Rabu, 08 Februari 2017

GOVERNMENT CONVINCED INVESTMENT CAN CONTRIBUTE TO ECONOMIC GROWTH

by Andi Abdussalam
          Jakarta, Feb 8 (Antara) - The government believes that investment will gradually contribute to economic growth in the country in line with its efforts to improve the investment climate.
         According to Coordinating Minister for Economic Affairs Darmin Nasution, it is always difficult to increase investment, but the government has something that it could offer.
         In terms of regulations, Indonesia is now in a better position to open up opportunities for investors to invest in Indonesia.
         The government has issued economic policy packages and optimized its services through the One-Stop Integrated Service.
         "We continue to make improvements, so that our efficiency increases and helps to attract investors. This is a serious struggle (to increase investment), and we are still moving slowly (towards that target). We cannot make a successful jump all of a sudden. You cannot expect that investment would increase by six to seven percent; it is impossible," Nasution stated.
         Earlier, the Central Bureau of Statistics had recorded that household consumption, standing at 5.02 percent in 2016, still constituted the biggest contributor to the economic growth.



         The formation of gross fixed capital grew by 4.48 percent. The investment sector slowed down to some extent, but it also slightly contributed to the national economy.
         The government is targeting an economic growth of six percent in 2018, far higher as compared to achieving an economic growth of 5.02 percent last year. This year's target is set at 5.1 percent.
         In order to achieve high economic growth while relying on household consumption, the growth is also expected to be supported by investment, which is targeted to grow by eight percent, hence it would help to realize the target.
         Indonesia has, since September 2015, launched a dozen economic policy packages aimed at streamlining investment licensing procedures, creating ease of doing business, and attracting more foreign investment into Indonesia.
         Besides this, the Capital Investment Coordinating Board (BKPM) has also been conducting intensive investment promotions in various countries in Asia, Europe, America, and Australia.
        The government set an investment target in 2016 at Rp594.8 trillion, comprising Rp386.4 trillion  foreign investment or 53.9 percent  and Rp208.4 trillion domestic investment or 45.1 percent
    Investment realization in Indonesia reached Rp612.8 trillion in 2016, surpassing the set target of Rp594.8 trillion.

         "The realization of investment from January to December 2016 reached Rp612.8 trillion, increasing by 12.4 percent, as compared to Rp545.4 trillion in 2015," Azhar Lubis, the deputy for capital investment implementation control of the National Investment Board (BKPM).
         Lubis explained that the realization of domestic investment was recorded at Rp216.2 trillion, up 20.5 percent, while foreign investment realization reached Rp396.6 trillion, or increased by 8.4 percent.
         In the fourth quarter of 2016 or from October to December 2016, investment realization totaled Rp159.4 trillion, increasing by 9.6 percent compared to the same period in 2015.
         The realization of domestic investment during the period reached Rp58.1 trillion, up 25.8 percent, while foreign investment was recorded at Rp101.3 trillion, growing by 2.1 percent.
          Some 434,466 workers were absorbed in the fourth quarter of 2016, while the annual figure had reached 1,392,380.
         Thomas Lembong, the BKPM head, noted that as compared to 2015, the growth was significant, especially with regard to domestic investment.
         "Domestic investment grew two folds bigger than the foreign investment," he pointed out.
         He said 2015 was a difficult year for domestic investors owing to various incidents that had dampened their confidence.
         "There was the AirAsia incident, peatland fires, and also political problems. Thank God, however, based on our data, domestic sentiment continued to improve in 2016, causing quite a major leap," he noted.
         Lembong stated that investors had begun welcoming the changes made by President Joko Widodo and Vice President Jusuf Kalla.
         "I feel that investor confidence is at the highest positive level. Hence, we must maintain it. We, as part of the cabinet's economic team, will maintain the positive momentum as well as the reform efforts and investor confidence," he added.
          For this purpose, Chief of the National Development Planning Agency (Bappenas) Bambang Brodjonegoro has urged the regional governments to boost investment in a bid to achieve the economic growth target of over 6 percent for 2018.
         "We want to stress once again that investment will be the focus for the economy in 2018. Hence, regional governments must really boost investment growth," he stated at a quarterly consultation meeting between Bappenas and regional development planning agencies (Bappeda) last month.
         Global economic developments, particularly in the US and China, would undoubtedly have a major impact on investment in Indonesia.  In fact, investment is the main engine of economic growth now and in the future, he emphasized.
         "Hence, the challenge is that on one hand, investment is an engine of national and regional economic growth, while on the other hand, investment will be affected in case of upheavals in the world's two largest economies. Hence, maintaining (a favorable) investment climate is of great significance," he stated.
           Bappeda should call on the regional heads, heads of regional agencies and offices, as well as other parties to continue to maintain the investment climate.
            "Maintaining an investment climate is of great significance. We must look at which sectors attract investors more quickly, and the sectors are not only limited to manufacturing or services but also infrastructure. Hence, we must look at all possibilities. The important aspect is that there is investment in regions," he noted.
            In addition, he suggested that regional governments must be open to foreign investment, as there is still limited domestic investment.
            The spirit to prioritize domestic investment is good. However, the fact is that domestic investors are not as capable as their foreign counterparts, he added.***3***
(A014/INE)EDITED BY INE/H-YH(T.A014/B/BESSR/A/Yosep) 08-02-2017 16:57:0

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