JARKATA — Indonesia is aiming to increase foreign direct investment by 23% this year, after record inflows in 2012 helped insulate Southeast Asia’s largest economy from a slowdown in exports.
Report by Reuters
Direct investment in the final quarter of 2012 rose 23% to 56,8 trillion rupiah ($5,91 billion), taking full year FDI up 26% to around $23 billion, the country’s investment board said yesterday.
Strong investment was driven by the mining, transport and chemicals sectors, showing firms shrugged off worries over policy uncertainty, corruption and weak infrastructure to seek returns in an economy growing at more than 6%.
“Investors at home and abroad have responded positively to efforts to improve the investment climate by central and regional government, more attractive investment incentives and integrated campaigns,” said Chatib Basri, the country’s investment chief at a news conference.
Foreign inflows to the G20 economy have increased significantly since Indonesia regained investment grade status from two rating agencies a year ago. Investment makes up around 30% of the G20 economy.
Though the headline figure was far smaller than the $111,7 billion in foreign direct investment (FDI) that China attracted in 2012, Indonesia remained attractive to foreign investors compared with its Southeast Asian neighbours.
Vietnam, for example, estimated its FDI fell by 5% to $10,46 billion in 2012. Basri did not give details on the firms investing. Mining was the biggest sector despite a series of new rules that limited foreign ownership and restricted exports.
