The value of mobilized domestic investment doubled this year as confidence in the country's economy increased, the Investment Coordinating Board (BKPM) says.
New BKPM head Gita Wirjawan told a hearing of the House of Representatives' Commission VI overseeing trade, business and state enterprises on Monday that from January to October, the total value of domestic investment soared by just over 100 percent to Rp 32.47 trillion (US$3.44 billion) from Rp 15.88 trillion in the same period in 2008.
The number of projects financed was 212, up from 194 last year.
Approved domestic investment commitments also increased in value. As of the end of October BKPM has issued approvals for 233 projects with a total investment value of Rp163.75 trillion, a 20 percent increase on 136.17 trillion in 2008.
Gita said the rise in domestic investment commitments and realization reflected that the economy had fared despite the global downturn.
The BKPM deputy for the investment development climate Yus'an said the increase was only natural given the sky-high investment performance in 2006 and 2007, the years when the earlier approvals for the realized investments were given.
Approved domestic investment planned in 2006 was valued at Rp 162.77 trillion. The value increased to Rp 188.87 trillion in 2007, the highest ever recorded in the country.
"2007 was also the year the investment law was deliberated, followed by the issuance of the government regulation on tax incentive for both domestic and foreign investors. That's why there was a huge interest in investing in the country," he said.
Gita said the realization of domestic investment projects was concentrated in Java and several regions that had natural resources.
"The dominant realized investment sectors by value were in chemicals and pharmaceuticals, the food industry, electricity, gas, water and construction," he added.
According to Yus'an, BKPM is targeting to increase the value of realized domestic investment for 2010 to around Rp 120 trillion.
But Gita noted that while overseas-funded projects increased from 950 to 1,008 in 2009, total realized overseas investment value fell from $13.93 billion in 2008 to $9.92 billion this year, down 28.8 percent.
In line with the global economic downturn, Indonesia therefore saw a slump in the total value of realized foreign investment projects.
"In total, we target to see Rp 220 trillion of realized domestic and foreign investment for 2010. Traditionally, foreign investment contributes 70 percent of the whole, but this current unexpected trend with our domestic investment has led us to target that realized domestic investment could match that of foreign investment," he said.
Seeing good prospects for domestic investment, Gita said he would push for positive discrimination for domestic investors.
He is working on a general plan for investment, which will focus on improving the business climate in the country by, among other things, the establishment of a one-stop integrated service to standardize and simplify the investment process. (adh)
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