Indonesia records 17% growth in Q1 investments, China turns key FDI player

Indonesia has reported a 17.6 per cent increase in both domestic and foreign realized investments in the first quarter this year at Rp 146.5 trillion ($11 billion), or almost 25 per cent of the full year target of Rp 595 trillion. The realization has helped create 327,170 new jobs, according to chairman of Indonesian Coordinating Board of Investments (BKPM) Franky Sibarani.

China, the largest economy in the world, has become Indonesia’s fourth top investor with realized investments of $500 million – up 400 per cent from the same period last year.

Franky Sibarani indicated that China will continue to boost its partnership with Indonesia. A large portion of recorded investments from Chinese companies are taken up by smelter projects, such as Well Harvest Mining and Morowali project, with the latter expected to be  commissioned in May or June.

“China has shown tremendous growth in investments in Indonesia, while many countries in the European Union are in a decreasing trend. This is why the president’s presence in approaching foreign investors is extremely important,” said Sibarani in Jakarta.

Indonesia has continued to display warmer relationship with China since President Joko ‘Jokowi’ Widodo rose to power in 2014. Early this year, the president led the groundbreaking ceremony for Indonesia’s first bullet train that will be built by PT Kereta Cepat Indonesia China (KCIC) – a joint venture between China Railway International and an Indonesian consortium of four state-owned firms.

China Development Bank, the Chinese state lender, is providing three-quarters of the funding for the Indonesia rail project on generous terms and with no guarantee required from the Indonesian government. The controversial train, however, has been halted after critics pointed out that the project was too costly and unfair.

Indonesia still relies heavily on foreign direct investments (FDI), which makes up about Rp 96.1 trillion or 65.5 per cent of the total first quarter’s realized investments. Singapore remains the country’s largest contributor with $2.9 billion worth of investments, followed by Japan ($1.6 billion), Hong Kong ($0.5 billion), China ($0.5 billion) and Netherlands ($0.3 billion).

Furthermore, Sibrani said, the proportion of realized investment outside Java showed a positive trend. In the first quarter this year, the actual investment outside Java island reached Rp 65.8 trillion or 44.9 per cent of the total investment, up from 43.9% in the same period last year.

“This shows that the government’s drive to encourage more investment to outside Java island has begun to show positive results,” he said.

Report from BKPM also revealed that manufacturing sector is leading the portion of direct investments, with about Rp 111.4 trillion or 69.2 per cent. Trade and tourism sector follows in the second position with Rp 30.4 trillion or 20.8 per cent, while prime sector recorded Rp 14.7 trillion or about 10 per cent of total direct investments.

Also Read:

Singapore, others plans to invest up to $2.7b in Indonesia: BKPM 

Indonesia firms sign investment deals $10b with UK’s investors; $875m with Germany firms Indonesian regulator to introduce micro VCs, other incentives to boost startup ecosystem

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.