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CHAPTER V

CONCLUSION AND RECOMMENDATIONS

5.1. Conclusion

Choosing Republic of Korea for BKPM foreign investment promotion at year 2007 is a good

step marketing communication strategy in the short-term by doing below the line promotion, since

after that it gave a significant increased number of projects and its values in year 2008.

Based on the results on data analysis, the author tried to conclude that with the marketing

communication in the form of investment promotion especially Indonesias Investment Integrated

Promotion (IIP) 2007 that held at Seoul, Republic of Korea, was not a wrong strategy. Because after

analyzing from the supply and demand analysis of Republic of Korea and Indonesia, they were have

mutual relationship Investment focus that attracted almost any sector, including the primary sectors

that consist of food crop and plantation, animal husbandry, forestry, fishery and mining; as well as the

secondary sectors that cover various SBC (Small Business Cooperation) and small or medium

enterprises (such as food processing, textile, wood processing, pulp and printing, chemicals and

pharmaceuticals, rubber and plastic, non-metal minerals, metalwork, machinery and electronics

(Samsung, LG), motorized vehicle (Hyundai) and other transport, etc).

In order to which country of an foreign investment promotion strategy is working and which is

falling short on expectations, it is important to monitor which country sector that have big

opportunity to be targeted. This practice allows adjusting its approach to achieving the objectives of

its investment promotion strategy.

5.2. Recommendation

It is not simply a marketing exercise. Its strategic use can surmount many of the constraints on

the institutional and regulatory fronts.

The formulation of an investment promotion strategy is a new era at BKPM. A unit

once seen as waste, investment promotion at BKPM should now act as the advance guard

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of its efforts to attract more investment to propel economic growth, partnering with

foreign investors under its newly adopted strategic framework. The characteristics of the

target countries, amongst other things, must be studied as well as the consequences of

eliminating factories in the country of origin to see whether lower labors costs would

really outbalance the advantages of local production. In endeavor to establish global

investment, BKPM sometimes forget the importance of the firms specific characteristics

and localizations, which may be real sources of competitive advantage. Designing

programs may require complex organizational and management skills and system

integration, precisely the things that are difficult to transfer to another country.

For instance, like our neighbor in Vietnam they already using tax holiday which

more than five years free of tax for foreign investors, its become one of tools or strategythat can attract new investors to join in instead to the country that doesnt have it.

Agricultural country like Indonesia, BKPM less discusses social impacts for farmers

on agricultural land tenure by the owners of capital. Although the agricultural sector

increased by 4.8% in 2008, we can confirm that with the proposed land tenure incentives

for owners of capital from the board then, sooner or later farmers will be out of business.

It may be that they would sell their own farmland to the owners of capital who have

mastered the land more widely and for long periods. Furthermore, these farmers will

switch to a mere profession farm laborers for the owners of capital in the agricultural

sector.

The objective of supply side analysis is to understand destination competition

among different countries open for investment. Successfully attracting investment

depends on investor preferences, enabling conditions and decisionDmaking processes.

Investors rely on a limited pool of information before decided to establish a presence in a

specific location. Identification of these decisive factors and the quality of information

that investors received guided host governments to positioning themselves to seize a

larger share of overall investment flows. Just in case, In endeavor to establish global

investment, BKPM sometimes forget the importance of the firms specific characteristics

and localizations, which may be real sources of competitive advantage.

Actually Effective demand side analysis is dynamic, evaluating competitive sectors as

well as sectors with high development potential. Dynamic demand side analysis would

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not only look at textiles and apparel as a traditional area of competition but also would

examine whether Indonesia can expect to reclaim this competitiveness in the medium

term. In short, the purpose of demand side analysis is to show which sectors would be

most attractive to investors and most beneficial for the country if investments were made

in them. In this case, Designing programs may require complex organizational and

management skills and system integration, precisely the things that are difficult to

transfer to another country.

From internal environment analysis this event (promotion strategy) is also build

understanding and confidence about attractive Indonesian investment potentials, to create

a positive image about investment climate in Indonesia in international circle, and to

recover a strong view and perception in the eyes of foreign investors that Indonesia isready to become an investment destination by disseminating information about

Indonesian investment policies and potentials.