10. Evaluation toward Foreign Direct Investment (FDI) in Indonesia and Its Relation with Democracy after 20 Years of the Collapsed of Orde Baru

Abstract

Since the monetary crisis and reformation in 1998, Indonesia has developing to be a democratic country. The direction of the economic system in Indonesia has led to capitalism where the Foreign Direct Investment (FDI) entered Indonesia and influenced the International cooperation in the country. The matter is important to be discussed since FDI influenced Indonesia's economic system. The purpose of this research is to analyze the policy related to the FDI since the collapse of Orde Baru and how democracy can influence the decision making process regarding FDI. This issue is analyzed using Political Risk and Liberalism Theory. This research is also using descriptive qualitative method are used to analyze the issue. To obtain the data, the writers were using literature study by collecting the data and facts from Online Journal, Official Sites, Books, and internet article. From the result, we can find that the growth of FDI in Indonesia has reached 13.2 percent in the first quartile of 2017 and absorbed 164.000 labors. However, this number was dominated by foreign investors. The latter also influenced the competition towards Small-Medium Enterprises in Indonesia and changed the social and cultural sector where the society grew more consumptive.