FDI in January fell by 24 percent: BKPM<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Foreign direct investment (FDI) flows into the country remained
\nweak as FDI approvals in January of this year dropped by nearly
\n24 percent compared to the same period last year, according to
\nthe latest data from the Investment Coordinating Board (BKPM).<\/p>\n
BKPM said on Monday that FDI approvals during the month fell
\nto US$264.4 million from $324.2 million.<\/p>\n
It said that the number of projects plunged by 50 percent to
\n49 projects from 99 projects.<\/p>\n
The agency data was quoted by detik.com as saying that
\ndomestic investment activities were also weak as the number of
\napproved projects fell to seven from 13 in January of last year,
\nalthough the total investment slightly increased to Rp 1.044
\ntrillion (124.28 million) from Rp 1.033 trillion.<\/p>\n
During the past few years, the investment flow into the
\ncountry has been slowing due to a combination of global
\nuncertainty and problems at home including legal uncertainty,
\nsecurity problems, labor conflict, and poor implementation of the
\nregional autonomy law. The strong attraction of China and other
\nneighboring countries offering cheaper labor and stable political
\nconditions have even prompted some investors to shift their
\nbusiness operations.<\/p>\n
The hard gained macroeconomic stability as reflected in the
\nstrengthening of the rupiah, benign inflation and falling
\ninterest rates have not translated into stronger investment
\nactivities.<\/p>\n
Some analysts have said that most investors would likely to
\nstay on the sidelines this year due to the upcoming seven-month
\nelection period.<\/p>\n
The weak investment flow has affected the country's economy
\nwhich has been growing at a meager rate of less than 4 percent
\nduring the past couple of years as growth has been largely driven
\nby domestic consumption while exports and investments remained
\nslow.<\/p>\n
Economists have said that the economy needs to return to its
\npre-crisis growth level of between 6 percent and 7 percent in
\norder to be able to provide enough jobs for the millions of
\nunemployed.<\/p>\n
Elsewhere, BKPM said that the food sector had attracted the
\nmost attention from foreign investors during the month of
\nJanuary, followed by the construction, and chemical and pharmacy
\nindustries.<\/p>\n
Banten Province was the most favored investment place
\nattracting some $101.7 million in approved FDI. In second place
\nwas Gorontalo, which saw an FDI figure of $85.5 million. The
\ndensely populated West Java province was in third place with FDI
\nfigure of $21.2 million.<\/p>\n
England was the largest source of the FDI in January, followed
\nby Brazil and Japan.<\/p>",
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