Obama's visit hoped to attract investment to Indonesian real sector

U.S. President Barack Obama has just finished his visit to Indonesia on Wednesday after staying in the country less than 24 hours. Many expectations emerged as Indonesia is regarded of managing to increase its profile before the eye of the world.

One of the expectations is that the visit could increase American investment in Indonesia. However, economists said that without improvement in infrastructures, the hope will be in vain.

Hatta Rajasa, coordinating minister for the economy, said that he was hoping the visit would encourage investment in renewable energy and heavy machinery, noting that U.S. investment this year through September outside of oil and gas had jumped to 871 million U.S. dollars.

"We want a technology transfer and hope there is investment in renewable energy management," said Rajasa.

He also hopes that the United States will invest in railway sector, which is clearly lag behind. Companies such as General Electric or Caterpillar could open a locomotive factory in the country.

Rajasa said that the U.S. investment in Indonesia had been increasing over the past few years.

Aviliani, an economist from the Institute for Development of Economic and Finance (INDEF), told Xinhua in an exclusive interview that the hope should be accompanied by the government's seriousness in improving infrastructures, things that have been the object of complaints by investors willing to invest in the country.

"The visit would not bear any result if our government did not follow it up with investment friendly policies, including improvement in infrastructures," said Aviliani.

She also said that indeed, foreign investments keep flowing in Indonesia, but they eye non-real sector.

"Without Obama's visit, investment keeps flowing in shares, bonds and Certificates of Bank Indonesia, the central bank, but it needs the government seriousness to attract them into real sector, " said Aviliani.

Arianto A Patunru, director of f Institute for Economic and Social Research (LPEM) at the Economics Faculty, University of Indonesia, told Xinhua in a separate interview that the United States is still a giant economy despite of recent crisis.

"It is normal if the Indonesian government hopes that the U.S. could increase its investment to the country although the U.S. is not as big as before due to financial crisis," he said.

According to Patunru, American multi-national companies have a more important role in deciding to invest in a country than their government as they are mostly not associated with the U.S. administration.

He also said that one day the United States is surely will rise from its fall.

"Even today, we can't deny that the U.S. still has huge power in the world even though now China significantly rises as a new economy powerhouse," said Patunru.

The value of US investments, excluding oil and gas, had reached 157 million U.S. dollars in 2008, rising to 171 million dollars last year before making a big jump in 2010 as foreign investors capitalized on strong economic growth here.

Trade Minister MS Hidayat projected that the U.S. non-oil and gas investment in Indonesia would hit a record high of 1 billion dollars in the next few years.
(Source:xinhua)