Investment In Indonesia Research Articles

Optimizing Regional Governance in Batam City Government-Business Entity Institutional Dualism

Introduction: The development of special areas of Batam began in the 1970s. With the support of special regulations made by the central government, Batam City becomes a competitive place for investment in Indonesia. Moreover Batam has geographical advantage because of its strategic location and adjacent to Malaysia and Singapore.Purposes of the Research: The research examines the legal framework governing the relationship between the Batam City Government and Batam Concession Agency, identifying overlap and potential conflicts, and promoting synergy with the Batam Business Entity.Methods of the Research: The study approach employed. Secondary data is used in this normative legal research strategy.Results of the Research: Research suggests that the legal structure between Batam City Government and Batam Concession Agency should promote cooperation and collaboration. In practice, overlapping jurisdiction areas might leave unclear and confusing duties and responsibilities for each entity. They were fulfilling each entity's duties. Overlapping zones can interfere with development and public services and cause institutional conflicts. The legal framework may require clarity or amendment to improve the interaction between the Batam City Government and the Batam Concession Agency. Optimize local government, for optimal local government, the law must assist the Batam City Government, and Batam Concession Agency cooperate. Batam City and Batam Concession Agency labor together cooperatively. Batam City and Batam Concession Agency collaborate.

Techno-economic feasibility study of solar photovoltaic power plant using RETScreen to achieve Indonesia energy transition

Indonesia, a key player in the global energy transition, faces surging electricity demand and ambitious renewable energy goals. In response, the government introduced a new regulation about renewable energy tariffs, including tariffs for photovoltaic (PV). However, there remains a gap in the academic literature regarding PV power plant feasibility studies under these tariffs. To address this gap, this study investigates the feasibility of a utility-scale solar photovoltaic (PV) power plant in Indonesia, focusing on the newly implemented renewable energy tariffs based on Independent Power Producers (IPPs) and Indonesia's state-owned electricity company (PLN) perspectives. Five scenarios were developed based on the proposed 26 MW solar power plant on Nias Island utilizing RETScreen software. The results showed that based on the IPP perspective, the newly implemented renewable energy tariff was inadequate to make the project feasible, however, an introduction of a 10 USD/t CO2 emission incentive would make the project financially viable for IPPs. Therefore, it is recommended to introduce emission incentives as a strategic approach to attract investors and stimulate investment in Indonesia's PV power plants market, to accelerate Indonesia's energy transition. Conversely, the results also showed that the project is very profitable for PLN due to the significant cost-savings from the de-dieselization, leading to a reduction in the average generation cost for Nias.

Economic Policy Uncertainty and Bank Credit Growth in Indonesia

Objective: This study examines the influence of economic policy uncertainty in countries with the largest capital investments in Indonesia, such as Singapore, China, Hong Kong, Japan, the United States, Korea, and the United Kingdom, on the credit growth of commercial banks in Indonesia. Design/Methods/Approach: The sample of this study is all commercial banks in Indonesia from January 2011 to December 2022. This study uses a quantitative approach, using monthly aggregate data on credit growth of commercial banks in Indonesia and economic policy uncertainty data for each country. Hence, the number of observations in this study amounts to 144. This study uses multiple linear regression with the EViews 12 analysis tool. Findings: The findings in this study show that the influence of economic policy uncertainty in the country with the largest capital investment in Indonesia has various influences. Of the several countries that were observed in the study, Japan was one of the countries that had a significant negative impact on the growth of commercial bank credit in Indonesia. Originality/Value: This study complements several previous studies regarding the impact of economic policy uncertainty on Indonesia's micro and macro economy. Studies regarding the impact of economic policy uncertainty on Indonesia's banking credit growth are still limited. Practical/Policy implication: The findings of this study can be used as a reference for banking managers when making decisions such as credit portfolio diversification. By spreading exposure to various sectors and industries, banks can reduce risks related to economic uncertainty in specific sectors. Banking managers need to design products and services that are more creative and adaptive to help banks remain competitive and attract customer interest amidst an uncertain economic situation.

