BKPM sees investment grow 11.1% next year

The Jakarta Post, Jakarta

The government is targeting a relatively conservative level of growth in realized domestic and foreign investment for next year as the economy recovers from the recent instability in the macroeconomic sector.

Investment Coordinating Board (BKPM) chairman Muhammad Lutfi said on Tuesday that investment would grow by some 11.1 percent next year, with the government currently preparing a number of new policies to attract investment.

"The BKPM sees no difficulties in attaining the target because there will are a number of new policies in the pipeline, including the finalization of the new investment legislation by the government," said Lutfi after meeting President Susilo Bambang Yudhoyono.

Susilo is currently completing the investment white paper, which it is hoped will create a more conducive climate for the business community, before it is submitted to the House of Representatives for deliberation later this month, he said.

It is estimated that combined realized domestic and foreign investment this year will reach Rp 110 trillion (US$11.31 billion) on the back of a total of 1,030 projects, an 88.02 percent increase over the same period last year.

Realized domestic investment will stand at Rp 28.4 trillion, while realized foreign investment will be at around Rp 82.46 trillion for the period.

Although there has been a sustainable growth in the number of realized investments since the financial crisis of 1998, Lutfi said he remained concerned over the imbalances in investment, which was concentrated in 13 provinces.

"The investment is mostly centered on 13 provinces due to the availability of adequate infrastructure to support economic activities in these areas.

"We will be focusing on making more provinces attractive to investment next year," he said.

Among the areas that have investment potential is Ronte Island in Nusa Tenggara Barat, which could be developed for tourism.

The government has set itself a target of average growth amounting to 6.6 percent for the 2004-2009 period. If this target was achieved, it is hoped that unemployment could be cut to 5.5 percent and the number of people living below the poverty line reduced to 17 million by 2009.