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.