Nickel Price Projection Using Multivariate Regression Method and Investment Feasibility Analysis of Nickel Mining in Indonesia with Sensitivity Analysis and Monte Carlo

Nickel is one of the metals commonly used in various industries. Indonesia is one of the countries that has the largest nickel reserves in the world. Nickel prices will be formed through an equilibrium mechanism between production supply and nickel demand. This study will analyse the relationship between nickel price formation, supply, and demand. Nickel prices will also affect the feasibility of nickel mining investment in Indonesia. The data used in this study consists of market data derived from historical reports of the last 5 – 12 years (2010 – 2022) and mining plan assumptions derived from benchmarks with similar industries. The methods used in this analysis are multivariate regression, discounted cash flow, sensitivity analysis, and Monte Carlo simulation. The results of the analysis that have been carried out show the relationship between nickel supply and demand with prices, with estimated nickel price projection ranging from $16,750 / Ton – to $18,927 / Ton. The factors that most influence the feasibility of mining investment are nickel price, sales realization, water content, contractor costs, and fuel costs. The risk of nickel mining investment in Indonesia based on Monte Carlo simulations is estimated at around 11.36%. This shows that nickel mining investment in Indonesia is still very attractive.

MODELING FACTORS AFFECTING EDUCATED UNEMPLOYMENT ON JAVA ISLAND USING GEOGRAPHICALLY WEIGHTED POISSON REGRESSION MODEL

The eighth goal of the SDGs, which aim to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all, addresses the problem of unemployment. Indonesia, the fourth-largest country in the world, keeps on dealing with unemployment and its negative consequences. Three provinces on the island of Java have higher unemployment rates for educated people than any other provinces. The purpose of this study is to examine the variables affecting educated unemployment in Java. This study uses cross-sectional data published from BPS-Statistics Indonesia website and the Indonesia Investment Coordinating Board (BKPM) for 119 regencies/cities across six provinces on Java Island in 2021. The predictor variables are Gross Regional Domestic Product (GRDP), investment, labor force participation rate, mean years of schooling, regency/city minimum wage, and inflation. The number of working-age population is used as an exposure measure. Four models were used to analyze the factors affecting educated unemployment on Java Island: Poisson regression model and Geographically Weighted Poisson Regression (GWPR) model, both with and without an exposure. Based on the smallest AIC/AICc, the best model is the GWPR model with an exposure. This model creates 11 groups of locations based on the same predictor variables that significantly affect educated unemployment

COVID-19 AND THE DECLINE IN INVESTMENT IN WEST NUSA TENGGARA: INDONESIA

This research examines the effects of the COVID-19 pandemic on investment in West Nusa Tenggara (NTB), Indonesia. Using a combination of quantitative data from the Republic of Indonesia's Investment Coordinating Board and qualitative data from the Head of the Office of Investment and One Stop Integrated Services, the study investigates investment realization by district and city, sector, and investor's country of origin. The analysis reveals that even prior to the COVID-19 outbreak, investment levels in NTB were declining due to a series of natural disasters, including an earthquake in 2018. The pandemic further exacerbated the decline in investment, with many investors opting to delay their investments in the region. However, some sectors such as mining, tourism, and transportation showed improvements during the period. The findings highlight the challenges faced by West Nusa Tenggara in attracting investment and achieving regional development goals. The study emphasizes the importance of understanding a region's potential and creating favorable investment conditions to stimulate economic growth. Keywords: Covid-19, Investment, NTB

Indonesia and ASEAN Chairmanship in 2023: Leading the Region in Strengthening Relations with China

Indonesia, the largest economy in Southeast Asia, plays a crucial role in the region and contributes significantly to the regional bloc's stability, economic growth, and diplomatic initiatives. The archipelago serves as a pivotal anchor within the Association of Southeast Asian Nations (ASEAN), stipulating political leadership and strategic direction over the years. Indonesia fosters trade and investment within the region, as seen from Indonesia's role in completing the Regional Comprehensive Economic Partnership (RCEP) negotiation, the largest free trade agreement in the world involving ASEAN and several trading partners such as China, Japan and South Korea (The ASEAN Secretariat, 2023). Indonesia promotes dialogue and cooperation to address regional challenges such as trans-boundary issues, security concerns, and environmental sustainability. Indonesia is also currently one of China’s most important partners in Southeast Asia. China is now Indonesia's largest trading partner and export market, with China's official data showing that in 2022 the bilateral trade reached $149.1 billion, up 19.8 percent year-on-year. In the same year, China was the second-largest source of investment in Indonesia in 2022, with $8.2 billion (Duqiang, 2023). In addition, China's Belt and Road Initiative (BRI) has played a major role in supporting infrastructure development in Indonesia. Both nations continue to engage in high-level diplomatic dialogue and seek common ground on various regional and global issues. This article attempts to show the role that Indonesia plays as it continues to show the way for other ASEAN countries to navigate economic challenges and, at the same time, forge stronger ties with China. This article also examines the bilateral relationship between Indonesia and China and how it affects Indonesia’s capability to lead other ASEAN countries, especially after Indonesia’s ASEAN Chairmanship in 2023.

