THE INDONESIAN GOVERNMENT’S POLICY IN HANDLING JAPANESE INVESTMENT (CASE STUDY: LOW COST GREEN CAR)

In 2012, Indonesian government prefers Low Cost Green Car (LCGC)
program with the cooperation from Japanese companies as a way to being prepared to
face ASEAN Free Trade Agreement (AFTA) that will be implemented in 2015. The
government believes that if Indonesia did not run the program before AFTA 2015, another ASEAN member would take it over and it meant that Indonesia would import
most of the car from them. Through this program, Indonesia will try to build car with
the domestic made components. Automotive factories who want to join the program
have to fulfill 80% local component. It means that the car nearly “Made in Indonesia” due to majority local components of the car, factory which is located in Indonesia, and employees who build the car is Indonesian. On the other hand, there are some
negative impacts from this policy such as congestion, increased fuel consumption and
its subsidy, etc. This research aims to analyze the reason of Indonesia to accept the Japanese
investment in Low Cost Green Car program. The study use descriptive method which
describes and explains the problem based on data and information. Data collections
are collected through library research that is related to content analysis and expertise
concepts that are published in the articles, textbooks, journals, and other resources. So
far, LCGC program is beneficial for Indonesia especially to face AFTA in 2015
because of the commitment from the government to supervise it