The Jakarta Post
President Joko “Jokowi” Widodo has said investment is the key to accelerating economic growth amid a slowing global economy.
As the global economy is expected to continue growing at snail’s pace this year, Jokowi said investment would be the only thing that could improve the country’s economic growth.
“There’s no way we can boost exports because every market is declining. So, the only way to boost economic growth is through investment, big, medium or small,” he told the press in Jakarta on Thursday, adding that investment would also create jobs.
The economy grew 5.02 percent last year, lower than 5.17 percent in 2018, as investment and exports softened. Investment slowed to 4.06 percent year-on-year (yoy) in last year’s fourth quarter versus 6.01 percent in the same period in 2018.
Meanwhile, exports shrank 0.39 percent during the period, an improvement from a contraction of 4.59 percent in 2018's fourth quarter, Statistics Indonesia data showed.
Jokowi expressed optimism that Indonesia could achieve this year’s growth target of 5.3 percent set in the state budget despite unfavorable global economic conditions due to persisting uncertainty and the spread of COVID-19.
“The target is still realistic as long as the Investment Coordinating Board [BKPM] can reach the investment target we’ve set,” he said.
The BKPM recorded investment realization of Rp 809.6 trillion (US$59.1 billion) last year. Of the amount, Rp 423 trillion came from realized foreign direct investment, while the rest came from domestic direct investment. It expected to record realized investment of Rp 886 trillion this year.
To help realize this target, Jokowi instructed regional leaders and one-stop integrated services (PTSP) to cater to investors’ needs regardless of their size to lure more projects to Indonesia.
The investment, big or small, could increase capital flow to the country and improve spending, which account for more than half of the country’s gross domestic product (GDP), as more jobs would be created from those investments, he said.