Tue, 09 Mar 2010

TEMPO Interactive, Jakarta:The government is targeting an increase in direct foreign investment.

According to The Investment Coordinating Board (BKPM) chairman Gita Wirjawan, Indonesia has only been able to attract 0.17 percent of total foreign investment in the world.

Whereas, he added, Indonesia has the potential to attract 0.75 percent of total foreign investment with the current economic development.

China can attract between US$60 billion and US$100 billion per year, while India can attract between US$30 billion and US$50 billion per year.

“Even Malaysia has already surpassed Indonesia in foreign direct investment,” said Gita at the “Socialization of Capital Investment Policy” event in Cipanas, West Java, on Friday.

During the last two years, the value of global investment has decreased.

Last year global investment decreased to US$1.2 trillion from US$1.7 trillion in 2008.

“But with the global economic recovery, this year investment is predicted to increase to US$1.4 trillion and in 2011 it is predicted to amount to US$ 1.8 trillion," said Gita.

According to BKPM data, the realization of foreign investment in Indonesia last year decreased more than 27 percent to US$10,.8 billion from US$14,.8 billion in 2008

During 1990-2009, according to BKPM data on its website, the highest realization of foreign direct investment in Indonesia occurred in 2008.

The investment realization value above US$10 billion occurred from 2007 to 2009.

In previous years, foreign direct investment realization was still below US$10 billion.

He admitted that the competition to attract foreign investment was very tight.

Indonesia has to compete with developing countries and also with developed countries.

If Indonesia wants to reach investment target of Rp2,000 trillion per year and maintain an economic development rate of 5-7 percent per year, according to Gita, it needs a new paradigm.

“Even China prepares it for 20 years. Indonesia also needs to prepare this,” he said.