rfmcdonald | [LINK] "Indonesia Tops Southeast Asia Luring New Factories, Survey Shows" (Reply)

Bloomberg's Sharon Chen describes Indonesia's success, at least relative to its neighbours.

Indonesia will attract more new factories than any other Southeast Asian nation over the next few years, a survey of 75 manufacturers showed, bolstering President Joko Widodo’s drive to revitalize the economy.

Manufacturers plan to build 54 new plants in Southeast Asia’s biggest economy by 2019, a 68 percent increase that will allow Indonesia to overtake Malaysia and Thailand with 133 factories in total, according to the Economist Intelligence Unit survey sponsored by Baker & McKenzie and CIMB Group Holdings Bhd. The companies all currently produce goods in the region.

Widodo, known as Jokowi, has overhauled fuel subsidies to free up budget funds for infrastructure, pledging to spur investment and boost an economy growing at the slowest pace since 2009. Many companies are starting to implement their expansion plans in Indonesia after last year’s election that brought the president to power, said Mochamad Fachri, a lawyer with Hadiputranto, Hadinoto & Partners, Baker & McKenzie’s member firm in Indonesia.

“They believe that the transfer of power has been successful” and the government has shown its commitment to reforming public finances by changing fuel subsidies, he said, referring to the law firm’s clients. “Therefore, the timing is good for putting these expansion plans in place.”

The manufacturers’ plans add to signs of investor confidence in Indonesia. The benchmark Jakarta Composite Index (JCI) of stocks has climbed more than 3 percent since Jokowi’s inauguration on Oct. 20, outperforming markets in Thailand and Malaysia on optimism the president will improve the economy.