FDI approvals jump by 68.6% in first four months<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
Foreign direct investment (FDI) approvals rose by 68.6 percent in
\nthe first four months of this year to US$3.1 billion from the
\nsame period last year, the office of the Coordinating Minister
\nfor the Economy said in a press release on Friday.<\/p>\n
"It shows that existing (foreign) investors remain interested
\nin developing business in the country," the ministry said.<\/p>\n
However, domestic investment approvals did not follow the
\nsharp increase in the FDI.<\/p>\n
Approved domestic investment plans dropped by 51.6 percent to
\nRp 4.2 trillion ($471.91 million) in the first four months of
\nthis year compared to the same period in 2002.<\/p>\n
Investment approvals have been declining after the country was
\nhit by the economic and political crisis of 1998.<\/p>\n
In 2002, FDI approvals plummeted by 35 percent to $9.7 billion
\nfrom the previous year of $15.06 billion, while domestic
\ninvestment approvals dropped by 57 percent to Rp 25.26 trillion,
\nfrom 58.62 trillion.<\/p>\n
Experts have long warned that the country's pressing problems
\nof legal uncertainty, security problems and poor implementation
\nof regional autonomy had been some of the factors that have
\ndiscouraged both foreign and domestic investors from investing
\nhere.<\/p>\n
Boosting investment is vital for the recovery of the country's
\nailing economy to help create new jobs for millions of unemployed
\npeople and prop up economic growth.<\/p>\n
The economy grew at a slower rate in the first quarter of this
\nyear due to slow domestic consumption and falling investments.<\/p>\n
Realizing the importance of investment, the government
\ndeclared the year 2003 as Indonesia Investment Year in a campaign
\nto attract more investors to the country.<\/p>\n
Speaking at a press conference on Friday, Coordinating
\nMinister for the Economy Dorodjatun Kuntjoro Jakti said that the
\ncurrent investment data -- issued by the Investment Coordinating
\nBoard (BKPM) -- did not illustrate the real investments being
\nmade in the country because investments in publicly listed
\ncompanies and in the oil and gas sector were not included.<\/p>\n
"We will change the calculation soon by including the above
\nsectors," Dorodjatun said.<\/p>\n
Portfolio investment has been on the rise in Indonesia as
\nevident in the rising stock market value and successful sale of
\nassets under the Indonesian Bank Restructuring Agency (IBRA).<\/p>\n
Trend of Investment Approvals<\/p>\n
------------------------------------------------------
\nYear Domestic FDI<\/p>\n
(Rp billion) (US$ billion)
\n-----------------------------------------------------
\n1997 119.8 33.7
\n1998 57.9 13.6
\n1999 53.5 10.8
\n2000 93.9 16.1
\n2001 58.8 15.1
\n2002 25.3 9.7
\n2003* 2.2 2.4
\n------------------------------------------------------<\/p>\n
* Jan-March
\nSources: The Coordinating Investment Board<\/p>",
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"sponsor": "Okusi Associates",
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