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$9.3b of FDI pledged to maritime sector
Indonesia is expected to receive US$9
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Indonesia is expected to receive US$9.3 billion in investment in the maritime sector from four countries amid the government's drive to develop the maritime sector, the Investment Coordinating Board (BKPM) has said.
BKPM chief Franky Sibarani said during a hearing at the House of Representatives Commission VI overseeing state-owned companies on Monday that his ministry had issued principal permits to investors from Australia, South Korea, Japan and China that were willing to pour their money into the country's maritime sector.
'Three investors from Australia, South Korea and China will invest in the development of dockyards and two investors from Japan and China will invest in fisheries,' he told reporters.
Principal permits serve as an initial step for investors to complete their projects in Indonesia. It usually takes several years for investors to realize a project after acquiring the permit.
Investment in the country's maritime sector was expected to surge, driven by the government's ambition to make the country the world's maritime axis, Franky said.
Under the administration of President Joko 'Jokowi' Widodo, the country aims to develop 24 ports ' existing and new ones ' as part of its maritime axis vision that involves developing maritime highways and modern fishing ships.
State-Owned Enterprises Minister Rini Soemarno said during the same event that the government would need funding of Rp 109 trillion ($8.4 billion) for the development of maritime highways.
'The mega project will help the country cut its logistics costs, which currently stand at around 24 percent of its gross domestic product,' she said.
The figure is far higher compared to Japan (10.6 percent), South Korea (16.3 percent) and the US (9.9 percent), Industry Ministry data shows.
'We are upbeat that if all the government's maritime projects run smoothly, investment in the sector will increase by at least 20 percent of total realized investment in the sector in the next five years,' he said.
Indonesia's total investment in the maritime sector during the period 2010 to 2014 hit Rp 3.2 trillion, or 20 percent of total planned investment in the sector, which stood at Rp 15.97 trillion during the same period, according to data from the BKPM.
The country's total investment from 2010 to 2014 hit Rp 1.6 quadrillion, most of which went to the manufacturing and service sectors, BKPM data shows.
Indonesia's economic potential from the maritime sector is estimated to reach $329.2 billion each year ' $32 billion from fisheries, $56 billion from coastal businesses, $40 billion from biotechnology, $2 billion from marine tourism, $21 billion from the oil industry and $20 billion from sea transportation, the Maritime Affairs and Fisheries Ministry has estimated.
