Indonesia is still managing to attract growing foreign investment despite a drop in overall investment in the Southeast Asian region in the first half of this year, making it a resilient market amid a domestic economic slowdown and a plunging currency, the Investment Coordinating Board (BKPM) has said.

Indonesia'€™s foreign direct investment (FDI) rose 62.4 percent in the first half of this year to US$13.67 billion, while overall foreign investment in ASEAN countries dropped 3.2 percent to $43.93 billion in the same period, according to data by the Financial Times as quoted by the BKPM.

'€œThe [Financial Times'€™] research proves that Indonesia is still a lucrative place for investment. Slowing economic growth and a plunging rupiah have yet to affect foreign investment flows into the country,'€ said BKPM head Franky Sibarani during a media briefing in Central Jakarta on Monday.

Indonesia'€™s economy has slowed to its lowest level in six years, registering 4.7 percent in the first half of this year, while the rupiah has slumped by 14 percent, the second-worst performer in the region. The rupiah broke the 14,000 mark against the US dollar recently, its lowest since the 1998 financial crisis.

FDI into Southeast Asia'€™s largest economy was the most among its peers in the region and accounted for almost a third of overall foreign investment into the ASEAN region. Investment was directed toward primary sectors ranging from chemicals, metals and coal to the oil-and-gas industries.

Malaysia, which topped last year'€™s rank with an investment value of $13.81 billion, suffered negative growth in the January-June period this year with only $7.01 billion reaped in investment, or a 49.2 percent decrease year-on-year (yoy).

BKPM deputy chairman Azhar Lubis said the weak rupiah could actually benefit foreign investors.

'€œLand and metal prices, for example, are much cheaper at this time,'€ he said, '€œInvestors usually invest for the long-term so that if they start construction now, in two to three years, the business will shift gears.'€

Franky said that his office was currently boosting the country'€™s appeal to countries that have become the focus of its investment marketing, namely the United States, China, Japan, South Korea and Australia.

Last week, Vice President Jusuf Kalla attended an investment gathering with leading Korean business players in Seoul. Kalla invited Korean businesses to take a bigger role in the many infrastructure projects in Indonesia, and to forge cooperation with Indonesian firms. Kalla promised to lend his full support through a series of bureaucratic reforms.

Franky said the visit attracted around Rp 80 trillion ($5.7 billion) in investment potential.

'€œAnother visit to Australia earlier this month also saw investment potential worth between $652 million and $757 million,'€ he said, adding that hundreds of Australian businesspeople would visit Jakarta in November to follow up on their interest.

With this in mind, Franky said his office was optimistic that this year'€™s overall investment target of Rp 519.5 trillion would be achieved, a 12 percent improvement from last year.

In the first half of this year, overall realized investment in the country topped Rp 259.7 trillion, up 16.6 percent yoy, with FDI accounting for 67 percent of the total at Rp 174.2 trillion. (prm)
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