Indonesia aims for FDI growth of 23% after record 2012

Sharp hikes in minimum wages are also a concern for labour intensive industries such as textiles, footwear and plantations. Some South Korean investors have closed down factories to relocate to other countries after the government declined their requests to be exempted from the wage hike regulations, the Jakarta Post newspaper reported on Monday.

But Basri said there were no companies that had notified him they wanted to withdraw investment from Indonesia.

"We don't expect foreign investors to stop coming into Indonesia, especially noting the fact that infrastructure upgrades are ongoing in the country over the next three to five years," said Gundy Cahyadi, an economist at OCBC in Singapore.

"What's more important for the country is that there is a need to continue enhancing workers productivity, especially in the manufacturing sector, which has been a laggard relative to the region."