Foreign direct investment has now become a part of world economy. As a result of globalization, countries are now more open towards trade (exports and imports), as well as business expansion done by one particular company in foreign country towards another country in order to enlarge and expand its market and business scope, and also definitely to increase revenue and profit.
Indonesia is one of the developing country whose one of its business and economic activities is Investment. Investment activies in one particular country is meant to cultivate potential economy into a real economic power. If the domestic capital is considered insufficient, the country will seek to attract foreign capital as a complement which often possess a very important role towards nation’s economy. As mentioned on the Act 25 of 2007 about investment, Foreign Direct Investment can be done by local player using fully foreign capital, or the join venture between them and the domestic investors. The background philosophy of foreign investment policy can be indentified by tracing the constellation of political and economic influence during the period, therefore, the substance of the policy on foreign investment constantly evolving in accordance with the political and economical dynamics.
As a matter of fact, Indonesia is currently one of the hot attraction among foreign investors. Indonesia is an archipelago country which covers nearly 18,000 islands. With the population of around 270 millions people, low labour wages, tropical country where sun shines all year round, and outstanding natural resources, it surely makes Indonesia as one of the main attraction in the far east.
However, the development of foreign investment in Indonesia today often go against so much constraints resulting in the less condusive business investment climate in the country. One of the causal factor that will be discussed here is the political issues occur in
References: Act no. 25 of 2007 (Lembaran Negara Republik Indonesia No.6 of 2007) Bugiskha, Chucky Marzuki, Peter Mahmud. (2009). Penelitian Hukum, Kencana Prenada Media Group, Jakarta, Page 93 Papadopoulos, N. (2011). International market selection and segmentation: perspectives and challenges. International Marketing Review, 28(2). http://dx.doi.org/10.1108/02651331111122632 Rustanto Shamdasani, Ajay. (2013). Pervasive Corruption in Indonesia. The Jakarta Globe, April 2nd 2013, page 4