Although Japan was not selected to develop the first high-speed railway in Indonesia (this Jakarta-Bandung railway project went to Chinese investors), it remains interested to handle other infrastructure projects. Mouri added that Japan is also interested to develop businesses in other sectors, particularly now the Indonesian government has opened room for foreign direct investment through the revision of the Negative Investment List (this revision is part of the government's tenth economic stimulus package).

Nasution commented on the meeting with Mouri saying he invited Japanese investors to invest in infrastructure (particularly toll roads and power stations). Other lucrative investment opportunities for Japanese companies, according to Nasution, are Indonesia's healthcare, pharmaceutical and rubber sectors.

As the domestic economy of Japan is still plagued by contraction (GDP growth contracted 1.1 percent year-on-year in the fourth quarter of 2015), it is more attractive for Japanese investors to look abroad. Indonesia is one of those emerging economies that still needs billions and billions of US dollars in investment in order to improve the quality and quantity of the nation's infrastructure. The lack of adequate infrastructure in Indonesia causes high logistics costs and curtails foreign investors' interest to invest in the country.

Data from the Indonesia Investment Coordinating Board (BKPM), the investment services agency of the Indonesian government, show that Japanese investors invested a total of USD $14.9 billion into Indonesia in the years 2010-2015. Most of these investments went into Indonesia's transportation sector, followed by the metal, machinery & electronics sector.

Total Japanese Investment into Indonesia:

   2010  2011  2012  2013  2014  2015
Japanese Investment
(in billion USD)
   0.7    1.5    2.3    4.7    2.7    2.8

Source: BKPM

Japanese Investment into Indonesia per Industry in 2010-2015:

Industry       Value
(in billion USD)
Transportation         7.5
Metal, Machinery & Electronics         2.4
Chemicals & Pharmaceuticals         0.9
Housing, Industrial & Offices         0.7
Food         0.5

Source: BKPM

One of the Japanese companies that showed its commitment to invest in Indonesia is the Toyota Motor Corporation. The company invested IDR 2.3 trillion (approx. USD $174 million) to develop a new factory in Karawang (West Java). This is part of the company's total commitment to invest a total of IDR 20 trillion (approx. USD $1.5 billion) up to 2019, making Indonesia its production base. Through its unit Toyota Motor Manufacturing Indonesia, the company now owns five factories in Indonesia: two in Sunter (North Jakarta) and three in Kawarang (East Java).

Top 10 Foreign Investors in Indonesia in 2015:

Country   Value
(bln USD)
Number of
Projects
Singapore     5.9 3,012
Malaysia     3.1  913
Japan     2.9 2,030
Netherlands     1.3  421
South Korea     1.2 2,329
Hong Kong     0.9  422
USA     0.9  261
British Virgin Islands     0.7  549
China     0.6 1,052
Great Britain     0.5  267

Source: BKPM

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