Indonesia wants better economic ties with the US, industry minister says

Key Points
  • Indonesia's trade minister said that he was hopeful the investment climate between the U.S. and Indonesia would improve at the sidelines of the WEF ASEAN summit
  • U.S. Vice President Mike Pence visited Jakarta last month to discuss trade ties
  • The ease of doing business in Indonesia has improved substantially
Indonesia hopeful for better US trade ties: Minister

Indonesia is keen to improve economic ties with Washington after U.S. Vice President Mike Pence's April visit, Indonesia's industry minister told CNBC on Thursday.

"The U.S. has not been (a) top three investor in Indonesia in the last few years. I think the (U.S.) president or the vice president hopefully can improve the investment climate between Indonesia and the U.S.," Indonesia's Minister of Industry Airlangga Hartarto said at the WEF ASEAN summit in Phnom Penh, Cambodia.

The largest sources of foreign direct investment (FDI) inflows into Indonesia in 2016 were Singapore, Japan and China, according to data from the Indonesia Investment Coordinating Board.

An employee at work in the Toyota Motor manufacturing plant in Karawang, West Java in Indonesia on April 4, 2017.
Dasril Roszandi | NurPhoto | Getty Images

During his visit to Indonesia last month as part of his tour of Asia, Pence met with Indonesian President Joko Widodo to discuss bilateral trade ties between the U.S. and Indonesia.

Pence said that there was "room for significant progress" when it came to establishing a "free and fair" trade relationship between the two countries in an official blog post. Pence had also said that the U.S. would be working with the Indonesian government to reduce trade barriers in a bid to improve market access in Indonesia, Reuters reported.

In response, Haratarto said Indonesia was making marked improvements in making the business environment more favorable.

"I think the ease of doing business has improved in Indonesia," Hartarto said, pointing to how Indonesia placed 91 in the World Bank's ease of doing business rankings in 2016. This was 15 places higher than its position in the 2015 ranking.

"Jokowi's presidency now is committed to do a lot of deregulation to make (it easier to) do business, especially in the manufacturing sector. Now, if there is investment in the manufacturing centers ... in the industrial zone, the investor can obtain the license (in) three hours to operate the business in ... (that) area," he added.