Lack of financial resources- discourages investment - Assignment Example

Topic: LACK OF FINANCIAL RESOURCES- DISCOURAGES INVESTMENT Lack of financial resources in Indonesia discourages investment in numerous ways. For example, lack of financial infrastructure to provide financial solution was a major factor that discouraged investments in Indonesia. In addition, limited access to credit facilities such; as soft loans that are payable within a period of one year created shortage of financial resources which further discouraged investment. In addition, unutilized borrowing, cash and cash equivalents, credit lines and securities discouraged investment in Indonesia.

Therefore, financial resources should be properly managed through establishment of proper budget to ensure cost has been minimized and at the same time maximizing benefits out of financial resources invested. There are numerous ways in which lack of adequate financial resources discourages investments. For example, lack of adequate financial resources as a result of higher rates taxation changed by Indonesian Tax Authority limits the amount of financial resources for investment. In addition, economic factors such as higher inflation rates that hit Indonesia 2007 reduced the amount of financial resources significantly.

This further discouraged investments plans in Indonesia (Sauvant, Wolfgang, Maschek and McAllister, p.10). Lack of proper saving plan among investors in Indonesia is a major factor that discouraging investments. Therefore, investor should carefully determine whether the available financials resource will be adequate to carry out a particular investment project (Christina, paras, 3-5). This may be done by carrying out a comprehensive investment appraisal. Indonesian government should carryout out amendments to ensure its financial systems provide all forms of financial resources that are necessary for investment.

For example the government should promote all forms of debt or equity financing methods to ensure that all investors in Indonesia have access to all forms of financial resources (Christina, paras, 3-5).Works CitedCanadian Bankers Association.Investing.Web.3.3.2014 .Christina. How to Reduce Investment.17.9.2012.web2.3.2014 :< Risk. http://www.sharemarketschool.com/how-to-reduce-investment-risk/>.Kess, Sidney, Terence M. Myers, and Dorinda D. DeScherer. Cch Financial and Estate Planning Guide: 2009 Edition.

Chicago, IL: CCH, 2008. Print.Sauvant.K.P, Wolfgang A. Maschek.W.A and McAllister.G.Foreign direct investment by emerging Market multinational enterprises, The impact of the financial crisis and Recession and challenges ahead:7.12.2009.Web.9.3.2014