RI expects rise in domestic investment level
RI expects rise in domestic investment level
JAKARTA (JP): Minister of Investment Sanyoto Sastrowardoyo forecasted yesterday that the value of domestic investment approvals will surpass the value of foreign investments this year.
Speaking at a business meeting promoting investment in the country's eastern provinces, Sanyoto disclosed that during the first four months of this year alone, the government approved 341 domestic investment projects worth Rp 53.2 trillion (US$22.7 billion). During the same period, it approved 409 foreign investment projects worth $16.1 billion.
"This year domestic investment is very likely to be higher than foreign investment," Sanyoto said.
Last year, domestic investment approvals by the government reached Rp 69.9 trillion for 775 projects, up from Rp 53.3 trillion for 823 projects in the previous year.
Meanwhile, foreign investment approvals last year stood at $39.9 billion for 799 projects, up from $23.7 billion in 1994 for 449 projects in the previous year.
Sanyoto noted that foreign investment approvals this year are not likely to reach last year's level. "Last year's figure for foreign investment was just too high."
He added that last year's high level of foreign investment approvals was the result of seven oil refinery projects valued at $12.7 billion.
"If we excluded the seven refineries, last year's foreign investment would have reached only $27.2 billion. That's probably the more realistic number," Sanyoto said.
Petrochemicals
Sanyoto also called on both domestic and foreign investors to enter the upstream petrochemical industry, which he said was in dire need of more investment due the growing demand for plastic products.
He explained that annual plastic utilization currently stands at eight kilograms per capita, far below the ideal for a country with a per capita income of more than $1,000.
"For our income level now, our plastic consumption should be around 32 kilograms per capita per annum. We need four more olefin centers like Chandra Asri," Sanyoto said, referring to a huge olefin plant owned by PT Chandra Asri Petrochemical Center in Cilegon, West Java.
According to data from the Investment Coordinating Board, the high figure for domestic investment approvals during the first four months came mainly from a number of huge projects in the pulp and paper industry, power generation and integrated palm oil plantations and refineries.
The major projects include seven pulp and paper mills, with a total investment of Rp 8.06 trillion, five power plants worth Rp 3.2 trillion, 14 palm oil plantations and refineries worth Rp 3.8 trillion.
Meanwhile, leading foreign investment projects approved during the first four months included three power plants valued at $1.66 billion, seven automotive component projects at $763 million and line chemical projects at $461 million. (rid)