Because of Indonesia's"local content policy," Apple has been unable to sell its latest iPhone model in the country until it invests or sources a certain amount of components locally.
82-year-old billionaire CEO shares his advice for the younger generation: ‘Have a go, don't stand around thinking about it' However, the government is now seeking more of Apple's supply chain and wants more facilities involved in the actual manufacturing of products.that the value of Apple's previously proposed investments is lower than that of its Indonesian sales, arguing that smartphone companies like China's Xiaomi and South Korea's Samsung have invested more.
He added that global tech supply chains such as Apple's involve slicing up the value-added, so each country might only contribute a small amount.Most economists who spoke to CNBC said they did not believe that content policies would work to attract companies like Apple and would instead have the opposite effect.
Yessi Vadila, a trade specialist at the Economic Research Institute for ASEAN and East Asia, said that local content requirements in Indonesia have historically been tied to increased costs, decreased export competitiveness, and productivity losses while offering little impact on growth or employment.
"Indonesia will need to step up their game across the board," Gupta said, noting that companies consider a range of factors, including law enforcement, stability of trade policy, and the labor market.