The Investment Coordi-|nating Board (BKPM) says Indonesia remains attractive to foreign investors and is maintaining an optimistic investment outlook for next year, eyeing tourism as the key contributor to investment growth.
BKPM chief Thomas Lembong said recently that his office was confident that the realised investment target of 592 trillion rupiah (Bt1.6 trillion) would be met this year, so a larger goal could be set for 2017.
One of the major sectors expected to boost cash inflows was tourism as foreign investors had reportedly expressed the most interest in tapping into Indonesia’s underdeveloped yet promising tourism sector.
“Luckily, tourism shone in the eyes of several investors who came to Jakarta for the Forbes Global Conference,” he said.
Indonesia, the world’s biggest archipelago with more than 17,000 islands, is seeking to |spur significant growth in the tourism industry in an attempt to lure 20 million tourists a year by 2019, nearly double the current figure of around 12 million per year.
To attract people, particularly those who only holiday on the world’s most visited island of Bali, to other scenic spots, the government is working on developing 10 other destinations, including Lake Toba in North Sumatra, Borobudur Temple in Central Java and Thousands Islands in Jakarta.
The World Bank’s latest Indonesia “Economic Quarterly Report” declared that tourism was a promising field that could generate significant private investment for the nation.
In the first half of this year, Indonesia received US$858.7 million (Bt30.6 billion) as investment poured into the industry.
Besides tourism, other areas that BKPM will rely on to raise investment are the basic |metal and petrochemical industries, both of which form the backbone of domestic industry, he said.
BKPM may roll out more measures to lure investment soon, but plans were still being discussed with the offices of coordinating ministers and the president.
“From the BKPM’s side, what we can do is sort out issues relating to regional administrations,” he said.

Investments being boosted
“I have already spoken to the Home Ministry, which holds power over the regional bodies, so that the BKPM’s technical requests can be fulfilled to boost investment in those areas.”
In the past two years, the investment body has launched several initiatives to improve its service to potential investors, most notably one-stop integrated service centres to ease the process of applying for a business permit.
Around 453 trillion rupiah in investment has been realised in Southeast Asia’s largest economy from January to September, up 13.4 per cent from 2015.
The figure consists of 295 trillion rupiah of foreign investment and 158 trillion rupiah in domestic investment, increases of 10.6 per cent and 18.8 per cent from the past year.
Another sector that can |help attract investment and |will be looked at after |the next year is the creative economy industry, which Creative Economy Agency chairman Triawan Munaf called an excellent contributor to Indonesia’s gross domestic product growth.
One aspect of the creative economy that will be focused on is the increasing number of cinemas in Indonesia.
“It remains a lucrative part |of the creative economy. The prevalence of cinemas boosts the film industry as well,” Triawan said.

To discourage the trading of non-deliverable forwards offshore, the central bank has announced several initiatives to liberalise and deregulate the onshore ringgit-hedging market.
They include providing market participants the flexibility to hedge their US dollar and Chinese yuan exposures up to a limit of 6 million ringgit (Bt48 million) per client per bank, allowing resident and non-resident fund managers to manage foreign-exchange exposures of up to 25 per cent of their invested assets, and to broaden accessibility by foreign investors and corporations to the onshore forex market via the appointed overseas office framework.
There are also measures to streamline equal treatment for residents with ringgit borrowings investing in foreign-currency assets in the offshore and onshore markets as well as to refine the retention of export proceeds with incentives such as paying a special deposit rate of 3.25 per cent on converting export proceeds into the ringgit account.
This facility will be offered until December 31, 2017, subject to further review.
These measures are expected to help enhance the continuous supply of foreign currency in measured steps to create a liquid and deep onshore forex market.
A deep and liquid forex market is a precondition to developing a well-functioning onshore market to facilitate greater hedging flexibility to minimise exchange-rate risk.
The measure that requires exporters to retain up to 25 per cent of export proceeds in foreign currency, effective immediately, is a refinement from the “no retention limit” in the foreign-currency account, which has been in place since March 23, 2005.
The new measure does not apply to existing foreign-currency balances. It applies to export proceeds received after yesterday. The rule requiring all export proceeds to be repatriated to Malaysia within six months from the date of export remains in place.
This measure should not be perceived as a restriction to trade, as some flexibility will be given if exporters may want to hold higher balances subject to approval from Bank Negara Malaysia.
They can also manage the exchange-rate risk through hedging and un-hedging up to six months of their foreign-currency obligations.
A sweetener in the form of a higher rate of return of 3.25 per cent is offered to exporters placing the ringgit proceeds, to partly compensate for the cost associated with the lower retention of export proceeds in foreign currency.
While some view this measure as a step backwards, imposing a limit on the retaining of foreign currency is justified and warranted given the worsening imbalances in the forex market, if not a timely nip in the bud, will seriously constrain the development of a viable onshore forex market through ensuring continuous liquidity of foreign currency.
Despite enjoying strong trade surpluses over the years, only a small fraction of 1 per cent of the total accumulated surplus was converted to ringgit from 2011-15, down from 28 per cent during 2008-10.
This unhealthy trend does not bode well for the ringgit and for reserves accumulation.
The trade surplus is a dependable contributor to reserves accumulation compared to other forms of capital flows, especially portfolio money, which is highly susceptible to reversals.
Rebalancing of the foreign currency in the forex market is vital given Malaysia’s sizeable trade volume and value. This will provide a big pool of forex to facilitate greater trade and investment.

