Thu, 27 Jan 2011

Jakarta (ANTARA News) - Investment realization in Indonesia in 2010 which showed a significant achievement has come almost as no surprise because their agreement date back to two or three years, according to an economic observer.

"Investment realization in Indonesia usually requires two or five years` time so that what was realized in 2010 must have been agreed on in 2005-2008," said Latif Adam, a researcher with the Indonesian Science Institute`s Center for Economic Development, on Wednesday.

Adam was asked for his comment after the Investment Coordinating Board (BKPM) announced last Sunday that the cumulative investment in 2010 realization figure from both foreign investment (PMA) and domestic investment (PMDN) was 208.5 trillion rupiahs, a 54.2 percent increase over the 2009 figure of 135.2 trillion rupiahs.

Compared to the 2010 original target of 160.1 trillion rupiahs, this realization figure has exceeded the target by 302 percent, according to BKPM.

Based on the reality, Adam added that the period of 2005-2008 was a time when Indonesian and global economies were still in favorable conditions, just a year before the global economic downturn in 2008 started. Thus, it was logical that investments were still going strong.

Adam also noted that normally the realization figure for PMDN investment would reach up to 60 percent from the agreed on figures, whereas for PMA even more lower to just about 48 percents.

"We`re going to give a thumb up sign if the realization figures are above 60 percent for PMDN and above 48 percent for PMA. But, if the figures remains around those percentages, then they are just neutral," he added.

Adam regretted the fact that the lion?s share of investments, both for PMDN and PMA had been remaining on Java and West Java whiles those outside Java investment the growth is still stagnant.

There are classical reasons for the lack of investment for other places other than Java in Indonesia, including the lack of infrastructures. The government should take the lead in improving infrastructures outside Java so that investors would also set their eyes on other islands in Indonesia.