Belt and road trade advantages in Indonesia? Hong Kong business leaders speak of challenges

Challenges range from limits on shares that foreign investors can hold to stiff competition from neighbouring countries such as Singapore and Malaysia

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Brian Chan Pak-lam is president of the Indonesian Chamber of Commerce in Hong Kong. He recommends careful research be done before investing in projects in the country. Photo: Su Xinqi

Published: 9:01am, 2 May 2018Updated: 9:01am, 2 May 2018

Infrastructure and professional services have long been hailed by Hong Kong officials as the city’s advantage in Southeast Asia under Beijing’s “Belt and Road Initiative”, yet business leaders with projects in Indonesia tell a different story.

Brian Chan Pak-lam, president of the Indonesian Chamber of Commerce in Hong Kong, and Sutedja Sidarta Darmono, president of a 5,600-hectare private industrial estate near Jakarta, said the city’s investors and professionals faced a host of challenges in Indonesia as foreign investors, as well as competition from economic rivals and neighbours, including Singapore.

Infrastructure needs run high in the island nation. Jakarta is to open its first mass rapid transit system in 2019. Photo: Su Xinqi

“Indonesia has been saving smaller and easier projects for local capital, and leaving the larger and harder ones to foreign investors,” said Chan, 29, manager of two biofuel power plants in the country.

Chan believed the challenges affected all industries in the island nation and spoke of limits on the maximum amount of shares foreign investors could hold depending on the nature and size of their business.

Indonesia has been saving smaller and easier projects for local capital, and leaving the larger and harder ones to foreign investors

Brian Chan Pak-lam, Indonesian Chamber of Commerce in Hong Kong

He cited the example of small-scale projects in the mining industry in which foreign investors could control no more than 49 per cent of shares – vastly different to his large energy projects that allowed him to hold 95 per cent.

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Belt and road trade advantages in Indonesia? Hong Kong business leaders speak of challenges

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Challenges range from limits on shares that foreign investors can hold to stiff competition from neighbouring countries such as Singapore and Malaysia

Challenges range from limits on shares that foreign investors can hold to stiff competition from neighbouring countries such as Singapore and Malaysia