Indonesia has infinite investment potential for Italy

(AGI) Milan, Dec 21 - Indonesia has over 250 million inhabitants distributed over a territory of almost two million square kilometers spread over 17,500 islands that make up the world's largest insular state. It ranks 15th in terms of territory and has the world's fourth-largest population. "These figures are sufficient to understand the strategic relevance of Indonesia and its importance for Italy and its companies as it represents a market with an infinite potential," said Luigi Carlo Gastel, the president of the Italian Business Association in Indonesia (IBAI), a long-time manager of Pirelli who has been living in the country for over 30 years. He added: "In addition to evident reasons of demographics and the endless opportunities offered by such a large state rich in raw materials, Italian investors can take advantage of a fast growing economy which, during the last few years, has seen its GDP increase at an annual rate of 5-7 percent." The country's growth has had a positive fallout on local populations, with per capita GNP at around 5,000 dollars a year and domestic consumptions recording a 30 percent annual rise. "It represents a windfall potential for Italian small and medium-sized enterprises that comprise the backbone of Italy's economy," said Mr Gastel. Some problems exist, however, such as the "excessive redtape of Indonesia's public administration, insufficient infrastructures and the instability of the local currency, the rupee, which was devalued by 35 percent against the dollar during the last 12 months," he said. These problems are being tackled by Jakarta with measures and policies aimed at "streamlining the administration machine", in addition to the recently adopted "infrastructure investment plan allocating 4.5 billion over the next five years". This in and of itself represents an opportunity for Italian construction and engineering companies, said Mr Gastel. He went on to recall Jakarta's recently passed policies to detax and promote foreign investments in the local economy's most strategic sectors: manufacturing, agriculture, finance and energy, all sectors in which Italian companies could play a leading role. Mr Gastel went on: "In Indonesia we are paying the price of a historic delay compared to other countries like Japan, Germany or the Netherlands. In order to make up for lost time, we would need a greater and more incisive effort by Italy's whole economic system, also because producing and operating in Indonesia, in addition to its immense domestic market, would also entail operating in a hub that gives access to the whole ASEAN, the Association of Southeast Asian Nations, a macro-area inhabited by over half a billion people. The recent visit to Indonesia last november by the President of the Italian Republic, Sergio Mattarella, and the signing of several agreements undoubtedly galvanised the long-standing friendship between the two countries." This also bears witness to the fact that Italy was among the first nations in the world to recognise Indonesia's independence in 1949 and to establish diplomatic relations with the newly formed country. (AGI) . .