The issue of FDI, inclusive growth, and institutions which have been investigated in this dissertation is highly relevant for Indonesia because of three reasons. The first is: Indonesia faces high income inequality while it has high economic growth. This evidence indicates that Indonesia’s economy is not inclusive which means that many people are still excluded from economic activity. The second is: Indonesia still relies upon foreign investment to support the economy. Central government who is responsible for managing FDI provides policies to attract more FDI. However, some evidence in some part of Indonesia regions showed that high FDI did not ensure prosperity of those regions. The evidences also demonstrate that expected positive impacts …show more content…
First, in order to promote FDI to inclusive growth, the Indonesian governments should ensure that the government’s plans and regulations have strong capacity to manage FDI for inclusive growth. The capacity of those plans and regulations should be assessed by considering whether the plans and regulations have clearly defined the concept, targets, and strategies for promoting FDI to inclusive growth. Moreover, whether the plans and regulations cover the channels of FDI to inclusive growth also have to be analyzed. In addition, coherence among plans and regulations and coordination among government officials in the implementation should also be …show more content…
First, foreign companies have to understand society value on the region where foreign companies invest. As suggested by the theoretical framework, understanding the local value is significantly important in supporting the existence of inclusive institutions. International hotels in Badung District have internalized the THK principles in their business activities because the principles are in line with the concepts of sustainable and inclusive development. In addition, Badung District government has also internalized the principles of THK in its development plans. Therefore, integration of values or objectives among stakeholders to achieve inclusive growth is important. Second, foreign companies have to communicate and involve society especially on formulating, designing, and implementing their society programs. For instance, foreign companies involve local people in designing and implementing the Corporate Social Responsibility (CSR) programs. Foreign companies allow the local people to propose CSR program and discuss the proposal together. In order to increase transparency and accountability, regularly, local people have to report about the implementation of the CSR programs and the use of the funds. The involvement of local people in formulating, implementing, and controlling CSR programs supports foreign companies’ CSR programs to be more