U.S. Project and Investment Value in Indonesia Over a Decade

The Central Statistics Agency (BPS) has compiled data on project and investment values from the United States (US) in Indonesia over a decade.

Investment values are generally higher than project values. Since 2014, US investment has been substantial, nearing US$1.3 billion, while project values amounted to US$179 million.

In 2018, investment reached US$1.21 billion, exceeding project values of US$572 million.

Both values weakened in 2019 and 2021 but rebounded in 2022, exceeding US$1-3 billion each.

The latest data from 2024 shows a significant increase. Project value reached US$4.83 billion, while investment value was lower at US$3.69 billion.

Lower Import Tariffs Claimed to Boost US Investment Opportunities

Citing Katadata, Trade Minister Budi Santoso believes that reduced import tariffs on Indonesian goods from the United States (US) will create investment opportunities. He suggests that factories in neighboring countries with higher tariffs may relocate.

Budi stated that 10 commodities with potential for production facility relocation to Indonesia have been identified. Some of these commodities include footwear, textiles, and textile products.

"These commodities are among Indonesia's top 10 export products to the United States. We have identified factories in various countries that could relocate domestically," Budi said at the DPR building on Wednesday (16/7).

The Indonesian Employers Association (Apindo) notes that Indonesia's tariff rates are now more competitive than those of neighboring countries such as Thailand (36%), Laos (40%), Malaysia (25%), and Vietnam (20%). Furthermore, Budi believes that domestic raw material resilience will improve with the exemption of import duties from the United States.

According to Budi, most of these products are raw materials and capital goods needed by the manufacturing sector, such as cotton, soybeans, corn, and crude oil. "This is a great opportunity as it can support domestic industrial players," Budi added.

(Read Katadata: Trade Minister's Response to Lower Trump Tariffs for Indonesia: This is an Investment Opportunity)