FDI approvals jump by 68.6% in first four months
FDI approvals jump by 68.6% in first four months
Adianto P. Simamora, The Jakarta Post, Jakarta
Foreign direct investment (FDI) approvals rose by 68.6 percent in
the first four months of this year to US$3.1 billion from the
same period last year, the office of the Coordinating Minister
for the Economy said in a press release on Friday.
"It shows that existing (foreign) investors remain interested
in developing business in the country," the ministry said.
However, domestic investment approvals did not follow the
sharp increase in the FDI.
Approved domestic investment plans dropped by 51.6 percent to
Rp 4.2 trillion ($471.91 million) in the first four months of
this year compared to the same period in 2002.
Investment approvals have been declining after the country was
hit by the economic and political crisis of 1998.
In 2002, FDI approvals plummeted by 35 percent to $9.7 billion
from the previous year of $15.06 billion, while domestic
investment approvals dropped by 57 percent to Rp 25.26 trillion,
from 58.62 trillion.
Experts have long warned that the country's pressing problems
of legal uncertainty, security problems and poor implementation
of regional autonomy had been some of the factors that have
discouraged both foreign and domestic investors from investing
here.
Boosting investment is vital for the recovery of the country's
ailing economy to help create new jobs for millions of unemployed
people and prop up economic growth.
The economy grew at a slower rate in the first quarter of this
year due to slow domestic consumption and falling investments.
Realizing the importance of investment, the government
declared the year 2003 as Indonesia Investment Year in a campaign
to attract more investors to the country.
Speaking at a press conference on Friday, Coordinating
Minister for the Economy Dorodjatun Kuntjoro Jakti said that the
current investment data -- issued by the Investment Coordinating
Board (BKPM) -- did not illustrate the real investments being
made in the country because investments in publicly listed
companies and in the oil and gas sector were not included.
"We will change the calculation soon by including the above
sectors," Dorodjatun said.
Portfolio investment has been on the rise in Indonesia as
evident in the rising stock market value and successful sale of
assets under the Indonesian Bank Restructuring Agency (IBRA).
Trend of Investment Approvals
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Year Domestic FDI
(Rp billion) (US$ billion)
-----------------------------------------------------
1997 119.8 33.7
1998 57.9 13.6
1999 53.5 10.8
2000 93.9 16.1
2001 58.8 15.1
2002 25.3 9.7
2003* 2.2 2.4
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* Jan-March
Sources: The Coordinating Investment Board