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FDI surges despite drop in domestic investment
Foreign direct investment rose significantly during the first quarter as multinational companies began to take the advantage of the improvement in the country’s economy
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oreign direct investment rose significantly during the first quarter as multinational companies began to take the advantage of the improvement in the country’s economy.
The Investment Coordinating Board (BKPM) said on Sunday that foreign investment reached about Rp 35.4 trillion (US$3.8 billion) for 424 projects, an increase of about 42 percent from Rp 25 trillion in the same period, last year.
In a contrast, domestic investments reached about Rp 6.7 trillion for 150 projects, down 23 percent from Rp 8.7 trillion for 44 projects in the same period last year.
However, the surge in foreign investment pushed up the overall level of investment in the country during the period, despite the drop in domestic investment.
The first quarter (Q1) investment figures for both domestic and foreign direct investments reached
Rp 42.1 trillion for 574 projects, increasing 24.6 percent up from Rp 33.8 trillion in the same period
of 2009.
“With this increase, we hopefully can achieve the targeted Rp 161.5 trillion in new investment, this year,” head of the BKPM Gita Wirjawan said.
Gita said that if the growth trend in the new investments could be maintained in following quarters,
it would not be difficult to achieve the government’s target to increase total investments during the year by 15 percent.
He said the 2010’s Q1 investment realization figures were calculated based on a new methodology called Investment Activity Reports (LKPM).
“This new methodology can be more accurate in detecting the investment flows in real time,” Gita said, explaining that under the new methodology, all companies who already obtained permits had to report investment realizations every quarter to the agency.
According to the report, a larger proportion of domestic investment went to transportation, warehousing and communications (Rp 1.9 trillion); trade and services (Rp 1.3 trillion) and electricity, gas and water (Rp 1.2 trillion).
For FDI, the larger shares went to transportation, warehousing and communication ($941.5 million); mining ($711.2 million); electricity, gas and water ($681.6 million) housing, industrial zones and office buildings ($406.1 million).
Of the total domestic investments, Rp 1.7 trillion for 19 projects went to Jakarta, Rp 1.3 trillion for 5 projects to Banten and Rp 0.9 trillion for 14 projects to West Java.
For FDI, about $1.4 billion for 154 projects went to Jakarta; $551.5 million for 59 projects to Banten; $518 million for 21 projects to East Kalimantan and $458.4 million for 14 projects to East Java. (ebf)
