Indonesian Policy Studies’ Senior Fellow Warns Governments About Strongarming Companies Like Apple For Investment, Saying ‘It Can Be a Dangerous Game To Play’

Apple might have agreed to invest $1 billion in Indonesia as it aims to get the iPhone 16 ban lifted but there is a possibility that the trillion-dollar giant may have been irked by the way it was forced to inject funds into the country. One Indonesian Policy Studies senior fellow warns about resorting to such tactics to get companies to invest in the region, as this strategy can backfire immediately.

You are viewing: Indonesian Policy Studies’ Senior Fellow Warns Governments About Strongarming Companies Like Apple For Investment, Saying ‘It Can Be a Dangerous Game To Play’

New report says that other countries are rolling out the red carpet for Apple as it plans to construct factories to reduce dependency on China, while Indonesia is playing hardball

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With the Trump administration bringing down the ban hammer on China, Apple’s supply chain will be disrupted severely, forcing the California-based giant to begin the construction of facilities in other countries, such as India and Vietnam, to offset future setbacks. These regions would be more than happy to accommodate Apple as setting up shop on their lands will result in more employment and allow these places to have some economic backbone.

Indonesia has a different tactic in mind, as it rejected Apple’s $10 million and $100 million investment offers and refused to budge until that dollar amount was raised. The government tried an intimidation approach, and it would not lift the iPhone 16 ban until more funds were injected. Given that Apple shipped a measly 2.9 million iPhones in Indonesia last year, this market barely has any significance, and the technology giant could have simply said no and allowed the iPhone 16 ban to remain in place.

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Then again, we doubt that it is the iPhone 16 ban threat that forced the company to raise that investment amount to $1 billion. As reported by Bloomberg, Krisna Gupta, a senior fellow at the Center for Indonesian Policy Studies, warns that it is not the best time to play hardball because such opportunities come once a blue moon. Indonesia’s Investment Minister Rosan Roeslan has stated that he wants to see fairness, such as job creation, and that the most important aspect is that the ‘global value chain’ moves with them.

Then again, Indonesia should tread carefully as it has witnessed its fair share of setbacks, with several of its footwear and textile factories closing down this year, laying off people in the hundreds. Countries like Vietnam and India are offering tax incentives, near-instant approvals and have given Apple the freedom to source components from different global supply chains. Gupta mentions that these perks would encourage Apple to invest a larger $15 billion in Vietnam despite the region’s smaller domestic market than Indonesia. Looking at the alternatives available, one can safely say that Indonesia dodged a bullet.

News Source: Bloomberg