FDI realization grew by 4 percent yoy in 2019’s first semester.
takeholders have lauded Indonesia’s success in boosting investment realization in the first half of this year but said more effort was needed to ensure the sustainability of the growth.
Foreign direct investment (FDI) realization grew by 4 percent year-on-year (yoy) to Rp 212.8 trillion (US$15.2 billion) in the first six months of this year. Despite the seemingly sluggish growth, it was better than the achievement in the same period last year when it contracted by 1.1 percent yoy, the Coordinating Investment Board (BKPM) reported on Tuesday.
Foreign business representatives offered optimistic views on Indonesia’s investment climate until year-end despite external turbulence and notable regulatory drawbacks.
“Indonesia remains an attractive destination for FDI, mostly due to its large domestic market and relative political stability. The [presidential and legislative] elections passed pretty quietly and did not harm confidence,” Lin Neumann, managing director of the American Chamber of Commerce Indonesia (AmCham), told The Jakarta Post on Tuesday.
“On the other hand, the regulatory and legal environment remains difficult and complex and both are frequently cited as a source of concern for investors,” he went on to say.
Some of the difficulties he cited were in regard to the Patent Law, local-content restrictions, import quotas and work permits. In addition, investors expressed hope that more sectors would be opened to foreign ownership through the revision of the negative investment list (DNI).
United States investments slid to $631.7 million during January-June this year from $646.1 million recorded in the same period of 2018, making the country the seventh-largest country of origin for foreign investments.
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