Investor confidence in Indonesia will falter
Tuesday, January 9, 2018
Subject
Legal risks to investment in Indonesia.
Significance
The South Jakarta District Court in late November ordered US investment banking group Goldman Sachs to pay 24 million dollars in damages to property developer Benny Tjokrosaputro. He had sued Goldman Sachs in September 2016, claiming that it had sold shares which he rightfully owned. Foreign investors will be increasingly wary of Indonesia's legal system.
Impacts
- Investors will be increasingly sceptical of Jakarta's new business task force, though it is designed to support them.
- Jakarta will step up efforts to encourage foreign investment in infrastructure, despite falling confidence.
- Increases in state spending may raise corruption relating to the distribution of funds in Indonesia.
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