Investment realizations reaches $14.8 billion
JAKARTA (JP): The government announced yesterday that the realization of foreign and domestic investments in the country during the first eight months of this fiscal year (April- November, 1994) reached US$14.8 billion.
Minister of Investment Sanyoto Sastrowardoyo said in a hearing with the House of Representative's Commission on Mining and Manufacturing that the amount accounts for 17 percent of Rp 177.3 trillion ($81.7 billion) targeted for the Sixth Five Year Development Plan (Repelita VI), which is to end in March 1999.
"I am optimistic that the realization of investments up to the end of this fiscal year will reach at least 26.25 percent of the total targeted investments for Repelita VI," Sanyoto said.
He explained that of the $14.8 billion, $9.9 billion was for 191 foreign investment projects and the other $4.9 billion for 234 domestic projects.
Of the total, $1.4 billion in foreign investment and Rp 1.5 trillion in domestic investment goes to textile industries.
Petrochemical industries received $1.3 billion of the foreign investments and Rp 1.3 trillion of the domestic investment.
Sanyoto, also chairman of the Investment Coordinating Board, noted that the realization rate for licensed foreign investments currently stands at 51 percent, while that of domestic investments is only 35 percent.
Sanyoto explained that the low rate of domestic investment realization was caused by difficulties in arranging for investment funding.
"Funding is the biggest hurdle for local investors in materializing their projects," Sanyoto said, adding that the other problems are related to land appropriation, infrastructure and marketing.
He noted that, during the first 11 months of this year , his office had approved 413 foreign investment projects worth $23.5 billion, or almost 200 percent over last year's figure of $8.1 billion. His office also approved 811 domestic projects valued at Rp 52.8 trillion ($24.3 billion), or a 40 percent increase from last year.
The minister said next year's licensed foreign investments might not able to break this year's record but said that his office will step up the promotion to attract more foreign investors.
He added that he will lead an investment-promotion mission to the Netherlands and Belgium later this month.
According to a survey conducted by Erns & Young International, a U.S. consulting firm which has offices in various countries, Indonesia is the third most attractive spot for foreign investments after China and India.
When asked, Sanyoto declined to comment on the results of the survey, saying he had not received the report. However, he noted that last June's investment deregulation package made Indonesia much more attractive for foreign investments than ever.
To improve the legal certainty for foreign investors, Sanyoto said, the government is preparing an investment bill to replace the Foreign Investment Law of 1976 and Domestic Investment Law of 1968. (rid)