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Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc
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Utilico Insights - Jacqueline Broers assesses why Vietnam could be the darling of Asia for investors
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Indonesia president orders cabinet to step up efforts to attract FDI amid global slowdown

Wed, 04th Sep 2019 09:48

JAKARTA, Sept 4 (Reuters) - Indonesian President Joko Widodoon Wednesday ordered his ministers to increase efforts to cutregulations that hurt foreign direct investment, aiming toshield Southeast Asia's largest economy from a global economicslowdown.

Indonesia must anticipate a global slowdown and "a growingpossibility of global recession" amid the U.S.-China trade war,the president said.

"I ask all economic related ministries to make an inventoryof regulations that hinder or slow investment and let's meet ina week to talk about how to streamline them," he told a meetingwith some ministers in his cabinet.

Widodo, who won an election in April for a second term, haspromised more investment opportunities to create jobs andgrowth, but has also repeatedly expressed frustration at thecountry's tortuous bureaucracy.

The president said a World Bank report presented to hisadministration showed that out of 33 companies which relocatedout of China amid the trade war, 23 had chosen Vietnam and theothers had picked Malaysia, Thailand and Cambodia.

"Nobody came to Indonesia. Underline this. We have aproblem," he said, describing further that it takes 2 months toprocess a new investment in Vietnam, as opposed to years inIndonesia.

The president questioned the progress of state energy firmPertamina's talks with Saudi Aramco over a joint investment foran oil refinery, giving this as an example of stalled foreigninvestment decision.

Pertamina in June extended its negotiations with Aramco forthe Cilacap refinery by another three months. The negotiationshave been extended several times since the two first agreed toform a joint venture for this project in 2016.

Indonesia is targeting economic growth of 5.3% this year,though Finance Minister Sri Mulyani Indrawati last month reviseddown her forecast to 5.08% due to slowing global growth.

While household consumption, which accounts for more thanhalf of gross domestic product (GDP), had held up well so farthis year, investment growth had weakened.

Indrawati is preparing a bill overhauling Indonesia's taxsystem that will include a corporate tax cut to enticeinvestors. The government is also working on arelaxation of rules on restrictions in foreign ownership.(Reporting by Agustinus Beo Da CostaWriting by Gayatri Suroyo; Editing by Kim Coghill)

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