Updated 6:02 PM EDT, Wed, Apr 01, 2020

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Widodo Taps Regional Commodities to Attract Investors

Joko Widodo

(Photo : REUTERS/BEAWIHARTA) Indonesia's President-elect Joko Widodo looks on after a ceremony inaugurating a new parliament in Jakarta, October 1, 2014.

Indonesian President Joko Widodo is firm on keeping the country's investment growth uninterrupted. A report from Indonesia's Statistics Bureau showed unstable numbers for Southeast Asia's biggest economy.

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Recent data revealed a 16.9 percent increase on total investments year-on-year, but its economy grew only by 4.7 percent, slightly lower than last year's 5.02 percent. Although it missed its goal of 5.4 to 5.7 percent this year, the government is confident that the numbers will climb in the next quarters because of greater spending on infrastructure, according to Coordinating Minister for Economic Affairs SofyanDjalil in a post by Bloomberg.

"Total investment growth is expected to stay above 16 percent from April to June as tax incentives lure projects, with a 2015 target for 519.5 trillion rupiah," said Franky Sibarani, head of the Indonesia Investment Coordinating Board.

Widodo is now tapping district governments to highlight their own commodities to attract investors.

"It is very important for the district government to develop their respective regional identity and character to attract investors to invest," Widodo said at the Indonesian Association of District Governments' International Trade and Investment Summit 2015.

He emphasized the importance of promoting the districts' native products, adding that trade and investments are key to regional development.

Widodo's statement solidified his purpose to make the country's commodities centered domestically. 2014 saw Widodo's unwavering decision to keep the Indonesian ore ban in place, disappointing the international community that hopes to lift the policy prohibiting the exportation of unprocessed ore.

As the world's largest laterite nickel ore supplier in the world, the ore ban shook the global supply chain when it was first implemented in January 2014 by Widodo's predecessor Susilo Bambang Yudhoyono. It propelled nickel prices to record-high numbers as steel makers, whose main ingredient is ore, clamor to find alternative suppliers.

Investors initially zeroed in on the Philippines as the second largest ore producer in the world, but its low quality ore is not enough to fill the gap Indonesia left. Now, small companies such as Amur Minerals Corporation (London AIM: AMC) are taking the spotlight to help the ailing supply.

Amur Minerals' flagship Kun-Manie Project, situated at the Amur Oblast region in Far Eastern Russia, is projected to produce 90.2 million tons of high-grade nickel ore. As one of the top 20 largest nickel sulfide deposits in the world, the Kun-Manie project has been attracting investors that want to take advantage of the looming supply deficit. Amur is on the last step of acquiring its exploration and production license as it is already under review of Russian Prime Minister Dmitry Medvedev.

The controversial reforms by Indonesia's current administration have been drawing mixed reactions from investors and local and foreign businesses. But all these are directed towards a promise Widodo made during his campaign: to deliver a 7 percent economic growth by the end of his term. 

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