GOVT UPBEAT OVER UPWARD INVESTMENT TREND

By Andi Abdussalam

Jakarta, May 21 (ANTARA) - Indonesia's investment climate is improving  and investment is showing an obvious upward trend as in the first quarter of this year.          With the upward investment trend, the government is convinced that it would be able to boost investment this year to a figure of Rp2,200 trillion. "We are optimistic we can draw up to Rp2,200 trillion worth of  domestic and foreign direct investment," Coordinating Minister for Economic Affairs Hatta Rajasa said here on Friday.          Not only domestic investment, foreign investment is also showing an increasing trend. "The trend of foreign investment in our country is rising. Japan for example, is also interested in developing industrial zones in Indonesia," he said.          According to Chief of the Investment Coordinating Board (BKPM) Gita Wirjawan, investment in the first quarter of 2010 was showing a positive trend  and was expected to continue until the end of the year.          "We have set a target of a 15 percent increase as compared to that last year, but the upward trend in the first quarter which almost reached 25 percent indicates a good momentum for Indonesia to make bigger investment," the BKPM chief said.          He said that considering the licenses that had been issued, the investment trend would continue to increase. "I am optimistic with the figures in the first quarter. Usually investment in the first quarter is slow but this time it is an exception," he said.          At least Rp42 million have been invested in the first quarter of this year. "Investment in the first quarter of this year reached Rp42.1 trillion consisting of 574 projects," Wirjawan said. Foreign investment was recorded at Rp35.4 trillion or US$3.8 billion in 424 projects while domestic investment accounted for Rp6.7 trillion in 150 projects.          The biggest foreign investment was made in the transportation sector, warehouses and communications amounting to US$941.5 million in 23 projects. In the meantime, the biggest domestic investment of Rp1.9 trillion was made in seven projects in the transportation sector, warehousing and communications.          In the meantime, Achmad Zen Umar Purba, an observer who is also chairman of the Aji Nugroho Reksodiputro Foundation (ABNR), said that in order to achieve an economic growth target of about seven percent in 2014, Indonesia needed a big foreign investment.          "At present, developing countries are competing to attract foreign investors," Achmad Zen Umar Purba told a seminar recently.          He said to achieve 7.0 percent economic growth in the future, at least an investment of  up to Rp2,000 trillion would be needed every year.          For this purpose, he said, Indonesia needed to increase its investment through foreign investors. This was because the state budget was only able to provide 20 percent of the Rp2,000 trillion it needed to invest annually until 2014.          He said that Indonesia was still far behind other ASEAN countries in attracting foreign investors. This was reflected in the report "Doing Business in 2010" issued by the World Bank where Indonesia occupied the 122nd position among 180 countries.          Thailand was ranked in the 17th position in the list followed by Malaysia in the 23rd position and Vietnam in the 93rd position. Singapore occupied the first rank.         Therefore, the government has to work hard to attract more investment. For the development of the infrastructure alone to generate economic growth at 7.7 percent in 2014, it will need an investment of Rp1,500 trillion.          Hatta Radjasa  said the development of infrastructure projects were vital for improving connectivity among regions in the country.          "The projects include 20,000 kilometers of road construction   and improvement, 15,000 megawatt electricity plants and expansion  of main ports and development of new ports that would be integrated with the special economic zones," he said.          He said part of the investment would also be used to finish the dry port project in 2010, increase the capacity of railways in Sumatra, Java and Kalimantan and "the development of double tracks to promote delivery of coal and other commodities in Sumatra and Kalimantan as of 2011."     The minister said growth should be spread across the country through  synergizing central and regional policies. "The synergic central and regional policies include development of prime sectors or products and clusters to increase added value. Such policies also include debottlenecking and development of new economic growth centers and planning of special economic zones and extension of supporting incentives," he said.          With regard to investment growth he said coordination would be done to eradicate sectoral egoism, reduce real interest to promote long-term financing and seek alternative funding resources including from the workers' insurance firm Jamsostek and Pension Fund insurance programs.          Hatta said an investment of up to Rp10,000 trillion for the next five years was needed of which 50 percent were to come from private parties national or foreign to assure achievement of economic growth.          To achieve economic growth as has been targeted until the end of 2014 exports are expected to grow to US$200 billion until the year.          "It could be achieved by improving competitiveness of the Indonesian companies, investment atmosphere and penetration of Indonesian products into global markets especially in East Asia," he said.        (T.A014/a/H-NG/a014)21-05-2010 23:33: