Foreign Investment Soars

Foreign Investment Soars

JAKARTA ~ Foreign direct investment approvals in Indonesia climbed 18.73 percent to US$13.88 billion in the first 11 months compared with the same period last year, National Investment Coordinating Board chief Muhammad Lutfi said this week.

Domestic investment approved in the first 11 months soared 244 percent to Rp157.52 trillion ($17.19 billion) from the previous year, he said, addressing a parliamentary commission on Tuesday.

But realized foreign direct investment dropped 45.95 percent to $4.69 billion compared with last year while realized domestic investment fell 37.14 percent to Rp16.91 trillion.

Lutfi said there were several reasons discouraging the realization of approved investments.

He said the government’s decision to raise fuel prices by an average of 126 percent in October 2005 was partly to blame for the fall in actual investment as it had increased production costs.

Moreover, he said investors were facing power and gas supply deficits to start their businesses, especially in East and West Java provinces.

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