MARVELSTONE, which moved its headquarters from Hong Kong to Singapore this year, is behind the not-for-profit fintech hub Lattice80.
With just a laptop, two spare shirts and S$500 (Bt12,500) in his pocket, young South Korean Joe Cho packed his bags and headed to Singapore 12 years ago.
He quickly fell in love with the nation and a Singapore girl he later married. Together they are on their way to building a financial empire.
The 38-year-old chairman of private investment group Marvelstone Group came to Singapore to join an Israeli start-up, whose chief executive liked how he had lived all over the world, recalls Cho. This included 2.5 years in Nepal where he volunteered on a Nepalese and Korean government project.
“He thought I was quite creative and I came here for a three-month project and met my wife and business partner, Gina,” he says.
Marvelstone, which moved its headquarters from Hong Kong to Singapore this year, is also behind the not-for-profit fintech hub Lattice80 at 80 Robinson Road, which opened on November 10.
After that start-up stint, Cho did mostly programming-related projects for a year before setting up his asset management firm Leonie Hill Capital with Gina Heng – now Marvelstone’s chief executive – with $50,000 of their savings as working capital.
Cho was inspired by a TED talk – a popular series of online talks on a wide range of topics – featuring Warren Buffett and Bill Gates, to start his own business.
“They asked how happy you were when you wake up every morning and if you were excited about it. Programming had been my passion all this while but I found stock trading more interesting and thought I’d be happy doing it for a long time.
“I quit my job the next day, without even having money for the next month’s rent. I was talking to Gina, who was a banking analyst, and we had the same vision and we registered Leonie Hill Capital one day in 2007. Leonie Hill because we were living there,” he said with a laugh.
The computer science and finance graduate, who has been programming since he was five years old, became interested in trading while studying at Handong Global University.
“Luckily I started programming early. I tried creating strategies and an automated trading platform, so my quant fund strategies started in university.” Quant funds use strategies based on computer models.
At Leonie Hill, he was working 15 to 20 hours every day, seven days a week for five to six years, delivering high double-digit returns every year. But the firm took two to three years to raise its first million.
“As a business we failed, we made a lot of money for investors but not the firm. I was helping small investors, and because I liked trading, I was almost doing it for free.
“We found out many people wanted to buy the business, but exited it instead of selling. My dream at Leonie Hill was to manage $1 billion, be in Bloomberg magazine and be a popular hedge fund but somehow it didn’t work out.” So the couple and Joel Ko, a South Korean living here – now Marvelstone’s managing partner – came together with the lofty ambition of overtaking BlackRock, the largest institutional investor with $4.7 trillion of assets under management.
The trio started One Asia Investment Partners in 2012, pooling “all the money we had”.
The first move was to acquire an asset management company in South Korea managing $2 billion of assets for $20 million.
The plan was to find maybe 20 of such partners, as “we reverse engineered the process to make $8 trillion in 15 years, as BlackRock took 30 years to reach $4 trillion”, he says.
However, the South Korean deal fell through after two years, and the trio left the firm, starting anew using Marvelstone, which was initially set up in 2010 in Hong Kong by Cho to do commodities trading.
They closed Marvelstone’s operations in South Korea and Indonesia and applied for a financial licence to set up shop in Singapore this year, moving all operations here because they saw how the fintech scene was growing.

