Foreign direct investment on upward trend: BKPM
Foreign direct investment on upward trend: BKPM
Urip Hudiono, The Jakarta Post, Jakarta
Foreign direct investment (FDI) is maintaining its upward trend,
data from the Investment Coordinating Board (BKPM) shows, ahead
of a possible slowdown due to rising fuel prices and interest
rates, and jitters resulting from the Bali bombings.
BKPM announced on Thursday that actual investment realization
-- from both domestic and overseas sources -- in the first nine
months of the year had increased two-fold from the same period
last year, reaching a total of Rp 84.5 trillion (some US$8.45
billion).
FDI realization for the January to September period alone,
BKPM chairman Muhammad Lutfi said, had more than doubled to $7.64
billion, from $2.94 billion in the corresponding period a year
earlier.
New FDI being realized in the transportation, warehousing and
communications sectors led the advance with 44 projects valued at
$2.19 billion, ahead of 32 projects worth $1.09 billion in the
chemical and pharmaceutical industry, and 26 projects worth $891
million in the construction sector.
The bulk of FDI realization came from Singapore (84 projects
worth $2.09 billion), the U.K. (58 worth $1.22 billion), and
Japan (111 worth $983 million).
Domestic investment, meanwhile, which grew by nearly 21
percent to Rp 11.97 trillion until the year's third quarter, were
mostly in the food processing industry (with 28 projects worth Rp
2.7 trillion), followed by the agriculture and plantation sector
(10 projects worth Rp 1.58 trillion), and the textile industry
(18 projects worth Rp 1.5 trillion).
In total, domestic and foreign investment realization had
provided jobs for 197,643 workers, according to the data.
Other parts of the BKPM report show that total investment
approvals also increased by nearly 23 percent to a value of Rp
139.5 trillion in the third quarter compared to the same period
last year, with FDI approvals alone rising some 28 percent to Rp
101.29 trillion, representing around 72% of total investment
approvals.
The government is targeting Rp 179 trillion worth of
investment approvals for 2005, with at least Rp 50.1 trillion
being actually realized within the same year.
Indonesia is struggling to lure back foreign investment --
which reached a peak of $39.66 billion in 1995, but then
collapsed to $13.64 billion following the 1997-1998 Asian
financial crisis -- with the government vowing to curb corruption
and bureaucratic red-tape, guarantee legal certainty and improve
the country's infrastructure.
On concerns that a recent concoction of rising fuel prices,
inflation, higher interest rates, and the latest Bali bombings
may hamper further investment growth, Lutfi remained upbeat that
the year's target would be achieved.
"It will, of course, increase the risk and cost of investment,
but investors still see Indonesia's large market as the main
attraction," he said.