Editing Economy of Indonesia (section)

==Investment==
{{see also|List of main infrastructure projects in Indonesia}}
[[File:Bursa Efek Jakarta - panoramio.jpg|thumb|[[Indonesia Stock Exchange]] building in [[Jakarta]].]]
Since the late 1980s, Indonesia has made significant changes to its regulatory framework to encourage economic growth. This growth was financed mostly from private investment, both foreign and domestic. US investors dominated the oil and gas sector and undertook some of Indonesia's largest mining projects. In addition, the presence of US banks, manufacturers, and service providers expanded, especially after the industrial and financial sector reforms of the 1980s. Other major foreign investors included India, Japan, the UK, Singapore, the Netherlands, Qatar, Hong Kong, Taiwan and South Korea.

The 1997 crisis made continued private financing imperative but problematic. New foreign investment approvals fell by almost two-thirds between 1997 and 1999. The crisis further highlighted areas where additional reform was needed. Frequently cited areas for improving the investment climate were the establishment of a functioning legal and judicial system, adherence to competitive processes, and adoption of internationally acceptable accounting and disclosure standards. Despite improvements of laws in recent years, Indonesia's intellectual property rights regime remains weak, and lack of effective enforcement is a significant concern. Under Suharto, Indonesia had moved towards the private provision of public infrastructure, including electric power, toll roads, and telecommunications. The 1997 crisis brought to light a severe weakness in the process of dispute resolution, however, particularly in the area of private infrastructure projects. Although Indonesia continued to have the advantages of a large labour force, abundant natural resources and modern infrastructure, private investment in new projects largely ceased during the crisis.

As of 28 June 2010, the [[Indonesia Stock Exchange]] had 341 listed companies with a combined market capitalization of $269.9 billion.<ref>Bloomberg Terminal</ref> As of November 2010, two-thirds of the market capitalization was in the form of foreign funds, and only around 1% of the population have stock investments.<ref>{{cite web|url=http://www.thejakartapost.com/news/2010/11/05/economy-risks-losing-momentum-experts.html|title=Economy risks losing momentum: Experts|work=The Jakarta Post|date=26 November 2010|access-date=29 August 2011}}</ref> Efforts are further being made to improve the business and investment environment. Within the [[World Bank]]'s Doing Business Survey,<ref>{{cite web|url=http://www.doingbusiness.org/economyrankings/|title=Doing Business Survey, World Bank|publisher=Doingbusiness.org|access-date=29 August 2011}}</ref> Indonesia rose to 122 out of 178 countries in 2010, from 129 in the previous year. Despite these efforts, the rank is still below regional peers, and an unfavorable investment climate persists. For example, potential foreign investors and their executive staff cannot maintain their own bank accounts in Indonesia, unless they are tax-paying local residents (paying tax in Indonesia for their worldwide income).{{citation needed|date=November 2008}}

