European businesses operating in Indonesia have become increasingly concerned about security risks in the country, a recent joint survey by European business chambers has revealed.
The survey was compiled in the 2019 Business Confidence Index, which concludes that 60 per cent of the respondents are still upbeat about Indonesia’s business momentum.
Beyond the usual issues such as red tape and the market climate, 28 per cent of businesses surveyed expressed their concerns about social stability issues, particularly security.
This percentage was more than double last year’s figure, when only 13 per cent of businesses were worried about it.
Nick Holder, the honorary secretary of the British Chamber of Commerce (BritCham) in Indonesia, noted that the survey had taken place in May, when the whole country was plunged into political tensions that peaked in the May 21-22 riot in Jakarta, which cost the lives of eight people.
The riot happened amid protests against the presidential election result, in which the General Elections Commission named President Joko “Jokowi” Widodo the winner.
“We come back to perceptions of the people who live here and people from outside of Indonesia, who perhaps have taken decisions about locating investments,” Holder told reporters last week.
The index pointed that European investment is spreading more across the archipelago. Expansion in Sumatra and Sulawesi, in particular, has increased by 38 per cent and 29 per cent, respectively, much higher than in Java, which averaged only 15 per cent.
However, Holder said there was no direct connection between the spread in investment and the increasing concern.
“I don’t think the [security] risk is higher particularly here more than in other countries,” he said.