Legal Protection for Foreign Investments Aligned with the Second Principle of Pancasila: A Scholarly Exploration

Foreign Direct Investment (FDI) plays a crucial role in a country's economic advancement. This research focuses on assessing the legal protection afforded to FDI, with a specific emphasis on applying the second principle of Pancasila, "Just and Civilized Humanity." The goal is to ensure sustainability, respect for human rights, and active participation in foreign investments in Indonesia. The research adopts a normative legal approach, analyzing key legal documents and regulations, including Law Number 25 of 2007. The evaluation encompasses procedures and policies aimed at preserving FDI in Indonesia. The research findings highlight the significant influence of the second principle of Pancasila in establishing a legal and moral framework for the protection of FDI. This principle underscores the importance of fair and dignified treatment for all individuals, including foreign investors. These principles are explicitly outlined in Law Number 25 of 2007, which delineates the rights and responsibilities of foreign investments, advocates for equal treatment, and supports sustainable and equitable economic growth. However, challenges in implementing legal protection for FDI persist, including discrepancies in legal interpretation, bureaucratic complexities, and shifts in government policies. Addressing these issues is crucial to fostering a conducive environment for foreign investments and aligning with the ideals of Pancasila for just and civilized humanity.

THE EFFECT OF BOND RATING, DEBT TO EQUITY RATIO, LIQUIDITY, AND SBI INTEREST RATES ON CORPORATE BOND YIELD TO MATURITY

Judging from Indonesia's investment opportunities every year, the average investment opportunity has increased from year to year. This proves that Indonesia's investment activities should be given primary attention, both when the country's economy is deteriorating and when the country's economy is improving. The aim of this research isto determine the development of bond ratings, debt to equity ratio, liquidity, SBI interest rates on the yield to maturity of corporate bonds listed on the IDX for the 2017-2021 period and to determine the influence of bond ratings, debt to equity ratio, liquidity, SBI interest rates partially and simultaneously on the yield to maturity of corporate bonds.The analytical method used is the descriptive method and verification method with a sample of 7 companies. The results show that partially the bond rating and SBI interest rate variables have a positive and significant effect on yield to maturity, while the debt to equity ratio and liquidity variables have no significant effect on yield to maturity and simultaneously there is at least one independent bond rating variable, debt to Equity ratio, liquidity and SBI interest rates influence the yield to maturity of corporate bonds. This conclusion provides important insight into the factors that can influence the yield to maturity of corporate bonds on the IDX, which can be a guide for market players and companies in making financial decisions.

IMPLIKASI KEBIJAKAN INVESTASI ASING DALAM UU CIPTA KERJA TERHADAP UMKM

This research aims to analyze the implications of investment in the Omnibus law Undang-Undang Cipta Kerja on the competition of micro, small, and medium enterprises (UMKM) sector in Indonesia. The method used is a literature study by collecting data from various reliable sources. The results show that the Omnibus law Undang-Undang Cipta Kerja has significant implications for business and investment in Indonesia, including for the UMKM sector. The law aims to create a quality business and investment climate for businesses, including UMKM and foreign investors. However, some critics argue that the law may lead to a concentration of economic power in the hands of large corporations and reduce opportunities for small and medium-sized businesses. The implications of investment in the Omnibus law Undang-Undang Cipta Kerja need to be carefully considered to ensure that the UMKM sector can compete fairly and sustainably in an increasingly competitive market.

The effect of financial literacy on Gen-Z crypto investment decision through herding behavior as mediator

The progression of investment in Indonesia has witnessed rapid growth, particularly in the realm of crypto assets. By April 2023, the number of crypto investors in Indonesia had surged to 17 million, with the Gen Z cohort dominating this category of asset investors. The primary objective of this research is to examine whether herding behavior can mediate the relationship between financial literacy and crypto investment decisions among Gen Z individuals. This investigation was conducted among crypto investors residing in the city of Bengkulu. A total of 156 individuals were selected as the sample. The collected data was subsequently processed using the Smart PLS 3 application. The research findings indicate that financial literacy has a significantly positive influence on herding, and financial literacy also has a significantly positive impact on the crypto investment decisions of Gen Z. Moreover, herding serves as a mediating factor in the relationship between financial literacy and Gen Z's crypto investment decisions.

