51 billion reasons to invest in Indonesia

51 billion reasons to invest in Indonesia
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By Tito Summa Siahaan 

A worker walks past crates at the Coca Cola Amatil plant in Cibitung, Indonesia, on May 14, 2013. The nation’s strong consumer market is expected to drive investment, the Investment Coordinating Board (BKPM) said. (EPA Photo/Adi Weda) Growth in the consumer goods and manufacturing sectors will push actual investment in Indonesia to a record high next year, up one-third on the expected 2013 result, a senior government official says. There will be Rp 504 trillion ($51 billion) in domestic and foreign investment realization next year, a 29 percent increase from this year’s Rp 390 trillion, predicted M. Chatib Basri, the chief of the Investment Coordinating Board (BKPM). The figures do not include the oil-and-gas sector. Investments already in the pipeline give the government confidence the target will be achieved, said Chatib, who was also last month appointed as finance minister. “As of last year, the cumulative amount of investment in the pipeline was Rp 860 trillion. Adding to that the first quarter this year, it should be around Rp 1,000 trillion,” he said after meeting with legislators at the House of Representatives building on Monday. “Generally, it takes two or three years for investment to be realized.” Chatib admitted that the 2014 national elections could put investors in a “wait-and-see” mode, but he said ongoing difficulties in mature economies overseas would make Indonesia appear a more attractive destination. Chatib said foreign investors would constitute 75 percent to 77 percent of total realized investment next year. “I want domestic investors to contribute 30 percent, but apparently they still need more support,” he added. Chatib said that Singapore would remain the top source of foreign direct investment in Indonesia due to its status as a financial hub. “Number two is Japan and followed by South Korea, with the possibility of South Korea surpassing Japan as they are very aggressive [in investing in Indonesia],” he said. Much of the investment will go to the consumers goods sector, he added, with the mining sector losing its attractiveness due to falling global commodity prices. The minister said the government hoped that investment from Foxconn, a Taiwan-based electronics maker, is among the Rp 504 trillion in realized investment expected next year. “Negotiation on Foxconn’s investment is nearing its end. They will start by making phones and then more will follow,” he said of the company that last week signed a deal with Indonesian mobile phone distributor Erajaya Swasembada. The Jakarta Globe

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