From 1990 to 2010, Indonesian companies have been involved in 3,757 [[mergers and acquisitions]] as either acquirer or target with a total known value of $137 billion.<ref>{{cite web|url=http://www.imaa-institute.org/statistics-mergers-acquisitions.html#MergersAcquisitions_Indonesia|title=Statistics on Mergers & Acquisitions (M&A)|publisher=Imaa-institute.org|access-date=29 August 2011|archive-url=https://web.archive.org/web/20120106045040/http://www.imaa-institute.org/statistics-mergers-acquisitions.html#MergersAcquisitions_Indonesia|archive-date=6 January 2012|url-status=dead}}</ref> In 2010, 609 transactions were announced, which is a new record. Numbers had increased by 19% compared to 2009. The value of deals in 2010 was US$17 billion, which is the second-highest number ever. In 2012, Indonesia realized total investments of $32.5 billion, surpassing its annual target $25 billion, as reported by Investment Coordinating Board (BKPM) on 22 January. The primary investments were in the mining, transport and chemicals sectors.<ref name=indoinvest13>{{Cite news|title=Indonesia aims to boost FDI by 23%|publisher=Investvine.com|date=24 January 2013|url=http://investvine.com/indonesia-seeks-to-boost-fdi-by-23/|access-date=26 January 2013|archive-date=23 October 2013|archive-url=https://web.archive.org/web/20131023141024/http://investvine.com/indonesia-seeks-to-boost-fdi-by-23/|url-status=dead}}</ref> In 2011, the Indonesian government announced a new ''Masterplan'' (known as the ''MP3EI'', or ''Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia'', the ''Masterplan to Accelerate and Expand Economic Development in Indonesia'').  The aim was to encourage increased investment, particularly in [[List of main infrastructure projects in Indonesia|infrastructure projects across Indonesia]].<ref>A copy of the ''Masterplan'' is available at the website of the Indonesian ''[http://www.ekon.go.id/media/filemanager/2011/07/06/m/p/mp3ei-english_final.pdf Coordinating Ministry for Economic Affairs]''. {{Webarchive|url=https://web.archive.org/web/20120908091511/http://www.ekon.go.id/media/filemanager/2011/07/06/m/p/mp3ei-english_final.pdf |date=8 September 2012 }}.</ref>

Indonesia regained its investment grade rating from [[Fitch Group|Fitch Rating]] in late 2011, and from [[Moody's Investors Service|Moody's Rating]] in early 2012, after losing it in the 1997 crisis, during which Indonesia spent more than Rp. 450 trillion ($50 billion) to bail out lenders from banks.{{Citation needed|date=November 2014}} Fitch raised Indonesia's long-term and local currency debt rating to BBB− from BB+ with both ratings is stable. Fitch also predicted that the economy would grow at least 6% on average per year through 2013, despite a less conducive global economic climate. Moody's raised Indonesia's foreign and local currency bond ratings to Baa3 from Ba1 with a stable outlook.<ref>{{cite web|url=http://www.thejakartaglobe.com/business/moodys-also-says-indonesia-economy-now-investment-grade/492255|title=Moody's Also Says Indonesia Economy Now Investment Grade|date=18 January 2012|access-date=20 May 2012|archive-url=https://web.archive.org/web/20120423130447/http://www.thejakartaglobe.com/business/moodys-also-says-indonesia-economy-now-investment-grade/492255|archive-date=23 April 2012|url-status=dead}}</ref> In May 2017, [[S&P Global]] raised Indonesia's investment grade from BB+ to BBB− with a stable outlook, due to the economy experiencing a rebound in exports and strong consumer spending during early 2017.<ref>{{Cite news|url=https://www.bloomberg.com/news/articles/2017-05-19/s-p-upgrades-indonesia-to-investment-grade-amid-stronger-growth|title=Indonesia Raised to Investment Grade by S&P on Budget Curbs|date=2017-05-19|work=Bloomberg.com|access-date=2018-01-28}}</ref>

===Foreign Direct Investment (FDI)===
Indonesia's foreign direct investment surged 44.2% on a yearly basis in 2022, with the base metals sector drawing in the biggest inflows. Indonesia's received 654.4 trillion rupiah worth of FDI last year, or equivalent to $45.6 billion in the investment ministry's official calculation, which assumes an exchange rate of 14,350 to the dollar. The data excludes investment in the banking and oil and gas sectors. Foreign direct investment in base metals and mining reached $11 billion and $5.1 billion, respectively, last year, the biggest recipients of FDI. The biggest sources were Singapore, China and Hong Kong. Total investment, including from domestic sources, reached 1,207.2 trillion rupiah ($81.02 billion), roughly in line with the government's target. FDI in the final quarter of last year was up 43.3% on an annual basis, amounting to 175.2 trillion rupiah in rupiah terms, or $12.2 billion in the official U.S. dollar equivalent.<ref>{{Cite news |title=Indonesia's FDI jumps in 2022, led by mineral processing |url=https://www.reuters.com/markets/asia/indonesias-fdi-jumps-2022-led-by-mineral-processing-2023-01-24/ |access-date=2023-05-14 |website=reuters |date=24 January 2023 |language=en |last1=Sulaiman |first1=Stefanno |last2=Suroyo |first2=Gayatri }}</ref>

