EXECUTIVE SUMMARY
Investment Climate Observation in Indonesia during 2005
The business world occupies a very important place in economic development. Starting from small/informal businesses to multinational companies, they play their role as investors both physically and non-physically and are the foundation for economic growth and prosperity. In the early stages of economic development, the government's role may be prominent, but the government's power has limits. When the economy becomes increasingly developed to encourage sustainable economic growth (sustainable), the role of the business world will become dominant. Through the added value it creates, the business world creates jobs and becomes a source of tax revenue which the government will use to build public capital goods such as infrastructure, education, health facilities and other public services. To what extent the business world can carry out its functions as mentioned above really depends on the investment climate. Although the business climate is influenced by many factors, government policies and behavior play a very important role in determining the costs, risks and competitive barriers faced by business units.
Since the beginning of mid-2005, LPEM-FEUI has carried out business climate observations every semester. The aim of this study is to produce a set of indicators that can quickly be used by policy makers to change, adapt or design new policies in accordance with the latest developments in the field. To be able to have high use value, a set of indicators should have the following characteristics: easy to understand, easy to measure regularly, covering five priority areas, namely taxation, customs, infrastructure, labor regulations and investment policy. The raw data for this study were obtained from interviews with 500 manufacturing companies randomly selected in five industrial agglomerations in Indonesia – Medan, Jabotabek, Semarang, Surabaya and Makassar.
Ari Kuncoro
Isfandiarni
Thia Jasmina
