Economists warn that Indonesia’s attempt to attract tech investment, specifically from Apple, through stringent local content requirements may backfire. Apple’s recent proposal of $100 million was rejected in favor of a higher $1 billion investment demand for local component production. Despite its large consumer base, Indonesia is a small market for Apple, which may see the country as a gateway to Southeast Asia. Local content rules have previously deterred foreign investment, contributing to companies like Foxconn withdrawing plans. Experts suggest Indonesia needs a holistic approach focusing on infrastructure and incentives to improve its investment climate, akin to Vietnam’s successful strategies.
