Foreign investment in Indonesia rises as Jokowi pushes reforms

[INDONESIA] Foreign direct investment in Indonesia picked up last quarter, a sign President Joko Widodo's reforms may be starting to increase interest in Southeast Asia's largest economy.

Investment from overseas rose to US$7.9 billion in three months through December, up 7 per cent from the previous quarter, the Investment Coordinating Board said in Jakarta on Thursday. It rose 3 per cent in 2015 to $29.3 billion, after stagnating in 2014.

Stung into action by a decline in the rupiah, slumping demand for the country's commodities and the slowest economic growth since 2009, Widodo, known as Jokowi, reshuffled his cabinet in August and began a series of reforms aimed at making it easier to do business. While those measures have improved sentiment, fixing the red tape, corruption and lack of legal certainty that have long put off investors will probably take time.

"There is positive movement but you can't expect things to happen overnight," said Vishnu Swaroop Baldwa, president director of PT Indo-Rama Synthetics, a textile company that has invested $350 million in Indonesia over the last five years.

"The political will is there and I think the bureaucracy is following that, but there is a lot more which can be done," he said earlier this month.

The data released Thursday doesn't include investment in the oil, gas and banking sectors. Oil and gas investment was $13.6 billion in the first 10 months of 2015, short of the government's full-year target of $23.7 billion, according to energy ministry data.

BLOOMBERG