With major Hollywood productions such as Life of Pi, Django Unchained, Alvin and the Chipmunks 3 and Seventh Son under his belt, Azim Hulaimi hopes to use his experience to raise the quality of visual effects in Malaysian films.
The former Rhythm and Hues employee formed visual effects production house Mira Digital with four other ex-colleagues.
“We could have worked at an international visual effects studio abroad but instead, we decided |to use our talents to work in Malaysia.
“It was not difficult to go overseas and expand our portfolio because we had our names on film credits, but we felt the need to contribute our knowledge and expertise from working on Hollywood films to the local film industry,” he told The Star yesterday.
Their first Malaysian film is Interchange, a supernatural fantasy thriller set in a Nusantara city where a forensics photographer helps a detective solve a murder.
The film, helmed by acclaimed Malaysian director Dain Iskandar Said, has set a new benchmark to propel Malaysian movies to a global level in visual effects.
Azim said it took Mira Digital one year to work on the film.
Unlike other visual effects studios that come in during post-production, they were on board during the pre-production stages working on the relevant elements.
He explained that with the many mystical aspects to Interchange, a lot of the concept art that needed to be drawn also consisted of the colour, the mood and the environment.
When asked which part of the film they had worked on, Azim said: “Look out for the birds!”
The 34-year-old from Kuala Lumpur said animating a bird took at least two months and a team of 12 because once it was created they had to make sure of the birds’ movements.
“The wings and the feathers must move according to the wind and gravity,” he said, adding that the producer also brought in a hornbill expert to guide them on the bird movements and the way it flies.
Meanwhile, Interchange producer Nandita Solomon said they opted for Mira Digital as the team had worked on Snow White and the Huntsman.
“Due to the birdman character, Belian, we knew we needed someone who had worked with feathers and bird effects,” she said.
Additionally, the film which was also shot at the library of Menara Star here, the headquarters of Star Media Group, involved actor Iedil Putra’s character Adam, a forensics photographer, arriving at an archive in search of a photograph.
“We looked at the National Library, and the National Archives but The Star’s was exactly what Dain had in mind, the type of shelves that can roll back.
“It’s a very special scene in the film, the moment when Adam finds his way in the story,” said Nandita.

He said this during a meeting with the Union of Myanmar Federation of Chambers of Commerce and Industry.
The investment policy reportedly contains seven factors relating to accountability and checks and balances.
It seeks to promote macroeconomic stability, rule of law, reliable arbitration procedures for disputes, good infrastructure mechanisms and a reliable financing system.
The Myanmar Investment Commission and other related organisations will ensure transparent and clear rules, plus procedures related to the investment policy.

‘No discrimination’
The policy says that since investment is important for the country, the government will not discriminate between local and foreign investors. Instead the government will seek to create an economic |environment in which it can forecast and control matters.
Firms will be protected from confiscation. After paying tax, firms have to achieve benefits in line with the law and the government will try to permit that investment can be undertaken and land leased.
The policy says both local and foreign investors have to obey rules and regulations and have to be accountable for the environment and natural resources.
Foreign investors will not be permitted to have businesses related to national security, cultural or social issues and any such firms must announced their dealings transparently.
The new Investment Law was enacted on October 18 by the Union Assembly.

