INVESTMENT EXPECTED TO FUEL ECONOMIC GROWTH

By Andi Abdussalam

Jakarta, June 24 (Antara) -- Realization of investment targets in the years ahead will help to boost the country's economic growth, Chief Economic Minister Sofyan Djalil said.          "If we can realize the investment target of Rp5,600 trillion in the next five years, it will result in relatively high economic growth," the coordinating minister for economic affairs stated on Tuesday, referring to the government's low growth target for next year.          Djalil added that the government hopes economic growth in the coming years is supported by government projects, the private sector and national investment. However, as economic conditions are still unfavorable, the country's economic growth target continues to be low.          The government set a lower economic growth target for 2016 at between 5.5 and 6 percent.  This is lower than the previous government's projection of 5.8 to 6.2 percent.          It set the target after taking into consideration that the global economy will continue to face pressures in 2016.          Moreover, Bank Indonesia (BI) has estimated that Indonesia's economic growth in 2016 will be within the range of 5.4 to 5.8 percent.          "The economy is expected to experience low growth for some time in the future due to the downward trend of the world's economy," Djalil pointed out.          Therefore, the government is trying to boost growth through the development of infrastructure and by increasing investment to support industries in various regions, the minister stated.          "We still hope that the economy improves, that the development of infrastructure is carried out expeditiously and that the economy grows faster," he emphasized.          The Capital Investment Coordinating Board (BKPM) has projected an investment realization of Rp519.5 trillion in 2015.          Some Rp282.6 trillion of the investment target is set for Java, Rp19 trillion for Bali and Nusa Tenggara, and Rp33.2 trillion for Papua.          It was reported earlier that some Rp27.8 trillion of the investment will be made in Sulawesi, Rp75.2 trillion in North Sumatra, Rp75 trillion in Kalimantan, and Rp7.2 trillion in Maluku.          As part of efforts to realize the investment plan, the BKPM has conducted roadshows and regional investment potential shows (GPID) in North Sulawesi, North Sumatra and West Nusa Tenggara     "We are now organizing a roadshow in the three cities of Medan (North Sumatra), Manado (North Sumatra) and Mataram (West Nusa Tengara)," BKPM Chief Franky Sibarani had said last month.           In addition, to attract investment, the government has begun to realize various supporting infrastructure projects. It will develop 15 airports to support the country's logistics development.          Among these are Miangas, Pohuwanto, Tojo Una-Una, and Buntu Kunik in Sulawesi; Muara Teweh and Maratua in Kalimantan; and Namniwel in Maluku.          The government is also planning to develop or expand 24 seaports to support its sea toll development program to facilitate the movement of cargo, which is estimated to reach 30 million TEUs in 2020.          He revealed that it included the expansion of the seaports of Bitung and Makassar in Sulawesi; Pontianak, Palangkaraya, Banjarmasin, and Maloy in Kalimantan; Ambon in Maluku; and Hamahera in North Maluku.          Moreover, to meet the energy needs and to accelerate investment, the government is planning to build hydropower plants with a combined capacity of 3,967 megawatts (MW) in North and Central Sulawesi and 6,340 MW in South and Southeast Sulawesi.          Similar power plants will also be built with a combined capacity of 16,844 MW in South, Central, and East Kalimantan, 4,737 MW in West Kalimantan, and 430 MW in Maluku.          To attract foreign investments, the BKPM is also promoting investment among overseas investors, including those from Taiwan and China.          After all, Indonesia still lacks popularity among Taiwanese investors. "If we look at the total investment made by Taiwan abroad, Indonesia lags behind other Asian countries in receiving investment from Taiwanese investors," Sibarani said while receiving Taiwanese investors of the Chinese International Economic Cooperation on Tuesday last week (June 16).          Taiwan is among the investor countries that is given priority in Indonesia. Its total investment in the country reached US$1.5 billion over the past five years.          According to Deputy for Capital Promotional Affairs of the BKPM Himawan Hariyoga, his side was ready to assist Taiwanese investors in Indonesia through representatives of the BKPM in the Indonesia Economic & Trade Office in Taipei and the Taiwanese Marketing Officers Team.          The BKPM will also cooperate with the Bank of China to promote Indonesia's investment potential in the country next July.          In its investment promotional activities next July, the BKPM will meet with regional governments and local businessmen in the provinces of Zhejiang and Fuijian, Sibarani affirmed.          "Cooperation with the Chinese bank will be an effective way to reach potential investors in that country because the bank has an extensive network of customers and partners," he emphasized.          He added that the BKPM had also cooperated with the Bank of Tokyo Mitsubishi (BTMU) when it was visiting Japan last May. The event was attended by some 600 investors who were customers and partners of BTMU.          So far, China has become a strategic partner of Indonesia in the economic field.          China invests in Indonesia directly or through other countries (special purpose vehicles) such as Singapore, Cayman Island, British Virgin Island, Seychelles and others.          Over the past five years, China has invested US$1.61 million with 1,427 projects in Indonesia.          Although the Chinese investment plan in Indonesia has seen an upward trend over the past five years reaching US$23.3 billion, only about 7 percent has been realized.          "Therefore, we are intensifying investment promotional activities in China. We held a business forum in Beijing last May when we were able to attract five Chinese companies to make an investment commitment of US$16.7 billion in Indonesia," the BKPM chief pointed out.          Of their US$16.7 billion commitment, investors have sought principle permits for projects valued at US$700 million and have earmarked US$16 billion for exploring projects in the sectors of energy, mining, and infrastructure as well as in processing and automotive industries.     ***3*** (T.A014/INE) EDITED BY INE (T.A014/A/BESSR/A. Abdussalam) 24-06-2015 21:27: