RI offers investment projects in regions

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Tue, 05/27/2008 4:45 PM  |  Headlines

President Susilo Bambang Yudhoyono kicked off an Indonesian investment forum on Monday, seeking billions of dollars in foreign direct investment (FDI) to the country's regions to spur economic growth and job creation.

At the second Indonesian Regional Investment Forum (IRIF), 35 regions are offering about 200 projects worth US$18.9 billion in the agribusiness, mining and energy, infrastructure and property and tourism sectors.

Indonesia secured about $6 billion in FDI in the first IRIF, held in November 2006.

"Local governments are becoming more innovative and savvy; they know that in order to draw investors, they must offer incentives. Sragen and Sidoarjo in East Java, for example, have enacted a one-door investment policy .... Investors do not have to deal with some 20 government offices like in other districts," Yudhoyono said in his opening speech.

Banten province has offered the largest project by value, the development of the Bojonegara oil refinery worth $4 billion. It is also offering the construction of an agribusiness terminal worth $4.37 million, the Cilegon-Bojonegara tollway worth $212 million and Bojonegara international port worth Rp 792.16 million.

"Our investment policy is also very attractive. We have signed the investment protection agreement with 60 countries; we have signed no-double-taxation agreements with 56 countries.

"And if you are worried about our anti-corruption policies ... we have a no-tolerance policy when it comes to graft," Yudhoyono told investors.

Indonesia is working to improve its investment climate, with the government set to issue its final package of economic policies this month to attract investment.

A copy of the draft package -- Focus of Economic Programs 2008-2009 -- comprises a series of regulations by economic ministers, including policies seeking to improve the country's investment climate and revise government decree No. 1/2007 on income tax facilities for investment in certain sectors and regions.

Former coordinating minister for the economy Boediono told investors that the issuance of the economic package "would be insurance for the public on the country's economy in 2009 when political activities are on the rise".

Boediono, who is now the central bank governor, said the package would be one of the government's main tasks until 2009, when Yudhoyono's government will end its term.

"The government will improve competitiveness to attract foreign investment," he said.

Investment Coordinating Board (BKPM) chairman Muhammad Lutfi said Indonesia had secured $9.94 billion in FDI between January and April this year, a 104 percent increase from the same period last year.

According to the BKPM, FDI in Indonesia rose from $5.97 billion in 2006 to $10.3 billion in 2007 on the back of political stability and an improving economy. The country's economy grew by 6.32 percent last year.

The government has said the economy may grow only by 6 percent this year, slower than the initially targeted 6.4 percent, due to soaring global oil prices that will burden the state budget.

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