SOVEREIGN RISK
Indonesia
Legal risk:Indonesia’s courts are heard to be corrupted and this will resulted in unfair judgments between two or more parties. The foreign investor can appeal to have their case heard at their respective country if dispute happen.
Political risk:
Indonesia government is still very unstable. There are a lot of corruptions in the government position and some Indonesians like to make chaos as well as demonstration that cause some business activity being affected. The Indonesian Law have not established well enough, in the sense that there are frequent changes made to improve the country. As a result, there is no fix guideline
Market risk:
Being heavy in debt with IMF (International Monetary Federation) and 1998 Economic Crisis resulted in inconsistency of exchange rate and Indonesia Rupiah value. Inflation rate has subsided slowly to normal level due to strengthening of Rupiah against US dollar.
Security risk:
Nowadays, terrorist are targeting on Western investment in Indonesia. There is a lot of bombing case in Indonesia and people feel insecure in doing business there. Any chaotic incidence will surely affect the whole market performance.
There are other risks to take note before entering into that country
Taxation
Malaysia
Culture
Law
Reference
Incoterm
Contact
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