarter III-2012 was not as high as that of Quarter 1-2012 to quarter II-2012. According to Chatib, such happened due to slowdown in import of capital goods.

Investment growth through quarter III-2012 was 10.2%. In January - September 2012 realization of investment reached USD 25.54 billion or 81.1% of target 2012 at USD 31.5 billion, increasing by 27% against same period of 2011.

Indonesia Investment Summit 2012 was attended by more than 500 participants from CEO of companies, prominent analysts, academicians and Government Officials from Europe, America, and the Middle East.

Chatib disclosed that the forum was meant to updated information on the policy of the Government of RI and investment plan in six economic corridors as well as to facilitate opportunities for fostering partnership through one-on-one meeting between international and local businesspeople, or consultation with Government officials.

Business News - November 9, 2012