Analysis of Factors that Influence Investor Interest in Investing in Islamic Mutual Funds (Case Study: Java Island Region)

Sharia mutual fund investment in Indonesia continued to experience positive developments as an investment instrument. However, the fact was that the nav of Islamic mutual funds was still unable to closed the gaped with the total nav of conventional capital markets as a whole. The purpose of this studied was to analyze the factors that influence investors' decisions in investing in Islamic mutual funds. The method used in this researched was sem-pls. Respondent criteria in this studied was sharia mutual fund investors and domiciled in a province on the island of java. The theoretical approached in this studied was the theory of planned behavior with variabels of motivation, knowledge, re-perception, technological advances, and product information. The results of this studied indicate that the variabels motivation, knowledge, perceived returned, advances in technology, and product information had a positive and significant influence on investment intentions. The results of this studied could been used by securities companies and regulators to increase the number of investors or planning policies regarding Islamic mutual funds.
 
 Keywords: Investment, Capital Market, Investor Interest, Sharia Mutual Funds.

The Constitutional Relationships Mandate Regarding the Implementation of Oil and Gas Investments in Indonesia

The meeting of interests between the Government of Indonesia (cq. The Unitary State of the Republic of Indonesia) and investors in the field of oil and gas investment in Indonesia is a meeting with relatively different final objectives, but business cooperation that complements each other creates synergies, and is mutually beneficial for each other’s interests, according to a mutually agreed-upon agreement or contract. This study will investigate the relationship between Indonesian constitutional mandates and the implementation of oil and gas investments. According to the 1945 Constitution of the Republic of Indonesia and Pancasila, the study demonstrates that natural resources (SDA) are capital for national economic development. Based on Pancasila and the 1945 Constitution of the Republic of Indonesia, the development of the national economy is a part of the endeavor to realize the just and prosperous welfare of the people.
 Keywords: constitution, national economy, oil, gas

The Role of the Financial Services Authority (OJK) in Overcoming Illegal Investment Cases According to the Capital Market Law

Illegal investment is an investment that does not have legal permission from the state for the investment you want to make. Illegal investment often occurs in developing countries, one of which is Indonesia. This illegal investment tends to occur more frequently in developing countries compared to developed countries. In Indonesia, the institution responsible for illegal investments is the Financial Services Authority (OJK). As a result of the rise in illegal investment, it can lead to fraudulent or fictitious investment. If this happens, it is certain that the victim will not get their money back because the investment service provider has been aiming to deceive people from the start. The OJK's authority to deal with illegal investments in Indonesia is contained in Law number 21 of 2011 concerning the Financial Services Authority, where the OJK has the authority and duties of the OJK in supervising financial services institutions in the capital markets sector.

Leveraging consumer behavior and macroeconomic factors to increase real estate investment potential

The Indonesian real estate market has shown promising development in recent years, attracting investors seeking lucrative opportunities. This research aims to increase the success rate of real estate investments in Indonesia by examining the connection between macroeconomic factors and consumer behavior. This study employs vector autoregression (VAR) models to investigate the influence of macroeconomic data on the Indonesian house price index (HPI). We intend to determine the primary determinants of the HPI by analyzing various macroeconomic indicators, including GDP growth, CPI, crude oil, interest rates, and the unemployment rate. In addition, the research investigates the role of consumer behavior in Indonesian real estate searches. Real estate developers and investors can gain valuable insight into the effect of consumer preferences, motivations, and decision-making processes on demand functions by understanding consumer preferences, incentives, and decision-making processes. A comprehensive analysis of historical data and econometric modeling techniques are employed to accomplish research objectives. The research is conducted using pertinent macroeconomic indicators, real estate market data, and consumer surveys.

