Education English | Analytical Exposition Text : U.S Financial Crisis U.S | U.S financial crisis and its contagion to Europe and the rest of the world could also create new opportunities for Indonesia in terms of foreign direct investment and the development of basic infrastructures. As the U.S financial crisis has now spread to Europe , oil rich countries such as Saudi Arabia, Kuwait and Arab Emirate are now reviewing their holding or investment vehicle. They have accumulated hundreds of billions of U.S Dollars in their foreign reserve. Undoubtly they are now looking for more diversified invesment outside the US and Europe.
Because unfavorable political developments in Thailand and Malaysia over the past few months , Indonesia, which has a largerly Muslim population, could become one of these oil rich countries favorite places for foreign direct investment. That will be true if the conditions , lefal and market infrastructure are conducive for Islamic financial instruments.
The government has improved the legal framework with the recent actment of laws on sharia banking and bonds. The long term nature of Islamic bonds could make them the most suitable investment instrument for Indonesia, as these bonds grant an investor a share in an asset along with the cash flows and risks commensurate with such ownership.
The financial crisis has gripped the globe and weakening economic growth in the rest of the world. It will serve the government to accelerate the investment reform measures in order to resize this special opportunity in the global crisis.
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