Promoting Private Investment Mobilizing private sector capital to restart the engines of growth is essential to Indonesia's economic recovery. No successful economy counts on public sector funding alone to stimulate the creation of jobs that deliver the most immediate and enduring benefits to its people. Reliance on private funds to spur economic growth permits governments to concentrate their resources in areas for which they take primary responsibility, in particular provision of social safety net programs for the poor and vulnerable. The nexus between growth and the rule of law is very clear. Global competition for private investment is fierce.
Investors base their investment choices on many factors, among which predictability is paramount.
Predictability in these basic areas has an important positive weight in investment decision equations and reduces the cost of project capital. A civil service that adheres to professional and ethical standards and a well functioning judicial system are essential building blocks of predictability. Indonesia's new government has explicitly recognized the aspiration of all Indonesians for a more just political and economic system in which law reigns supreme. As with new governments everywhere, Indonesia must deal with inherited issues and problems, even as it seeks to introduce its own policies and programs. Many of these problems are complex and sensitive and may take years to resolve.