Indonesia is the single most preferred destination for Singapore-based companies planning to venture overseas in the next six months, according to the BT-UniSIM Business Climate Survey. Indonesia overtook China – the destination of choice for the past two years – which slipped to second place while Malaysia rounded off the top three.
As flooding in Jakarta highlighted the dismal state of Indonesia’s infrastructure, a potential US$200 billion pipeline of power plants, water systems and toll roads presents “huge opportunities” for the region’s banks, engineering companies and law firms, says the country’s agencies charged with reaching out to private investors that can help deliver projects.
“The opportunity is very big,” said Emma Sri Martini, president director of state-owned PT Sarana Multi Infrastruktur (SMI), which was set up in 2009 to plan and help finance projects with public money and find private sector backers.
Private investment will play an important role in building the transport, electricity and other services the country will need to maintain economic growth, expected to accelerate to 6.3 per cent in 2013, the World Bank said in December. Spending on fuel subsidies – a popular vote winner that cost about US$20 billion in 2011 – rivals amounts earmarked for infrastructure this year.
Thoughts of a Cynical Investor 