The ARISE+ Indonesia project is helping to identify sectors that can bring most benefits to Indonesia and which are most attractive to investors.
ARISE+ Indonesia has engaged the services of an investment expert to undertake a Sector Prioritisation Study (SPS) in September 2019. The SPS will help the government of Indonesia (GoI) focus its planning to attract more foreign direct investment (FDI).
Sixteen sectors were assessed from two key perspectives, using a number of factors:
Perspective 1: Benefits to Indonesia, with factors including contribution to gross domestic product (GDP) growth, employment creation, employment for women, technology / know-how transfer, raising productivity and boosting exports.
Perspective 2: Attractiveness to investors, with factors including: market potential, labour & skills, market access, regulatory environment, existing capabilities, local inputs, infrastructure and the fiscal regime.
The different factors were assessed and scored for each sector, in order to determine the respective strengths or weaknesses of the 16 sectors identified. As a result, eight sectors were identified as ‘tier 1’ sectors, having both; highest potential benefits to Indonesia and the most attractive to investors. Eight more sectors were identified as ‘tier 2’ sectors, for which there are high potential benefits to Indonesia, but with lower attractiveness to investors and are not as strong or competitive as they could or should be. Tier 2 sectors require a more enabling environment and needs further policy support. The GoI will need to work closely with the private sector to realise Indonesia’s full investment potential.
TIER 1 PRIORITY SECTORS
TIER 2 HIGH POTENTIAL SECTORS
