Approved FDI jumps by 113.2% in first half

JAKARTA (JP): The Investment Coordinating Board (BKPM) said on Wednesday that approved foreign direct investment (FDI) jumped by 113.2 percent to US$4.96 billion in the first half of this year compared to the same period last year.

The board said in a statement, however, that the number of FDI projects only increased by 1.2 percent to 666, compared to the same period last year, which saw 658 projects.

The board added that approved domestic investments increased to Rp 37.7 trillion (about $3.9 billion) during the first six months of the year, or 146.9 percent compared to the same period last year.

However, in terms of the number of projects, proposals from local investors dropped 23.9 percent to 124 projects compared to the same period last year.

"The significant increase in the value of projects indicates a gradual recovery in investors' confidence in Indonesia's investment climate," the board said.

Most investors have avoided Indonesia over the last two years, particularly because of political instability, security problems and the economic crisis.

The board, however, did not reveal any data on the realized FDI figure.

Experts said that one of the top priorities of the new government was to sign a new economic deal with the International Monetary Fund.

As part of the efforts to enhance the role of the board in stimulating investments in Indonesia, BKPM is shifting its role as a mere regulatory body to that of a market driven servicing agency.

Theo Thoemion was installed as the new chief of BKPM in June after the post had been vacant for some time.

To achieve that aim, BKPM will resume its function in facilitating import duty on incoming capital goods and raw material, facilitating a value-added tax, facilitating income tax and authorizing proposals for the utilization of expatriates in foreign and local companies, it said.

The board will function as the coordinator and facilitator for the promotion of national investment both in Indonesia and abroad, and will disseminate information on new investment opportunities through the utilization of information and technology.

The board will also establish cooperation with the Investment Advisory Council (IAC) and the Indonesian Investment and Financial Society (IIFS).

The IAC, whose members include representatives from the Indonesian Chamber of Commerce and Industry (Kadin), various associations and foreign chambers of commerce, will give their input to the board chief on items concerning the policies and investment problems.

The society will provide a forum for local and foreign companies, as well as banking and financial institutions to work together, it said in the statement.(tnt)