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Investment in Indonesia Has Positive Prospects

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The government continues to work hard to create a conducive economic climate for all parties, from increasing the capacity of Human Resources (HR) to simplifying various regulations. These various steps show that investment in Indonesia has positive prospects.

Rully Anwar as Director of Capital Services AM Rully Anwar said that the investment sector in Indonesia had positive prospects in 2022. Rully explained that Indonesia’s investment realization showed improvement in 2021 after previously experiencing a decline due to the Covid-19 pandemic. However, this means that investment in Indonesia can still rise even in the midst of a pandemic situation.

In terms of Domestic Investment (PMDN), the sectors of interest include housing, industrial estates and offices. Meanwhile, on the foreign investment side, the dominant sector is the base metal and metal goods industry. Meanwhile, Indonesia’s investment prospects in the future are expected to shift from the manufacturing industry to the service sector, both for domestic investment and foreign investment.

According to Rully, Indonesia has three main potentials that attract investors. First, Indonesia has good and abundant raw materials. Second, Indonesia has human resources (HR) with large market potential. Third, economic growth in Indonesia is on a good track. These three things should be able to increase the enthusiasm of investors to continue and even increase the amount of investment in Indonesia so that they can invest more capital.

Previously, the Investment Coordinating Board (BKPM) recorded that the realization of foreign investment (Foreign Investment / PMA) reached Rp. 111.7 trillion in the first quarter of 2021, which was higher than the realization of local investment. Domestic Investment of Rp. 108 trillion.

Based on the country of origin, foreign investment from Singapore reached US$2.6 billion or 34 percent of the total. Then, from China 1.03 billion US dollars or 13.6 percent, South Korea 851.1 million US dollars or 11 percent, Switzerland 466.2 million or 6.1 percent of the total and others.

Based on the workforce, FDI absorbed 146,163 workers. Meanwhile, PMDN employs 165,630 workers, bringing the total to 311,793 workers in the first quarter of 2021. Bank Indonesia (BI) Governor Perry Warjiyo also invites global investors to immediately invest in Indonesia because Indonesia’s economic prospects are very bright. Indonesia’s solid economic growth and maintained macroeconomic stability amidst the dynamics of the global economy are conducive to the investment climate in Indonesia.

According to the Governor of BI, there are 4 (four) potential sectors to invest in Indonesia, namely the manufacturing, tourism, fisheries and infrastructure sectors. Perry explained that investment opportunities in the manufacturing sector focus on 3 Indonesian export commodities, namely automotive, textile and footwear. Meanwhile, investment opportunities for the tourism sector are focused on developing priority destinations for development and branding of Indonesian tourism (Lake Toba, Mandalika, Labuan Bajo, Borobudur, Joglo Semar, Bali, Jakarta, Banyuwangi, Bromo and the Riau Archipelago.

As for the fishery sector, investment opportunities are open, especially in eastern Indonesia for the development of aquaculture and supporting processing industries, given the huge potential of Indonesia’s natural resources. Meanwhile, investment opportunities in the infrastructure sector at the national level refer to the list of national strategic projects published by the Committee for the Acceleration of Priority Infrastructure Provision (KPPIP), consisting of 223 projects and 3 programs.

In order to support the development of infrastructure projects, Perry emphasized that BI is involved in the National Strategy for Financial Market Deepening as the implementation of structural reforms in infrastructure financing and continues to develop hedging instruments in the foreign exchange market to increase innovative financing in infrastructure development financing.

In addition to making it easier for potential investors to understand potential sectors to invest in Indonesia, the preparation of a strategic project map of investment opportunities will also have a positive impact on Indonesia’s economic growth. The more investors invest in Indonesia, Indonesia can create more jobs, develop the regional economy and increase the country’s foreign exchange.

The positive prospect of investment in Indonesia is certainly good news for Indonesia, with the arrival of investors to Indonesia, it is hoped that the economy in Indonesia can increase and absorb workers.

By: Devi Puspitasari )** The author is a contributor to the Pertiwi Institute

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