Public and publicly guaranteed external debt, debt servicing and investment in emerging economies

The global financial crisis of 2007 gave a major boost to the debt-investment nexus debate given the astronomical growth in external debt and its associated debt servicing burdens, which constrain the fiscal space of many developed and emerging economies. Hence, this study examined the effect of external debt and debt servicing on investment in MINT countries for the period, 1990-2021 using the FMOLS estimation technique. The results show that external debt adversely affects investment in Indonesia but stimulates investment in T?rkiye while debt servicing has a catastrophic effect on investment in Indonesia and T?rkiye but enhances investment in Nigeria. Overall, the effect of external debt and debt servicing on investment in MINT countries are mixed. Hence, the policymakers in each country need to put measures in place to foster debt sustainability, ensure effective domestic resource mobilisation for investment purposes and promote debt transparency by adopting effective debt management practices.

Balancing Investment Protection and Regulatory Chill: How Indonesian Investment Agreements Impact the Regulation and Enforcement of Mining Licenses

Balancing Investment Protection and Regulatory Chill: How Indonesian Investment Agreements Impact the Regulation and Enforcement of Mining Licenses

Impact of ESG Implementation on Financial Performance and Capital Structure

The realization of investments in Indonesia has surpassed 23.3% of the targeted amount for the year 2023, indicating a gradual economic recovery. This creates an opportunity for companies to attract more investors. The high level of investment is followed by certain responsibilities named Environmental, Social, and Governance (ESG) within their operational businesses. The implementation of ESG in Indonesia is further supported by the Indonesia Government through the Financial Services Authority Regulation No. 51/POJK.03/0217 and the establishment of the Carbon Exchange regulation in 2023. The objective of this study is to discern the influence of company ESG scores on companies’ performance, measured through ROE and its capital structured, measured by DER. ESG data were obtained through access to Refinitiv Eikon, incorporating data from all sub-points within the three ESG aspects. The study population is companies listed on the Kompas100 index. Under the purposive sampling method, twenty-six companies have disclosed their ESG and financial data for the year 2017-2022. Statistical processing of data was conducted using SEM-PLS. The study concludes that E, S, and G scores individually influence ROE but do not have any significant impact on DER. This study offers insight to assist companies in formulating ESG implementation strategies, with a focus on environmental innovation for E aspect, product responsibility for the S aspect, and shareholder considerations for the G aspect.

Green Sukuk in Indonesia: Unraveling Legal Frameworks for Sustainable Islamic Bonds

Green sukuk is a contemporary-era sharia investment revolution that accommodates environmental aspects. Integrating Sustainable Financing in green sukuk can be an alternative investment platform contributing to sustainable development. The concept paradigm is relevant for strengthening the proportional construction of green sukuk law in Indonesia. The study aimed to analyze the concept of sustainable financing as the legal basis for implementing green sukuk in supporting sustainable development programs in Indonesia. The study used normative legal research methods. This research approach used a conceptual approach through reasoning the concepts of sustainable financing, green sukuk, and other concepts relevant to the topic of study to strengthen the discussion argument. The study showed that there are 2 (two) components of the relevance of the Sustainable Financing paradigm as the basis for implementing green sukuk in Indonesia. First, the implementation of green sukuk in various countries has rules that accommodate sustainable financing in response to climate change problems. Second, the sustainable financing Paradigm is relevant as a source of green sukuk legal construction to strengthen the policy basis for implementing environmentally sound investment in Indonesia. The urgency of the regulation is to increase investment commitments that can increase environmental resilience, alleviation of social problems and business transparency in contributing to sustainable development in Indonesia.

The Impact of Macroeconomic Factors on Foreign Direct Investment in Indonesia from 2007 To 2022: A Vector Error Correction Model (VECM) Approach

This study will examine the impact of macroeconomic factors on FDI. The gap in this study lies in the significant changes in economic conditions and investment policies in Indonesia since 2007, which previous studies have not fully explained. The possibility of new factors affecting FDI flows requires more sophisticated analyses. In addition, the relevance of internalized investment theory in the current context of economic globalization has not been widely explored in FDI research in Indonesia. This study uses Secondary time series data and quantitative research techniques. Quarterly data from 2007 to 2022 is the data set used. The research employs the Vector Error Correction Model data analysis technique, with a significance level of 5%. The findings indicate that the exchange rate has an insignificantly negative short-term impact on FDI and a significant negative long-term impact. Then, inflation has a short-term positive and insignificant impact on FDI but a significant negative in the long term. Meanwhile, the interest rate has a significant positive effect on FDI in the long term, but in the short term, it has a negative and insignificant effect.