Investment in Indonesia Increases: Government

Jakarta Globe, July 26, 2010

Office buildings in Jakarta. Domestic and foreign investment in Indonesia increased 40 percent in the second quarter of 2010 from the same period a year ago. (JG Photo/ Afriadi Hikmal)

Jakarta. Investment in Indonesia, including from both foreign and domestic investors, rose 40 percent in the second quarter of 2010 from the same period a year ago, said the country’s investment chief Gita Wirjawan on Monday.

The increase could show that strong economic growth and increasing consumer demand in Indonesia is leading more investors to make longer-term bets on the country, which has struggled to attract as much foreign direct investment as regional peers.

“Q2 investment growth rose more than 40 percent in total, year-on-year. Both domestic and foreign investment grew significantly. Investor confidence to our investment climate improved,” Wirjawan said after a meeting of government ministers.

He did not give the total investment level or a breakdown between foreign and domestic investment, but said further details would be released this week.

The state investment agency forecast that foreign direct investment would rebound 15 percent this year, after falling 27 percent to $10.8 billion last year.

Foreign investors staked $3.8 billion in Indonesia in the first quarter of 2010.

Indonesia has so far failed to match the levels of direct foreign investment attracted into regional powerhouses China and India, as investors are often put off by red tape, rampant corruption, and a shaky legal system.

Investors have, however, poured into the country’s markets in the past year, with the stock index and net foreign ownership of local debt both hitting record highs this month.

Reuters

Related Article:

BKPM Uses Different Methodology to Report Sharp Rise in Indonesian Investment