Jakarta, July 27 (Antara) - The government is optimistic of achieving its investment target of Rp678.8 trillion set in the state budget this year.
The government's confidence in achieving the target is based on its investment performance in the first semester of 2017, which had reached Rp336.7 trillion. This is partly due to the fact that Indonesia has been awarded an investment grade rating by international rating agencies.
Head of the Capital Investment Coordinating Board Thomas Trikasih Lembong stated that the investment grade awarded to Indonesia must be followed by efforts to improve the business climate.
Lembong, popularly known as Tom, informed the press on Wednesday (July 26) that President Joko Widodo (Jokowi) had expressed hope that the investment grade rating awarded by several international rating agencies to Indonesia would trigger the inflow of foreign capital investment in the country.
In May, Standard & Poor's upgraded Indonesia's sovereign credit rating to investment grade BBB-, a response to Indonesia's strong fiscal management. The agency's move followed similar upgrades announced by Fitch in late 2011 and Moody's in early 2012.
After receiving the investment grade rating, Indonesia is expected to attract more foreign investment. President Jokowi also expressed hope that foreign capital would reach up to US$10 billion.
"I also have the same hope. I forecast that the inflow would reach $10-15 billion. However, one needs to remember that it is the inflow of foreign capital. It does not automatically mean that it is the inflow of foreign investment based on the foreign investment scheme (PMA) definition," Lembong remarked.
Until the second half of this year, the amount of foreign direct investment from the top five investor countries in Indonesia was recorded at $10.5 billion.
Lembong noted that the negative sentiment about China had no significant impact on the development in investment.
"China's investment continues to rise and its quality is also increasing, from its strength in capital-intensive sectors, such as smelters and infrastructure projects. China's investment also enters labor-intensive sectors, such as tourism, which is very strategic for us," he explained.
Based on the investment realization in the first half of 2017, the top five investor countries are Singapore, at $3.7 billion; Japan, $2.8 billion; China, $2 billion; Hong Kong, $1 billion; and the US, $1 billion.
The largest investor among the five countries in the second quarter of 2017 was Singapore, with FDI reaching US$1.6 billion, followed by Japan, with FDI of $1.4 billion; China, $1.3 billion; Hong Kong, $0.6 billion; South Korea, $0.5 billion.
"Singapore was among the five countries with the largest foreign direct investment in Indonesia in 2017," Deputy for Investment Control of the BKPM, M. Azhar Lubis, said in Jakarta on Wednesday (July 26).
In total (foreign and domestic investment), the realization of investment in the first semester of 2017 has reached Rp336.7 trillion, or about 49.6 percent of the investment target set by the government this year.
"Seeing this figures, we are convinced that the total investment target of Rp678.8 trillion will be reached," Lubis explained.
The BKPM recorded the realization of investment in the first semester of 2017 to have reached Rp336.7 trillion, up 12.9 percent compared to the same period in 2016, which stood at Rp298.1 trillion.
"In the January-June period of 2017, the value of investment realization was recorded at Rp336.7 trillion, accounting for 49.6 percent of the investment target in 2017, which was set at Rp678.8 trillion," Azhar Lubis, said.
The BKPM deputy stated that out of the Rp336.7 trillion, some Rp206.9 trillion was foreign investment, while the remaining Rp129.8 trillion was domestic investment. The investment in the first semester absorbed a total workers of Rp345,323 people.
If the investment realization is calculated quarterly, the investment in the second quarter, or in April-June period of 2017, stood at Rp170.9 trillion, up 12.7 percent compared to the same period in 2016, which was recorded at Rp151.6 trillion. Of this figure, Rp109.9 trillion was foreign investment and Rp61 trillion was domestic investment.
BKPM Chief Thomas Trikasih Lembong remarked that there is investment recovery in the second quarter of this year when compared to the first quarter, from Rp165.8 trillion to Rp170.9 trillion (up 3.1 percent).
This could happen because in the second quarter there were a number of big investments which were realized, he added. "I think, the projects of this investment were significant for the realization of investment," he noted.
Yet, Lembong revealed that the year-on-year investment showed more significant trend than the quarter-to-quarter investment figures. "Year-on-year investment figures show clearer trend that investment was growing. Thus, there are more chances for improving the performance and growth of investment," the BKPM chief said.**3***(A014/INE/o001)
EDITED BY INE(T.A014/A/BESSR/O. Tamindael) 27-07-2017 14:07 |
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