Even more worrisome is that foreign direct investment (FDI) contracted – for the first time in eight years – by 12.9 percent (y/y) to IDR 95.7 trillion (approx. USD $7.1 billion) in Q2-2018 (the BKPM’s direct investment data excludes investment in Indonesia’s oil & gas and financial services industries).

It is assumed that investors – and particularly foreign investors – are in a wait & see mode ahead of the 2019 presidential and legislative elections (scheduled for April 2019). Indonesia is a young democracy (therefore not as stable as the long-standing democracies) in which various forces seek power, including hardline Muslims, nationalists, and individuals who are part of the country’s old (and notoriously corrupt) elite.

Read the full article in the August 2018 edition of Indonesia Investments' research report

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