Foxconn and Investment Expectations in the Telecommunications Sector in Indonesia

this week reportedthat Foxconn Technology (Hon Hai Precision) will focus its investment in 2013 on its homeland Taiwan. Foxconn chairman Terry Gou mentioned the plan to a number of local media that they would build facilities in New Taipei, Taichiung and Kaohsiung. So far, Foxconn has mostly produced electronic goods from China. Indonesia's hopes of securing billions of dollars in investment and massive job openings in this sector appear to be dwindling.

Previously, Seeking Alpha also discussed business and global stocks down the news about this issue. Seeking Alpha suspects that there are three important reasons for delaying Foxconn's investment in Indonesia. These three things are: (a) Indonesia is not known as a maker of high-tech equipment (in the electronics and telecommunications fields) (b) There are very few regulations governing the circulation of illegal cell phones (c) Indonesia's minimum income level (especially Jakarta and its surroundings) ) are no longer attractive to foreign investors.

In addition, it also discussed internal issues that have been a problem for Foxconn, especially those related to demands for increased employee welfare. In short, there were too many problems, both internal and external, that made Foxconn have to rethink (even many times over) to finalize its investment in Indonesia.

If Foxconn is really canceled to invest here, of course this will be a hard slap for the government as a regulator. Previously, two of our ministers had been talking about this investment, even before Foxconn gave its official statement. Of course this is not legitimacy that Indonesia is less attractive in the eyes of large foreign investors, but this can be an introspection for the future.

Even so, the government should not just stand by in this matter. In fact, there is potential to partner with similar investors to enter Indonesia. No less big investors in the field of electronics and telecommunications.

Do you still remember the visit of the CEO of Samsung Indonesia to the regulator? Samsung has a good history with Indonesia, where currently there are a number of its electronics factories operating here. If the government is able to provide an attractive offer for Samsung, it is not impossible that the world's largest cellular phone manufacturer today will be willing to realize its investment here and we will soon enjoy more "made in Indonesia" cell phone products.

Apart from that, regulators can also try to reach more local cellphone manufacturers, such as Cross, Tiphone, Polytron and so on, to increase their local content with the lure of attractive incentives. So far, all goods have been imported from China because production costs in Indonesia cannot compete. Is the government unable to do anything to overcome this?

After all, as the saying goes, many roads lead to Rome. If we want to compete more with China as a producer of cell phones and efficient telecommunication products, of course we have to have something interesting to offer.