Foreign investment up 16.7% in first semester: Minister

JAKARTA (JP): The government said on Tuesday that foreign direct investment approvals during this year's first semester rose by 16.7 percent to US$2.1 billion from $1.8 billion during the same period last year.

State Minister of Investment and State Enterprises Development Rozy Munir said that until June 15, the number of approved foreign investment projects rose to 589 from 483 during the same period last year.

"So far, this year's investment value has increased by 16.7 percent, while the number of projects rose by 21.9 percent," Rozy said during a hearing with the House of Representatives' Commission V, which oversees trade and industrial affairs.

His office processes all investment applications outside the oil and gas and the financial sectors.

Despite the 16.7 percent increase, investment approval has yet to reached its pre-crisis level, which throughout 1997 amounted to $33.8 billion.

However, the increase marks the first positive trend after foreign investment plunged $10.6 billion in 1999 from $13.6 billion in 1998 and $33.8 billion in 1997.

For this year, the basic metal industry was the most attractive to foreign investors, absorbing $700 million of the total investment approvals during the January-June 15 period.

The textile and chemical industries received about $200 million, the food and trade sectors about $100 million, while the property and construction sectors absorbed about $90 million and $80 million respectively.

Investment from Japan ranked first with 42 projects totaling $900 million, followed by Singapore with 96 projects worth $200 million, England with 28 projects worth $200 million, the United States with 23 projects totaling $80 million and South Korea covering 105 projects worth $70 million.

Last week, however, his office reported that foreign investment approvals in May had dropped by 84 percent to $167.6 million from $1.084 billion in April.

Rozy attributed the drop to legal uncertainties and worsening security conditions in some parts of Indonesia.

On domestic investment approvals, Rozy reported that investment in the first semester rose by 6 percent to Rp 12.3 trillion (US$1.4 billion) from Rp 11.6 trillion during the same period last year.

In terms of numbers, domestic investment approvals rose by 28 percent to 128 projects from 100 projects last year.

Of the approved projects, Rp 3.3 trillion are in the food industry, Rp 2.1 trillion in the chemical industry, Rp 1.6 trillion in the textile and paper industry Rp 0.7 trillion the service sector and Rp 0.4 trillion in the transportation sector. (bkm)