Japanese Investors Eyeing Indonesian Sectors

With a nod of approval toward the country’s economic prospects, a group of Japanese corporate leaders has indicated their intention to invest in Indonesia, particularly in the consumer and infrastructure sectors, a leader of the group said. Koken-Kai is a group of about 200 Japanese corporate executives from Tokyo, Osaka and Fukuoka. Its members are involved in industries ranging from manufacturing to financial services. “I see a lot of potential in Indonesia,” said Kenichi Ohmae, who led a delegation of about 40 Koken-Kai members to the country last week to meet with political and business leaders.

“That’s why Japanese colleagues of mine will come to Indonesia to take advantage of the country’s very dynamic economic growth.” Ohmae, president of Business Breakthrough and an author of popular business books, said the country was now seen as one of the world’s new economic growth engines, behind China and India.

“People have high expectations for the new government and new cabinet, with Vice President-elect Boediono directing economic policy,” he said. Ohmae noted that Japan was already one of the country’s largest investors as well as one of its biggest export markets, but added that trade between the two sides should increase. “Our member companies will focus on investing in the consumer products and infrastructure sectors,” Ohmae said. “With a huge population of more than 200 million people, I think it would be a mistake for Japan not to pay close attention to the domestic market in Indonesia.”

He added that he was urging Japanese companies to invest in production facilities in Indonesia as well as in China and Vietnam to take advantage of low costs, abundant natural resources and skilled labor. “In my opinion, Indonesia is well-practiced at global competitiveness,” he said. Eric Alexander Sugandi, an economist at Standard Chartered Bank who met with the Koken-Kai delegation, shared Ohmae’s view about the resilience of the economy and the prospects for investment in the domestic consumer goods sector. “Indonesia’s economy is expected to grow by 4 percent this year and by 5 percent next year,” he said during a presentation to Koken-Kai on Friday.

Eric said the second government of President Susilo Bambang Yudhoyono would likely be stronger than the first, giving it more power to enact its reform agenda and providing Boediono greater influence on economic policy. “Indonesia has been less affected by the global crisis and the consumer sector was the most resilient to the downturn,” he added.