Purbaya Yudhi Sadewa – Indonesia's improving economy has triggered foreign investment inflows. However, concerns are rising that overseas money is too dominant in the economy, and that such development by foreigners will not benefit Indonesians.

The climb in overseas ownership in several sectors of the economy is often used as an indicator to show that our economy is dominated by foreign powers. Such increases in the financial and mining sectors, as well as in plantations, suggest that our economy is already dominated by foreigners.

However, the increase in overseas ownership in several sectors cannot be used to conclude that our economy as a whole is dominated by foreigners.

When the country was gripped in financial turmoil in 1997 and 1998, foreign contribution – measured by subtracting gross domestic product from gross national product and dividing the difference by GDP – in Indonesia's economy had risen significantly. The downfall of the economy forced Indonesian companies to sell some of their assets. At the same time, foreign companies were confident that the economy would get better and they invested, by buying those assets.

In 1999, foreign contribution in Indonesia's economy increased to 7.62 percent. Therefore, we should remember that the increase in foreign ownership on several sectors of the economy was a consequence of the crisis more than a decade ago.

As the economy has improved, domestic businesses have been thriving and foreign contribution has been decreasing, declining to 4.87 percent in 2005 before dropping to 2.82 percent in 2010.

The faster-growing economy will eventually create wider job opportunities – with every one percentage point growth in the economy equivalent to the creation of 400,000 jobs. So, the strong economy – indicated by the pace of growth – is an absolute requirement to increase the nation's welfare.

Fortunately, Indonesia's economic growth has been getting better in the last few years. In 2010, our economy grew 6.1 percent and is estimated to grow at least 6.4 percent this year.

Looking at such economic data partially often makes us draw the wrong conclusion. If domestic players believe the wrong conclusion, they will hesitate to expand their businesses and investments, at a cost to the economy.

[Purbaya Yudhi Sadewa is chief economist at Danareksa Research Institute.]