List of the 10 largest foreign investment origin countries in Indonesia :

{| class="wikitable" style="text-align:right;"
! Rank !! Country !! FDI 2022<ref>{{Cite web |title=10 Negara Asal Investasi Asing Terbesar di Indonesia Tahun 2022 |url=https://databoks.katadata.co.id/datapublish/2023/01/10/10-negara-asal-investasi-asing-terbesar-di-indonesia-tahun-2022 |access-date=2023-05-14 |website=katadata |language=id}}</ref> <br> in billion USD !! FDI 2024<ref>{{Cite web |title=10 Negara Investor Terbesar Bagi Indonesia |url=https://goodstats.id/article/negara-dengan-investasi-terbesar-di-indonesia-2024-4AtNp#google_vignette |access-date=2025-06-11 |website=goodstats.id |language=id}}</ref> <br> in billion USD !! increase
|-
| 1 || style="text-align:left;" | {{flag|Singapore}} || $10.54 || $20.04 || {{increase}} 90.13%
|-
| 2 || style="text-align:left;" | {{flag|Hong Kong}} || $3.91 || $8.22 || {{increase}} 110.23%
|-
| 3 || style="text-align:left;" | {{flag|China}} || $5.18 || $8.11 || {{increase}} 56.56%
|-
| 4 || style="text-align:left;" | {{flag|Malaysia}} || $2.21 || $4.24 || {{increase}} 91.86%
|-
| 5 || style="text-align:left;" | {{flag|United States}} || $2.12 || $3.70 || {{increase}} 74.53%
|-
| 6 || style="text-align:left;" | {{flag|Japan}} || $2.76 || $3.46 || {{increase}} 25.36%
|-
| 7 || style="text-align:left;" | {{flag|South Korea}} || $1.66 || $2.99 || {{increase}} 80.12%
|-
| 8 || style="text-align:left;" | {{flag|Netherlands}} || $1.09 || $1.98 || {{increase}} 81.65%
|-
| 9 || style="text-align:left;" | {{flag|British Virgin Islands}} || -<ref group="n" name="Bermuda-THM"/> || $0.78 || {{new}}
|-
| 10 || style="text-align:left;" | {{flag|United Kingdom}} || $0.51 || $0.75 || {{increase}} 47.06%
|-
| colspan="2" style="text-align:center;"| '''Total''' || '''$45.6''' || '''$60.0''' || {{increase}} '''31.60%'''
|}

Foreign direct investment into Indonesia (excluding investment in banking and the oil and gas sectors) increased 20.2 percent year-on-year to a new record peak of IDR 177 trillion (US$11.96 billion) in the Q1 of 2023, amid efforts by the government to ease business and licensing rules. Singapore (US$4.3 billion) was the biggest source of investment, followed by Hong Kong (US$1.5 billion), China (US$1.2 billion), and Japan (US$1 billion) while base metals were the biggest recipient amid efforts to boost investment in processed minerals. In total, Indonesia recorded IDR 328.9 trillion of foreign and domestic investment during the first quarter, up 16.5 percent from a year earlier, boosted by a rise in investment in base metals, transportation, and the mining sector. For 2023, the government has set a target to draw IDR 1,400 trillion (US$95.5 billion) of investment from domestic and foreign sources.<ref>{{Cite web |title=Indonesia Attracts Rp 328.9 Trillion Investment in Q1-2023 |url=https://jakartaglobe.id/business/indonesia-attracts-rp-3289-trillion-investment-in-q12023 |access-date=2023-05-14 |website=jakartaglobe |language=en}}</ref>