VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

The weakening of the rupiah against the US dollar which has penetrated the level of Rp 14,000 per US dollar poses some problems for the Indonesian economy. One of which is that foreign investors run away from Indonesia to the countries which are considered to have better condition than Indonesia. However, the runaway of the investors doesn’t need to be worried too much. Because, some other countries that become investors’ favorite destinations also experience similar conditions with Indonesia. This was disclosed by Head of Center for Economic and Public Policy Studies of Gadjah Mada University (UGM), Yogyakarta, Tony Prasetiantono in a discussion held by a private radio in Jakarta recently.

“Actually, the strengthening of US dollar is counterproductive. So, I'm sure it will be corrected. Then, the second conviction is that if the investors run away from Indonesia, yes they go. But after they run away, they don’t know the country where to go. They go to the USA or China. But finally, some of them are back to Indonesia. Believe me, it just takes time. Because the situation is currently unfavorable. The important thing is that they escape first from Indonesia. But after they know where to go, any investment options or country destinations also have the same problems. So in my opinion, Indonesia is still favorite as I said before,” said Tony Prasetiatono.

Tony Prasetiatono further said that Indonesia still remains a favorite country for foreign investors because it has pretty good fundamentals. These fundamentals include inflation, deficit of state budget, and economic growth. However, something to be watched out by the government is that there are fewer surpluses gained from the export activities of Indonesia and the Foreign Direct Investment (FDI) is dominated by hot money or short-term capital flows. Therefore, the government is asked to immediately intervene against the weakening of the rupiah. (VOI/Rezha/RHM)