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Opinion | Indonesia still wants Chinese investments, but Jokowi is also wooing Middle East money
- Jakarta needs to drum up foreign direct investment to boost lacklustre economic growth, and its recent favourite partner has been Beijing
- But the world’s most populous Muslim nation is now building on deep-rooted historical ties with the Middle East to lessen dependency on China
Reading Time:4 minutes
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Indonesia made great strides in reforming its economy during the first term in office of President Joko Widodo, popularly known as Jokowi.
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The country’s ranking in the World Bank’s ease of doing business study rocketed from 114 in 2014 to 73 this year, and ratings agency Standard and Poor’s in 2017 joined Moody’s and Fitch in awarding BBB investment status.
But securing capital remains a big challenge.
According to government figures, investment grew 11.4 per cent a year in Widodo’s first term, but that number was significantly smaller than in Susilo Bambang Yudhoyono’s second term between 2009 and 2014, when it hit 22.2 per cent.
Last year foreign direct investment fell 8.8 per cent, the worst performance since 2010, and figures for this year look similarly unsatisfactory – in the second quarter, growth stood at 5.01 per cent compared with 5.85 in the same period last year.
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