investing in Indonesia

Filed in archive Global Economy on December 14, 2004

The Economist has a recent survey about Indonesia and gives a hint why Indonesia is not at all the place to invest in SE Asia:

"The World Economic Forum ranks Indonesia 69th out of 104 countries for its international competitiveness, far behind regional rivals such as Malaysia, Thailand or China. To understand why, picture a potential investor visiting Indonesia for the first time. Before he even sets out on his journey, he will spend several hours at an Indonesian embassy securing the appropriate visa. Your correspondent, for example, had to pay five visits to sort out his papers. On arrival in Jakarta, desultory passport inspectors may keep him waiting in line for an hour. His taxi driver will refuse to start the meter, demanding an extortionate fare instead. Congested roads will drag out his trip into town. As he sits in stationary traffic, he begins to wonder whether one of the vehicles around him might contain the car bomb that anti-western terrorists are said to have stashed away somewhere in Jakarta.

Those first few hours sum up all the problems of doing business in Indonesia: excessive red tape, unproductive labour, bad infrastructure, a lack of respect for the rule of law and a reputation for lax security. "