Discrepancy in Indonesia's FDI Data Not a New Phenomenon, Says Economist
JAKARTA. The latest report from the United Nations Conference on Trade and Development (UNCTAD) shows that realised foreign direct investment (FDI) into Indonesia throughout 2024 amounted to only US$24.21 billion, or approximately Rp363.18 trillion (based on the 2024 state budget exchange rate assumption of Rp15,000 per US dollar).
However, this figure is far removed from data published by the Ministry of Investment/Investment Coordinating Board (BKPM), which recorded FDI at Rp900.2 trillion in the same year. The discrepancy is significant, reaching Rp537.02 trillion.
Paramadina University economist Wijayanto Samirin said the difference in direct investment data is not a new phenomenon.
"This data discrepancy is nothing new, and it's not only between UNCTAD and BKPM. Even between Bank Indonesia (BI) and BKPM there are always differences, with BKPM data consistently being far higher," Wijayanto told Kontan on Friday (20/6).
According to him, the differences may stem from non-uniform calculation methods. BI data places greater emphasis on funds that have actually entered the country on a cash flow basis, whereas BKPM may include investment commitments that have not been fully realised.
Meanwhile, Wijayanto suggested that BKPM possibly uses a different approach, for instance calculating investment commitments or using a non-cash basis approach, whereby commitments that have commenced are considered fully realised even though they have not been completed.
"Alternatively, BI may only calculate the foreign investment portion, while BKPM calculates the total investment value, including the domestic investor portion," he explained.
Furthermore, Wijayanto emphasised that differences in institutional missions also influence the figures presented, noting that the performance of UNCTAD and BI is not measured based on investment values.
"Unlike BKPM, there is a possibility that BKPM's measurement methodology is biased upwards," he explained.
For this reason, Wijayanto considers it necessary to harmonise methodologies so that the available data can serve as a more credible foundation for the formulation and evaluation of government policy.
Wijayanto added that BKPM is obliged to explain the measurement methods used when announcing foreign investment realisation figures.
However, this figure is far removed from data published by the Ministry of Investment/Investment Coordinating Board (BKPM), which recorded FDI at Rp900.2 trillion in the same year. The discrepancy is significant, reaching Rp537.02 trillion.
Paramadina University economist Wijayanto Samirin said the difference in direct investment data is not a new phenomenon.
"This data discrepancy is nothing new, and it's not only between UNCTAD and BKPM. Even between Bank Indonesia (BI) and BKPM there are always differences, with BKPM data consistently being far higher," Wijayanto told Kontan on Friday (20/6).
According to him, the differences may stem from non-uniform calculation methods. BI data places greater emphasis on funds that have actually entered the country on a cash flow basis, whereas BKPM may include investment commitments that have not been fully realised.
Meanwhile, Wijayanto suggested that BKPM possibly uses a different approach, for instance calculating investment commitments or using a non-cash basis approach, whereby commitments that have commenced are considered fully realised even though they have not been completed.
"Alternatively, BI may only calculate the foreign investment portion, while BKPM calculates the total investment value, including the domestic investor portion," he explained.
Furthermore, Wijayanto emphasised that differences in institutional missions also influence the figures presented, noting that the performance of UNCTAD and BI is not measured based on investment values.
"Unlike BKPM, there is a possibility that BKPM's measurement methodology is biased upwards," he explained.
For this reason, Wijayanto considers it necessary to harmonise methodologies so that the available data can serve as a more credible foundation for the formulation and evaluation of government policy.
Wijayanto added that BKPM is obliged to explain the measurement methods used when announcing foreign investment realisation figures.