Indonesia's Improved Rating Attracts Foreign Investors

International rating agency Fitch's upgrade of Indonesia's outlook from "stable" to "positive" has sparked interest among foreign investors, including those looking to buy securities issued by Indonesian companies. Bank Indonesia Senior Deputy Governor Miranda Goeltom said the upgraded rating will induce companies to invest in Indonesia and boost market interest. The positive outlook is attributed to Indonesia's successful direct presidential election, where presidential candidate Susilo Bambang Yudhoyono secured 61% of the votes.

Key Takeaways:

• The upgrade in Indonesia's rating is expected to attract foreign investors, including those looking to buy securities issued by Indonesian companies.
• The country's successful direct presidential election is cited as a key factor in the positive outlook, with President Susilo Bambang Yudhoyono securing 61% of the votes.
• Fitch has highlighted the need for the new government to issue credible policies, including reforms in labor and security policies, to further improve the investment climate.
• The agency also emphasizes the importance of reducing unemployment and social unrest, achieved by reaching an economic growth rate of 6-7% and improving the investment climate.
• President Megawati has achieved macro-economic stability, but has not yet succeeded in structural changes to achieve the desired economic growth rate.
• The government's debt ratio against its GNP has decreased from 100% in 2000 to 68% this year.
• Fitch has suggested that to achieve the goals of economic growth and reducing unemployment and social unrest, the government must improve the investment climate, its legal system, prevent corruption and strengthen the financial sector.

Statistics:

• Indonesia's rating upgrade from "stable" to "positive" is expected to attract foreign investors.
• 61% of the votes were secured by presidential candidate Susilo Bambang Yudhoyono in the election.
• The government's debt ratio has decreased from 100% in 2000 to 68% in the current year.
• Indonesia's economic growth rate has been cited as 6-7% as the desired target.
• The country has successfully held its first-ever direct presidential election.
• 39% of the votes were collected by incumbent President Megawati Soekarnoputri in the election.
• The Democrats Party, which nominated Susilo, controlled 10% of the seats in the House of Representatives.

Sources:

• Fitch (no date)
• [Bank Indonesia Senior Deputy Governor Miranda Goeltom (no date)]
• Antara (October 7, 2004)