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Investments up more than 50%, reach all-time high
Investment in Indonesia rebounded to an all-time high of Rp 208
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nvestment in Indonesia rebounded to an all-time high of Rp 208.5 trillion in 2010 on the back of the improved economic fun-damentals in the Southeast Asia’s largest economy, the government says.
Investment Coordinating Board (BKPM) chairman Gita Wirjawan said on Sunday the total realized investment in the country in 2010 rose by 54 percent to Rp 208.5 trillion (US$22.95 billion), after a 12 percent drop in 2009.
BKPM said total investment last year exceeded the initial target of Rp 160.1 trillion. Foreign investment comprised Rp 148 trillion, or 71 percent of the total and domestic investment accounted for the remaining Rp 60.5 trillion, according to the BKPM.
“Foreign investment increased about 52 percent over 2009’s Rp 97.4 trillion, while domestic investment also rose significantly, around 60.1 percent, up from Rp 37.8 trillion in 2009,” he said.
BKPM investment supervision and implementation deputy Azhar Lubis said that the jump in foreign direct investment could be partially attributed to improvements in the country’s economic fundamentals in 2010.
“Foreign investors also had a more positive perception of our country as a destination for their investments,” he said, adding the growing confidence was reflected by an upgraded assessment of the nation by international credit rating agencies.
Gita said that improvement in the investment climate last year was aided by expanded investment services, including one-stop investment service centers at local administrations, which in turn promoted more domestic and foreign investment outside Java.
Most investment went to Java, home to the nation’s capital, although investments in other islands were increasing.
According to the BKPM, the largest contribution to domestic investment in 2010 came from the food and beverage industry with Rp 16.41 trillion (27.1 percent), followed by transportation, storage and telecommunications with Rp 13.79 trillion (22.7 percent) and crops, food and plantation projects with Rp 8.73 trillion (14.4 percent).
Foreign investments went primarily to transportation, storage and telecommunications projects worth $5.05 billion (31.1 percent), followed by mining projects valued at $2.23 billion (13.8 percent) and electricity, gas, and water projects valued at $1.43 billion (8.8 percent), the BKPM said.
West Java was ranked first in domestic investments with total investment reaching Rp 15.8 trillion (26.1 percent), followed by East Java with Rp 8.08 trillion (13.3 percent) and East Kalimantan with Rp 7.88 trillion (13 percent).
Foreign investors flocked to Greater Jakarta, which absorbed about $6.43 billion, followed by East Java and West Java which took $1.77 billion and $1.69 billion respectively.
Gita said that the greatest amount of foreign investment came from Singapore with $5.01 billion (30.9 percent), followed by the UK and US with $1.89 billion (11.7 percent) and $930 million (5.7 percent) respectively.
The government expected total investment to increase by 15 percent to Rp 240 trillion in 2011: 65 percent from foreign direct investment and the remainder from domestic investment, according to Gita
He said the final investment figures might exceed estimates due to various factors, such as inflation and improved infrastructure.
“The government will provide fiscal as well as non-fiscal incentives to attract large-scale investment projects,” he said.
Projects that would receive incentives were a $6 billion steel mill run by South Korea’s Posco and the upgrade of an $8 billion refinery by Kuwait Petroleum, he said (lnd)
