Speaking to reporters in Jakarta on Wednesday (24/1/24,) Indonesia’s Investment Minister, Bahlil Lahadalia, said that a total of IDR 1,418-trillion (approx. USD 90.2-billion) was invested in 2023, surpassing government targets, according to the Jakarta Globe.
President Jokowi wanted the country to generate IDR 1,400-trillion in combined investment last year. Data shows that investments coming from domestic investors totaled IDR 674.9-trillion and foreign direct investment (FDI) hit IDR 744-trillion.
“The overall investment in 2023 saw a 17.5-percent year-on-year growth,” the minister said, achieving 101.3-percent of the target.
Bahlil tried to dispel doubts over the investments in Indonesia being Java-centric. Data showed that about 51.5-percent of the combined investments went to regions outside Java, say Jakarta Globe.
“Approximately IDR 200.3-trillion of combined domestic and foreign investment in 2023 went to basic metals and non-machinery industry,” Bahlil said, adding that it was the most popular sector.
According to Jakarta Globe, the Investment Ministry put Singapore as the largest foreign investor in 2023 with a total of USD 15.4-billion, followed by China with USD 7.4-billion, Hong Kong with USD 6.5-billion, Japan with USD 4.6-billion and Malaysia with USD 4.1-billion.
Bahlil said that Singapore is actually a financial hub for many Indonesian investors who still lack an adequate financial center. Indonesian businesses favored putting their money in Singapore first rather than directly making the investment.
Data shows that FDI grew by 13.7-percent year-on-year. However, this growth is still smaller compared to 2022, which saw a 44.2-percent increase in FDI. Bahlil attributed the slower growth to an increasing baseline, among other factors, says Jakarta Globe.
“In 2021, the investment target was around IDR 900-trillion, but then the goal grew to IDR 1,200-trillion the following year,” Bahlil said, adding that “the government then raised the target baseline to IDR 1,400-trillion. So, there are two different baselines.
Another reason for the slower FDI growth is we have to admit it is not easy to attract investment in an election political year, as some investors are in a wait-and-see mode,” he added.
Source: Jakarta Globe
Stock photo by Timelab on Unsplash
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