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Investment on Upward Curve, BKPM Data Show February 15, 2006

Posted by ekon in investasi.

Despite the many problems facing firms doing business here, foreign direct investment, both approved and realized, grew strongly last year, latest figures show.

The Investment Coordinating Board (BKPM) said Wednesday foreign direct investment (FDI) realization from January to December last year nearly doubled to US$8.91 billion (909 projects) from $4.6 billion (544 projects) during the same period in 2004.

In a further reflection of improving investor sentiment, FDI approvals also increased by 30 percent last year to $13.57 billion (1,648 projects), up from $10.41 billion (1,226 projects) the previous year.

The transportation, warehousing and communications sectors were most in demand, with 53 projects valued at $2.94 billion realized and 68 projects worth $3.1 billion planned.

Next came the chemical and pharmaceutical sectors (41 projects worth $1.15 billion realized and 42 projects worth $2.87 billion planned), followed by the construction sector (35 projects worth $921 million realized and 91 projects worth $1.77 billion planned).

Most of last year’s approved FDI proposals came from Singapore (203 projects valued at $3.93 billion), the United Kingdom (104 at $1.52 billion) and Japan (76 at $1.17 billion).

Indonesia’s telecommunications sector, notably the mobile communications industry, has proved highly attractive to many investors keeping an eye on its vast market of 220 million people, with the number of cell phone users expected to grow by 20 percent annually from the current level of 45 million users. The government is currently in the process of putting the latest 3G services out to tender.

The BKPM report also revealed that the level of domestic investment was in line with the upward FDI trend, with actual realization more than doubling to Rp 30.66 trillion (214 projects), compared to Rp 15.26 trillion (129 projects) in 2004. Approvals increased by 14 percent to 218 projects worth Rp 50.57 trillion from 199 projects worth Rp 44.1 trillion last year.

Local investors mostly focused on the food, paper, printing, agriculture and plantation sectors.

In total, realized foreign and domestic investment projects provided employment for 278,859 workers, compared to 206,298 workers in 2004. Meanwhile, the 467 approved projects still in the pipeline are expected to provide jobs for 407,743 workers, and exports worth $28.07 billion.

The BKPM data excludes investment in the oil, gas and mining industries, banks and non-bank financial institutions, and the capital markets as these are regulated by other agencies.

Indonesia has been struggling to lure back foreign investment — which reached a peak of $39.66 billion in 1995, but then collapsed to $13.64 billion immediately following the 1997-1998 Asian financial crisis.

The government has vowed to curb corruption and red-tape, promote legal certainty and improve the country’s infrastructure to boost the business climate and attract invest

Source: The Jakarta Post



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