Thursday, 4 July 2013

INCREASE OF INVESTMENT NOT ALWAYS COUPLED WITH LABOR ABSORPTION ENHANCEMENT



The investment coordinating Board (BKPM) recorded that total foreign investment (FI) and domestic investment (DI) during the first quarter of 2013 reached Rp. 93 trillion, or grows 30.6% compared to investment realization in the same period of 2012 amounted to Rp. 71.2 trillion. Increase in investment realization in the first three months of 2013 was driven by improvement of investment climate which continues to be rolled, encouraging the certainty of doing business in the country. Realization of investments during the first quarter of 2013, consisting of domestic investment at Rp.27.5 trillion, surges by 39.6% from the same period in 2012. While, the realization of foreign investment amounted to Rp.65.5trillion increases 27.2% from Rp.51.5 trillion.
               
Realization of domestic investment by the business sector during January-march 2013, the largest investment was Rp.6 trillion in mining; transportation, were house, and telecommunications Rp.6 trillion; food industry Rp.4 trillion; basic metal industries, machinery and electronics Rp1.8 trillion; electricity, gas and water Rp1.7 trillion. While based on the location, the five largest domestic investment areas occurred in east java with a value of Rp.9 trillion, followed by east Kalimantan Rp4.8 trillion, south Kalimantan Rp.3.4 trillion, north Sumatera Rp2 trillion, and Jakarta Rp.1.9 trillion. Meanwhile, for the foreign investment the five biggest investors are Japan reaching USD1.2 billion (16.3%), followed by united states USD0.9 billion (12.6%), South Korea USD0.8 billion (11%), Singapore USD0.6 billion (8.7%), and the united kingdom USD0.5 billion (7.7%).
               
However, the increase of investment was not always accompanied by an increase in employment. Evidently, although the total investment rose, employment and foreign investment in the first quarter of 2013 decreased compared to the same period last year. Chatib Basri, Chairman of BKPM, in Jakarta on Monday (4/22) revealed that employment in the foreign investment sector decreased 14.9% compared to the first quarter of 2012 which reached 250,711 people.
               
In fact, he added, the composition of the absorption of the foreign investment sector accounted for 59% of the total labor force absorbed during the first quarter of 2013 which is as many as 361,924 people. Meanwhile, the domestic investment sector is only able to absorb as much as 41% of the remaining 148,521 people. Chatib sees that more employment is in the capital intensive sector which relatively absorbs more skilled labor. “In fact, we need a labor intensive one”, Chatib said.
               
Seeing the trend, Chatib urged Indonesia to further improve the availability of trained manpower to address the growing trend. Overall, employment in the foreign investment and domestic investment sectors during the first quarter of 2013 only increased 1% from the same period last year, form 358,385 people to 361,924 people. Chatib expects that foreign the domestic investment can provide a multiplier effect on employment by approximately 4 times indirectly.
               
Chatib also recognizes the shift that occurs in the domestic and foreign investment during January-march 2013 to the manufacturing sector which continues to experience significant growth compared to the mining sector. Chatib said that various efforts to improve the investment climate both at the central and local services through one-stop integrated services in the field of investment, provision of attractive investment incentives and integrated campaign has been responded positively by investors both from within and outside the county characterized by increased realization of foreign/domestic investment quite significantly. (E) 


Business News - April 24,2013    

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