Indonesia is predicted to enjoy higher foreign direct investment (FDI) and trade volume when the ASEAN Economic Community (AEC) is implemented at the end of next year as it stands as the largest economy in the region, a professional accountants group said in recent research.
The quarterly research, titled Economic Insight: Southeast Asia, was conducted by UK-based accounting body the Institute of Chartered Accountants in England and Wales (ICAEW) in collaboration with independent UK consultant the Centre for Economic and Business Research Ltd (CEBR). The fourth-quarter research’s scope includes a focus on Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam as the leading economies in the region.
Douglas McWilliams, chief economist at the ICAEW and executive chairman at the CEBR, said the AEC aimed to increase free trade and regional integration, which would create a market situation with more open cross-border capital and workforce exchanges.
The AEC’s goal of regional interdependence has been built gradually through the ASEAN organization as the region’s intra-FDI amount grew 17 percent in 2013, higher than the 13 percent increase in 2000.
“Among its ASEAN counterparts, Indonesia recorded the highest FDI growth with 36.8 percent between 2000 and 2013,” he said in a press statement recently.
The group also emphasized that better condition of the banking system as well as legal framework may help the country to increase the FDI scale in the future. Indonesia’s realized FDI reached Rp 342.7 trillion (US$26.57 billion) between January and September this year, increased by 16.8 percent from Rp 293.3 trillion in the same period last year, according to Investment Coordinating Board (BKPM) data. —The Jakarta Post