Foreign direct investment in Indonesia: has it gone to the right sector?

Fernando, Ricky (2008) Foreign direct investment in Indonesia: has it gone to the right sector? Bachelor thesis, Petra Christian University.

Abstract

Indonesia has been a very attractive market for the foreign investors since its time of independence due to the availability of abundant natural resources and huge potential domestic market. Foreign direct investment has also become an important element of Indonesia's economic development process. However, after the Asian crisis in 1998, it seems difficult to attract foreign investors to invest in Indonesia. Foreign investors have been reluctant to invest in Indonesia due to concerns about political and economic instability Moreover, the hike in the world's oil price and other crisis cause the investment climate to be unstable. In this globalization era, Foreign Direct Investment (FDI) has become an important part of economy. Countries are competing to attract more FDI since it could make significant contributions to economic development. Moreover, FDI will also help a country achieve sustainable economic growth. However, FDI will give better result if it goes to certain sectors which can give most of the benefits to the country.

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