European investors are maintaining their positive outlook on Indonesia's economy even as the nation gears up for its legislative and presidential elections in April and July, according to Jakob Friis Sorensen, chairman of the European Business Chamber of Commerce in Indonesia.

"The elections might create a little bit of wait-and-see, but I think in general everybody agrees that Indonesia in the longer run has a very big potential," Sorensen, who is also the president director for Copenhagen-based shipping company Maersk Line in Indonesia, said in Jakarta on Thursday.

The European Union is Indonesia's fourth-largest trading partner, and contributed approximately $2.41 billion in foreign direct investment last year, according to data from the Investment Coordinating Board (BKPM).

The positive sentiment is not without provisos, as EuroCham released a series of recommendations to strengthen Indonesia and EU economic relations.

In the press release, European businesses urged the government to focus on improving infrastructure, human resources, the regulatory environment and legal transparency.

"EU companies want to invest more in Indonesia and these recommendations show areas where Indonesia can do better at attracting investment from the EU and other foreign countries," Colin Crooks, the European Union's deputy head to Indonesia, said on Thursday.

"Tackling these issues will help FDI, help Indonesian exports, boost technology and skills transfer."

Foreign direct investment grew 22 percent to Rp 270.4 trillion ($23 billion) last year.

The recommendations are also important for Indonesia to become more investor-friendly, as the Asean Economic Community 2015 approaches, Crooks said.

While investment in Indonesia reached a record high last year, its pace of growth is expected to slow this year due to strict monetary policies.

Total investment - domestic and foreign - increased 27 percent to Rp 398.6 trillion last year from a year earlier, BKPM data showed.

BKPM targets investments in Indonesia to grow 15 percent, valued around Rp 456 trillion, slowing from last year's pace.

Last month, BKPM chairman Mahendra Siregar said that this year's elections shouldn't greatly impact the appetite of investors, since most had already adjusted to the country's political climate.

By Vanesha Manuturi

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