Despite the challenging macro-economic environment, Indonesia is hoping the country will attract higher foreign and domestic investments in 2016.
The country’s Investment Coordinating Board (BKPM) is expecting that investment realisation (or actual fund inflows) in 2016 could reach 594.8 trillion ($42.79 billion), up 14.4 per cent from 2015’s target Rp 519 trillion. While for 2015, the investment realisation could reach of Rp 540 trillion.
BKPM head Franky Sibarani said, the investment realisation over the past year has been dominated by five major countries, Malaysia, Singapore, Japan, South Korea and the United States.
In 2016, Indonesia is targeting foreign direct investments of Rp386.4 trillion and domestic investments of Rp308.4 trillion.
“Most of the investment—around 53 per cent–will target manufacturing sector (worth Rp313.5 trillion), up 17.2 per cent from 2015. We focus on raw materials and capital goods,” he said at a press conference on Friday.
He added, last year, the agency processed 17,238 permits with total investment commitment of Rp 1,852 trillion, up 45 per cent from 2015.
Some of the major projects that will kick off in 2016 are rubber company PT Synthetic Rubber Indonesia plant in Cilegon–the joint venture company of Compagnie Financiere Du Groupe Michelin and local rubber producer PT Chandra Asri Petrochemical Tbk (CAPC)–with total investment $90 million, a smelter plant for nickel in North Maluku over Rp 1 trillion and expansion of coal-gas fired in Cilegon, West Java $350 million.
BKPM is also not looking at revising the investment target for this year as Sibarani believes BKPM can net Rp4,500 trillion of principal permit from last year’s figure of Rp1,852 trillion.
So far, he stated, no investor has cancelled their investment after getting principal permits from BKPM.