Investment Realization in 2018 Reaches Rp721.3 Trillion

The investment realization of domestic investment (PMDN) and foreign investment (PMA) in 2018 reached Rp721.3 trillion, 4.1% higher compared to that of 2017, according to the Investment Coordinating Board (BKPM).

“Investment in 2018 reached 94.3% of targeted realization of the RPJMN (National Medium-Term Development Plan) which is Rp765 trillion,” Head of the BKPM Thomas Lembong said during a press conference in Jakarta, Wednesday (30/1).

Lembong added that total realization of domestic investment in 2018 reached Rp328.6 trillion, 25.3% higher compared to that of 2017 with Rp262.3 trillion, while total realization of foreign investment in 2018 is Rp392.7 trillion, 8.8% lower compared to realization of foreign investment in 2017 with Rp430.5 trillion.

Lembong went on to say that investment realization in 2018 is a result of the previous year’s efforts. Lack of policy implementation and constraints of external factors has affected the slowdown in investment this year, he said.

“The transition of licensing to the OSS System has affected the trend of investment slowdown this year, but we believe that improvement of the OSS System and pro-investment policies that are more effective than those of previous year will increase investment realization,” Lembong explained.

Furthermore, Lembong said that investment realization in 2018 was dominated by infrastructure sector such as power plants, toll roads, and telecommunications.

With the development of the telecommunications industry, Lembong expressed hope that digital technology-based industries and unicorn startups can continue to grow in the upcoming years.

“We take (those factors) into consideration in providing fiscal facilities in the form of tax holiday for digital economy industry,” Lembong said.

For the record, the top five investment realization (domestic and foreign investment) based on the business sector are: Electricity, Gas and Water (Rp117.5 trillion, 16.3%); Transportation, Warehouse and Telecommunications (Rp94.9 trillion, 13.1%); Mining (IDR73.8 trillion, 10.2%); Food Industry (Rp68.8 trillion, 9.5%); and Housing, Industrial Zones and Offices (IDR 56.8 trillion, 7.9%).

Based on the location, investment realization in Java in 2018 was Rp405.4 trillion, 4.0% higher than the realization of investment in 2017 with Rp389.9 trillion, and the realization of investment outside Java amounting to Rp315.9 trillion or 4.3% higher than the realization of investment in 2017 with Rp302.9 trillion.

“The higher investment outside Java is one of the achievements that we believe can be improved in the upcoming years,” Thomas Lembong added.

The top five investment realization (domestic and foreign investment) in 2018 based on project location are: West Java (Rp116.9 trillion, 16.2%); DKI Jakarta (IDR 114.2 trillion, 15.8%); Central Java (Rp59.3 trillion, 8.2%); Banten (Rp56.5 trillion, 7.8%); and East Java (Rp51.2 trillion, 7.1%), while the top five investment realization of foreign investment based on country of origin are: Singapore (US$9.2 billion, 31.4%); Japan (US$4.9 billion, 16.7%); China (US$2.4 billion, 8.2%); Hong Kong (US$2.0 billion, 6.8%); and Malaysia (US$1.8 billion, 6.2%).

Of the total investment, investment realization in the fourth quarter (October – December) of 2018 was Rp185.9 trillion or 25.8% of the realization in 2018. During the fourth quarter of 2018, domestic investment realization was Rp86.9 trillion, 28.6% higher than Rp67.6 trillion in the same period in 2017, and foreign investment realization was Rp99.0 trillion, 11.6% lower than Rp112.0 trillion in the same period in 2017.

In the meantime, Acting Deputy for Investment Implementation Control of the BKPM Farah Ratnadewi Indriani explained that the realization of employment in Indonesia in the fourth quarter of 2018 reached 255,239 workforces, 142,478 of them in national investment projects and 112,761 are in foreign investment projects.

Farah added that along with digital economy, Indonesia has other attractive investment sectors to be explored in 2019 such as lifestyle, Industry 4.0 and tourism industry, all of them will absorb the workforce. (EN/Humas BKPM/ES)

Translated by: Ridwan Ibadurrohman
Edited by: Yuyu Mulyani