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Time for Indonesia to walk the talk

By NexChange
Capital Markets

It is crunch time for Indonesia’s reform-minded administration. The imminent award of a highly contested new railway contract and confusion about a big foreign investment in a factory are a test of its resolve to put words into action.

Any day now, Indonesia will announce the winner of a race between China and Japan to build the first high-speed railway in Southeast Asia's biggest economy. It has been an “unprecedented battle”, writes Reuters, to build the 150-km (93-mile) link between the capital, Jakarta, and the textile hub of Bandung.

But, the decision has already been delayed a week. Ominously, a cabinet member said that the two proposals will be examined by an independent consultancy – which indicates more foot-dragging. That would be a pity. As anyone knows who has tried to move around in Jakarta or anywhere else in the sprawling archipelago transportation is a headache for individuals and a pounding migraine for businessmen.

Separately, there are mixed signals about whether or not Taiwan's Foxconn Technology Group, the world's biggest electronic components maker, will go ahead with plans to build a large factory in the country.

One government official said that the Apple supplier had abandoned the project, another denied it; Foxconn hasn’t commented.

This is depressing for foreign investors eager to take advantage of Indonesia’s vast potential. It has a population of more than 250 million that is getting richer. Protecting domestic industries seems to be President Joko Widodo’s priority

“Jokowi” was elected last year amid a wave of optimism that he would clean up government, reduce poverty, cut red-tape to attract foreign businessmen and fix the country’s dilapidated infrastructure.

So far he has upset human rights campaigners by executing drug peddlers and alienated regional allies such as Australia with gauche foreign policy stances.
Photo: Oktaviono

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