FDI approvals down by 30.6% in January-April<\/p>\n
Dadan Wijaksana, Jakarta<\/p>\n
The country's struggle to recover from its investment slump
\ntook another hit on Tuesday, as the National Investment
\nCoordinating Board (BKPM) reported another sharp drop in foreign
\ndirect investment (FDI) approvals in the first four months of the
\nyear.<\/p>\n
The state agency said that US$2.3 billion worth of FDI was
\nrecorded during the January-April period, marking a 30.6 percent
\ndecline from the same period last year.<\/p>\n
No official reasons were given by the agency for the decline
\nin the figures, which should further expose the country's
\ncontinued weak business climate, with investors complaining about
\nvarious problems here considered detrimental to the government's
\nefforts to lure investors.<\/p>\n
Legal uncertainty, security fears, labor-related disputes and
\nuncontrolled decentralization are at the top of a long list of
\nissues that have hindered the return of fresh investment.<\/p>\n
Nevertheless, efforts to turn things around have brought about
\nlittle change, investment approvals consequently have been
\ndeclining.<\/p>\n
Before the 1997 Asian economic crisis, investment was one of
\nthe country's main economic engines. But now, it accounts for
\nless than 10 percent of country's gross domestic product (GDP) --
\nwith domestic consumption contributing more than 75 percent.<\/p>\n
Various surveys and reports have predicted that the sluggish
\ninvestment climate would likely continue at least until after the
\ncountry had a newly assembled government later this year after
\nthe presidential election is final.<\/p>\n
Elsewhere, the report said, the metal, machinery and
\nelectronics sectors had attracted the highest foreign investment,
\nfollowed by hotels and restaurants, the textile industry and the
\nconstruction sector during the period.<\/p>\n
BKPM's report also showed that they had issued licenses for
\n120 FDI projects valued at $919.1 million as compared with 155
\nprojects worth $749.5 million a year earlier.<\/p>\n
Of the total, Japanese firms were the largest group of
\ninvestors with 20 projects worth $851 million, followed by U.K.
\nfirms with 18 projects worth $672.1 million and South Korean
\ncompanies with 61 projects at $148 million.<\/p>\n
In total, the projects had the potential to absorb around
\n65,000 workers, both Indonesians and expatriates.<\/p>\n
On domestic investment however, BKPM reported a 115 percent
\nrise during the same period with approvals standing at Rp 12
\ntrillion (about $1.4 billion).<\/p>\n
The data on domestic investment should be encouraging as it
\nmay reflect a speedier restructuring pace in both the corporate
\nand banking sectors.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/fdi-approvals-down-by-306-in-january-april-1447893297",
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"sponsor": "Okusi Associates",
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