We asked them this: What impact did the super El-Nino weather episode this year have on your plantations? And what are your expectations for the year ahead?
Lee Yeow Chor: “I had never imagined prior to this that the weather could play such an important role. We always believed in good planting material and good agronomic practices. These are important, but weather – especially drought – can change all that.
This year, we were hit with the effects of drought, not just from last year but also early this year. At the same time, there was a double whammy in that the Government also announced the freeze in foreign labour intake in February, and that created a lot of havoc and uncertainty in the recruitment process.
At today’s palm oil stock level of 1.5 million tonnes and two months ago at 1.4 million tonnes, prices should have moved much higher because it is a very low-stock level.
However, prices have been sort of capped, due to two main factors. One is the price of petroleum which dictates the usage of vegetable oil for biodiesel, not just palm oil but vegetable oil in general. Secondly, of course, the still abundant supply of soybean oil in the market.
These factors have played a major role in capping how high palm oil prices can go.
Nevertheless, prices have moved up. I believe there is a positive support at this current price level and moving forward, prices will be positive.
Bek-Nielsen: “The weather will always make the crop. We had severe El Nino last year and the repercussions of that have been extreme. I am convinced that Malaysia during 2016 will achieve its lowest yields per hectare in the past 25 years.
It has indeed been a challenging year but nevertheless, a year that has been blessed with better prices. I expect production next year will recover with prices very likely heading lower.”
Zakaria: “I think 2016 is a very challenging year for the Malaysian palm oil industry. We were badly affected by El Nino, and we continue to be affected until now.
I expect next year to be better for the palm oil industry in terms of yield.”
Lee Oi Hian: “After El Nino, I think we are going to have a much higher crop in the second half of 2017 and in 2018.
I am happy to see our Plantation Industries and Commodities Ministry’s flexible policy on the deferring of the biodiesel policy for the industrial sector. It is a good move.
You should save your money for when you really need to subsidise. The price of palm oil is adequate now, why spend reserves subsidies? This is the first time I have seen the ministry adopting a flexible policy, and I would like to pass our word of encouragement to them on this.”
Wong: “For the next six months, I believe that our production is going to be low and it will not recover so fast. It will only recover in the second half of 2017 onwards, even though we see a slight recovery at the moment due to the seasonal crop pattern.
In Sarawak, due to the severe El Nino impact, the most affected area is the northern region while the central and the southern regions of Sarawak are less affected.”
Yusof: “There was severe underestimation in the market about the production of palm oil in Malaysia and Indonesia for this year and next year. The El Nino occurred for one and a half years to two years. That put a huge strain on our palm oil industry and it will take about two years to recover.
Yes, the fact that production is low, prices should be high and that would comfort producers. It is a balancing act in the market place.
But keep in mind that soybean has been doing exceptionally well for the last five years. Production has somehow been very good. Nevertheless, North and South America cannot have perfect weather continuously for five or 10 years. And when the weather pattern changes, their supplies will be affected, and the beneficiary will be palm oil.
Our production is recovering and likely to increase. Should there be drought or floods in the near future, the supply of soybean oil will be reduced and palm oil prices will increase.”

Mega office deals helped drive foreign investment in local real estate to its highest level since 2007.
About US$8.85 billion (Bt315 billion) from overseas has been pumped into Singapore property so far this year – the best result since the $15.27 billion outlay in 2007, before the global financial crisis hit.
Analysts say the pace of foreign investment could well carry over into next year, depending on how the economy fares.
The influx of foreign funds is due partly to the view of Singapore as a safer investment destination in a world roiled by uncertainties.
“It could be due to global market volatility as a result of Brexit and the oil and gas sector. Foreign investors |see Singapore as a defensive play where investment is fairly protected due to the strength of the Singdollar,” |said Christine Li, research director at Cushman & Wakefield.

Big increase
The data from property consultancy CBRE, which records investment deals over $10 million in value, shows foreign expenditure at $8.85 billion, accounting for 41.7 per cent of total property spending so far this year. That was up by 62 per cent from foreign investment sales of about $5.46 billion last year, CBRE told The Sunday Times.
It was also markedly higher than the foreign investment volume of $4.67 billion in 2014.
The office sector drew the most interest — 76.5 per cent or about $6.77 billion of the foreign capital spent so far in 2016, noted CBRE.
“Over the next three, four years, there’s … very little new office space being completed … The more forward-looking investors are looking at that period of little supply, which will then result in rental growth,” said Jeremy Lake, executive director for investment properties at CBRE Singapore.
Real estate consultancy Edmund Tie & Company said investors typically look towards 2020, when the market is projected to pick up.
A huge chunk of foreign investment went into the Asia Square Tower One deal in June, when the Qatar Investment Authority stumped up nearly $3.4 billion for the trophy asset in Marina Bay.
Malaysian developer IOI Properties Group’s unit, Wealthy Link, smashed public land sales tender records with its $2.57 billion bid last month for a white site in Central Boulevard, also in Marina Bay.
Foreign investors have also been active in the residential sector, notably Chinese developer Qingjian Realty’s $638 million purchase of Shunfu Ville via a collective sale in May.
It also won the tender for a mixed development |site in Bukit Batok West for $301 million in the same month.
Those deals led to Qatar, Malaysia and China being the top three sources of foreign investment in real estate here so far this year.
Consultancy JLL noted that slower economic growth and efforts to cool the property market have weighed on the real estate sector in recent years.
“During this period, other major markets across Asia have experienced a strong market upturn, making Singapore an increasingly attractive investment proposition on a relative basis,” said Mr Greg Hyland, head of capital markets, Singapore at JLL.
Hyland said foreign investment volume in 2017 could keep pace with this year’s activity, but “the recent run-up in long-term interest rates will see investors cautiously pricing opportunities”.
The market next year could get a boost from Jurong Point mall which is on the market, and Asia Square Tower Two – for which its owner BlackRock is said to be sussing out interest from potential buyers.

