~FOR INDUSTRIAL ESTATES -- August 29

~FOR INDUSTRIAL ESTATES -- August 29

;JP;CD;
ANPAd..r..
Investment-approval-trend

Foreign investment starts coming back

After years of slumping, foreign direct investment in
Indonesia has started to gain ground amid an improved confidence
in doing business in the country.

Business activities have begun to increase, as seen in the
sharp increase in the amount of money spent to set up new
businesses during the first seven months of the year.

According to data from the Investment Coordinating Board
(BKPM), the value of realized foreign investment from January to
July nearly doubled to US$4.9 billion from $2.49 billion in the
same period last year, exceeding the $4.57 billion recorded in
all of 2004.

In terms of the number of projects, realized foreign
investment during the January to July period rose 90 percent to
566 projects from 300 projects in the same period the previous
year.

Foreign investors seem to be more enthusiastic about investing
here, as indicated in the amount of money they spent during the
first seven months of the year. The value of realized domestic
investment in the same period was almost unchanged.

Although in terms of the number of projects, domestic
investment rose more than 100 percent to 137 projects from 65
projects in the previous period, their total value only rose
slightly to Rp 9.69 trillion from Rp 9.39 trillion.

The majority of the foreign investment projects were located
in West Java, with a total value of $1.79 billion and 124
projects, Greater Jakarta ($1.23 billion, 209 projects), East
Java ($552.2 million, 30 projects), Banten ($511.5 million, 47
projects) and South Sumatra ($123 million, three projects).

A similar trend was seen in the approval of fresh investment
projects. According to data from the BKPM, foreign investment
approvals rose 80 percent to $6.63 billion (949 projects) from
January to July of this year, from $3.71 billion (713 projects)
in the same period last year.

Domestic investment approvals surged to Rp 31.51 trillion (136
projects) from Rp 28.71 trillion (120 projects).

With Indonesia still struggling to lure back investment, the
BKPM data should provide fresh hope of a return of foreign
investment, which is badly needed to quicken the pace of economic
growth.