Investment Realization Rises in 2018

The Investment Coordinating Board (BKPM) of Indonesia published data on the realization of Domestic Capital Investment (PMDN) and Foreign Capital Investment (PMA) in the Third Quarter (July-September) of 2018 which reached Rp173.8 trillion. Compared to the same period last year (Rp176.6 trillion), the realization of the investment declined by 1.6 percent.

“However, the investment realization on January-September 2018 for PMDN and PMA (Rp535.4 trillion), rose to 4.3 percent compared to the same period in 2017 (Rp513.2 trillion),” Head of BKPM Thomas Lembong said at the press conference, at the BKPM office, Jakarta, Tuesday (30/10).

The decline in the Third Quarter of 2018, according to Lembong, was because investors tend to be ‘wait and see’ on the development of US Dollar exchange rate fluctuations which triggered by the raise of US interest rate and the appreciation of US dollar values in global markets, as well as trade war between China and the United States.

The BKPM noted that on the Third Quarter of 2018, the realization of PMDN (Rp84.7 trillion) rose 30.5 percent compared to the same period in 2017 (Rp64.9 trillion), and the realization of PMA (Rp89.1 trillion) fell by 20. 2 percent compared to the same period in 2017 (Rp111.7 trillion).

Furthermore, the top five of the realization of both PMDN and PMA on project location are: West Java (Rp29.3 trillion/16.8 percent); Jakarta (Rp26.2 trillion/15.1 percent); Banten (Rp16.1 trillion/9.3 percent), Central Java (Rp14.3 trillion/8.2 percent); and East Java (Rp11.5 trillion/6.6 percent).

Meanwhile, the top five of realization based on business sector are: Transportation, Warehouse, and Telecommunications (Rp30.4 trillion/17.5 percent); Electricity, Gas, and Water (Rp28.6 trillion/16.5 percent); Mining (Rp16.1 trillion/9.3 percent); Housing, Industrial Estate, and Offices (Rp13.6 trillion/7.8 percent); and Food Industry (Rp13.3 trillion/7.6 percent).

As for the top five of PMA origins are: Singapore with US$1.6 billion (24.2 percent); Japan with US$1.4 billion (21.2 percent); Hong Kong with US$0.5 billion (7.6 percent); Malaysia with US$0.5 billion (7.6 percent) and China with US$0.5 billion (7.6 percent).

The decline in the realization of investment in the Third Quarter of 2018, recognized by Lembong, would certainly be a responsibility for the Government to review and re-evaluate policies that were considered to hamper investment stability.

“The Government will also anticipate external factors that may impact on the realization of investment in Indonesia in the future, such as the economic crisis that hit the developing countries like Turkey and Argentina,” Lembong said, adding that the anticipation is needed to prevent investors from withdrawing their invested capital through the capital market or money market.

In the meantime, Acting Deputy of Investment Implementation Control of the BKPM Farah Ratnadewi Indriani said that the realization of Indonesian labor absorption in the Third Quarter of 2018 reached 213,731 workforces, 89,622 in PMDN projects and 124,109 in the PMA projects.

According to Farah, there are more opportunities for skilled workers in Indonesia along with more sophisticated companies get down to new business sectors. (EN/Humas BKPM/ES)

Translated by: Galuh Wicaksono
Edited by: Yuyu Mulyani