Thursday, 13 February 2014


Realization of investment projects in quarter IN [October-December] 2013 was posted at Rp 105.3 trillion; for the second time since quarter III/2013 investment realization broke through Rp 100 trillion. Such was the latest data of the Coordinating Board of Investment [BKPM].

Compared to attainment of the same period of 2012, there had been increasing investment realization of Quarter I to IV were accumulated, total investment realization 26.4% of Rp83.3 trillion. If investment realization project [January-December] was Rp398.6 trillion consisting of realization of investment of quarter I Rp93 trillion, quarter II Rp99 trillion, quarter III Rp100.5 trillion and quarter IV Rp105.3 trillion. The investment realization attainment exceeded BKPM investment target of 2013 amounting to Rp390.3 trillion.

In quarter IV 2013 realization of Domestic Investment [PMDN] came to Rp34 trillion and realization of Foreign Investment [PMA] amounting to Rp71 trillion while total realization of PMDN Investment came to Rp128 trillion and realization of PMA amounting to Rp270.4 trillion.

By year on year, growth of Domestic Investment [PMDN 2013] was highest growth since 2010with increased price of 39%. Improvement of business through one-stop service and fostered coordination with the provincial Government proved BKPM’s seriousness to perform which showed result in PMDN growth.

Based on area-based investment distribution in quarter IV 2013 or through January-December 2013, investment in Java was greater than outside Java. Investment yields in Java in quarter IV was posted at Rp61.7 trillion and investment realization outside Java was Rp43 trillion while in period of January-December 2013 investment realization in Java was Rp230 trillion and outside Java Rp168 trillion.

Investment realization over the period of January-December 2013 based on 5 biggest business sector was electricity, gas and water posted at Rp25.8 trillion, mining Rp18.8 trillion, F & B Rp15.1 trillion; transportation, warehousing and telecommunication Rp13.2 trillion; basic chemical industry, chemical goods and pharmaceutical Rp8.9 trillion. PMDN realization based on project location the biggest in East Java Rp34.8 trillion, East Kalimantan Rp15.8 trillion and Central Java Rp12.6 trillion.

PMA realization based on 5 leading sectors were mining USD 4.8 billion, transportation and transportation vehicles USD 3.7 billion; basic metal industry, metal goods and electronics USD 3.3 billion. Distribution of PMA realization based on location were: the biggest West Java [USD 7.1 million], Banten [USD 3.7 billion] and East Java [USD 3.4 billion].

It might be concluded that investment realization  in 2013 could repeat in 2014 where BKPM must pursue investment target of Rp450 trillion. For that matter the policy to be adopted was acceleration of public service and permit application service for electricity installation, telephone, water, IMB Building Permit, taxpaying, and issuance of SIUP permit.

For investments in certain sectors, it was advisable for BKPM to make studies whereby to make tax holiday. It was advisable if the coming investors were directed and prioritized to the economic sector which had enough support of raw materials and auxiliary materials at home which meant import was not necessary. It became indispensable to build industry of raw materials and auxiliary materials at home.

Previously the Government stressed that foreign investment entering Indonesia must not be the type of industry which increased import of raw materials and auxiliary materials because such would widen deficit in trading account and current account. The Government should be wiser in selecting foreign investors.

Almost certainly the Government would tolerate import of capital goods because it would enhance productivity to domestic industry. To anticipate increase of import, the Government had exercised tight screening on coming investors. Those who were already operating were obliged to start downstreaming, especially in the mineral and mining industry. Foreign investors must meet two requirements, i.e. to minimize import of raw materials and auxiliary materials in line with national industrial downstreaming plan.

In line with Government’s plan to minimize deficit in current transaction [DTP], import of non oil-gas products which tend to be unproductive or consumptive must be stopped by way of increasing import tax. However import of raw materials and auxiliary materials which were vital to national industry would be exempted from the rule; this was related to employment opportunities procurement.

Direct employment in quarter IV/2013 numbered 430,107 people, where absorption by PMA was 270,792 people of which the highest absorption was by PMA 270,792 people or 62.9% or total workforce while PMDN absorption was 159.315 people. To accumulate the number employment from quarter I to IV last year, the total number of workers absorbed was 1.8 million people. By quarterly, employment absorption was fluctuating. The breakdown: by quarter I the number of workers employed numbered 361,924 people, in quarter II 626,376 people, in quarter III 411,543 people and in quarter IV 430,107 people.

One of the causes was that development differed from one quarter to another, for instance: factory construction began in quarter I, employment absorption happened in quarter II. The important thing was that unemployment could be reduced. (SS)  

Business News - February 5, 2014   

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