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World Bank: MEA is Golden Opportunity for Indonesia

Jakarta, 10/04/2014 MoF (Fiscal) News - The Southeast countries will benefit from the implementation of the ASEAN Economic Community (AEC) in 2015. Chief Economist and World Bank Sector Manager Jim Brumby assesses that Indonesia potentially gains benefit of increased foreign investment and export as well as being an important driver of growth.

Meanwhile, the World Bank estimates that the enforcement of MEAs will attract Foreign Direct Investment (FDI) in the range of 28 to 63 percent. "Indonesia has a lot of potential for it. Hence, Indonesia needs to prepare itself to take advantage of the momentum," he explained.

In addition, developing countries in Asia also gain benefit from structural reforms, such as facilitating international trade and promoting FDI, particularly in the service sector. In addition to increase investment, the World Bank noted, MEA also potentially reduce the development gap among the ASEAN-6 (Indonesia, Singapore, Malaysia, Vietnam, Philippines, and Thailand).

Regarding current development, the Vice President of the World Bank for East Asia and Pacific, Axel van Trotsenburg says that Indonesia needs to increase its FDI, following China's economic growth which is projected to experience slowdown. "Indonesia must increase the amount of FDI. This is important to maintain economic growth when export performance declines in the future," he said. (Ak)