When the female divers of Jeju Island emerge from their minutes-long foray underwater, they let out a much-awaited sigh.
Called “sumbi”, the exhalation releases carbon dioxide from the lungs with a sound that is similar to whistling. When the divers pop up in groups, a chorus of singsong breathing echoes through the coast.
“Haenyeo”, as the women divers who have been diving in the waters off Jeju for centuries to gather seafood are known, were inscribed on the list of Intangible Cultural Heritage of Humanity by UNESCO on Wednesday during the 11th session of the Intergovernmental Committee for the Safeguarding of the Intangible Cultural Heritage in Addis Ababa, Ethiopia.
The inscribed haenyeo culture consists of “muljil”, free diving techniques that involve no oxygen gear; “jamsu-gut”, a pre-diving shaman ceremony praying for safe dives; and the “haenyeo norae,” songs that divers sing aboard boats heading out to the sea.
The committee said haenyeo culture deserved international recognition for preserving the region’s traditional rituals, passing down technical know-how for generations, following eco-friendly harvesting methods and empowering women.
“The breaths she held became rice, became her husband’s drink, and became her children’s books,” a voiceover says in “Breathing Underwater”, a documentary spotlighting haenyeo by Ko Hee-young, released in September.
Since the 17th century, female divers have been making ends meet by gathering marine products like shellfish, abalone, sea urchins, and seaweed from the sea bed, according to Choa Hye-kyung of the Jeju Development Institute.
“Back when there was no other industry on the island, and when women weren’t educated, it was the only way they could provide for their families,” she says. Both men and women engaged in diving for marine products back then, before the island developed a booming mandarin orange farming industry.
“The sea is our workplace,” 55-year-old haenyeo Kim Bok-hee said at the Korean Women’s International Network convention held on Jeju Island in August. “In some ways it’s much more comfortable than an office. You don’t have to tiptoe around others. What you earn is proportionate to your skills.”
“Don’t get greedy. Only harvest for as long as you can hold your breath,” an elderly haenyeo tells her daughter in “Breathing Underwater”.
“Your eyes are greed, which you must control.” Such wisdom, along with extensive knowledge of the seabed, are carried down orally, generation after generation.
Wearing only a black rubber wetsuit, haenyeo plunge into the water for up to 3 minutes at a time with no additional breathing apparatus and carrying only rudimentary fishing tools – a bowl for scooping and a net for storing the harvest. They gather seasonal products – sea cucumbers from January to June and August to December, and abalone from January to September.
“They take what’s available, but there’s no risk of overfishing,” says Choa. “They’ve learned to live alongside nature.”
Few younger women are joining the trade nowadays, however, due to the availability of other jobs and coastal pollution, which has led to lower yields from the sea.
According to the Ministry of Maritime Affairs and Fisheries, there were 4,415 active haenyeo as of 2015 and more than 98 per cent were over the age of 50. In 1965, there were as many as 23,810 haenyeo in Jeju, according to the Academy of Korean studies.
“The Unesco designation is significant, shedding light on the waning trade and letting haenyeo take pride in their work,” says Yoo Chul-in, a professor of anthropology at Jeju National University.
The Cultural Heritage Administration also hoped that the haenyeo culture, unique to Korea, would gain fresh attention around the world, it said in a statement.
Jeju Special Self-Governing Province will continue efforts to preserve the haenyeo culture through research projects and support for the haenyeo school, which was established last year. A celebratory event will take place on December 14 at the International Convention Centre Jeju.
A total of 19 Korean cultural assets are now included on the Unesco list of intangible cultural heritage, including the royal ancestral ritual and music of the Jongmyo shrine, the pansori (a Korean genre of musical storytelling) epic chant and Korea’s annual practice of making and preserving kimchi, called “kimjang”.
The haenyeo culture listing came almost three years after Korea applied for the listing in March 2014.
Present at the committee session Wednesday were officials from the Jeju Special Self-Governing Province, along with a delegation consisting of officials from the Ministry of Foreign Affairs, the Permanent Delegation |of the Republic of Korea to |Unesco and the Cultural Heritage Administration.