Investment Grade and Gov’t Conduct

Indonesia got Investment Grade from Fitch Rating and Moody’s Investor on several months ago. This indicates that Indonesia is a good country to invest, especially in financial market.  After Indonesia got this achievement, should we just stay and wait investor coming? No, the gov’t should do something in term of accelerate investment, particularly from abroad. As you know, the assessment of those institution more regard in financial aspect. So that, it doesn’t astonish us if there are much investment in financial market after they assess our achievement. 

But, in the real sector, we can’t judge that we will acquire more investment, especially Foreign Direct Investment (FDI). I think that FDI is very important to enhance economy. We will not just depend on financial aspect to develop economy. But, we also realize that Indonesia more attractive in financial aspect. Many investors come and put their money in our financial market. They want to come because they assess that Indonesia give them more benefit. The high yield from gov’t bond is one factor behind Indonesia’s financial market attractiveness. There are much money that flow to our financial market, and that can be influence also into our exchange rate.

Therefore, the gov’t should do some measures to create the environment that can be embraced investor to invest in real sector. FDI must be priority of gov’t, but also doesn’t neglect financial investment. To make our environment more interesting to investor, the gov’t has to provide more and more infrastructures. I think that infrastructure determines our achievement in developing economy. The Infrastructure that is important for accelerating business are road, harbor, airport, bridge, etc. In many cases, the investment in infrastructure sector also needs cooperation between gov’t and private. So the gov’t should provide easiness to investor in building infrastructures, such as land exemption, etc.

Second, in attracting investor, the gov’t must minimize transaction cost. The high cost in doing business will undermine the intention of investor to invest. Transaction cost can be detracted by making permission process easily, especially when the outset of doing business. The gov’t also upholds discipline in its governance process that is related to business process. The corruptive and collusive conduct will create high cost economy. The businessman inclines to ingratiate public official in order to acquire privileges in doing her/his business. This conduct can undermine business process, then create bad image from other investors who don’t agree to that business process. [] 

Note: In the article above, I admit that there are many grammatical errors in which I still don’t understand well. So, I apologize for those wrong. It is important to know that I am still studying English, so this media just used to publish my work in my study process. Thank you for visiting my blog.