Triyan Pangastuti, Jakarta – Indonesia attracted $7.7 billion in foreign direct investment last year, only down slightly from the year-earlier as the largest economy in Southeast Asia managed to stock up investors' confidence in its economic resilience and prospect amid the Covid-19 pandemic.
The Investment Coordinating Board (BKPM) announced on Monday that the foreign direct investment (FDI) into Indonesia reached Rp 413 trillion ($7.7 billion), down 2.4 percent from 2019.
The largest economy in Southeast Asia fared much better compared to other countries in the region, which saw a 31 percent drop in total FDI last year, according to data from United Nations Conference on Trade and Development published on Sunday.
Indonesia's FDI in the fourth quarter rose 5.5 percent to Rp 111.1 trillion from the same period last year, BKPM data showed. The data excluded investments in the oil and gas sector and banking.
BKPM Chairman Bahlil Lahadahlia said last year's data showed investors' confidence in Indonesia.
"Many asked me why the FDI was down only by a bit. Many international institutions projected it could be down by 30-40 percent, but Indonesia was only down by less than 10 percent. That showed the confidence in us," Bahlil said.
Indonesia passed the so-called "omnibus law" last October that promised to eliminate red tapes and streamline the country's investment process. Bahlil said the law passage in October proved to the investor's President Joko "Jokowi" Widodo 's commitment and political mettle for reform.
The Covid-19 vaccine arriving in the fourth quarter helped ease concern about the pandemic, Bahlil said.Foreign investors put most of the investment in transportation, utilities, and base metal sectors from October to December, BKPM data showed. Most of the investment came from Singapore, China, and Hong Kong.
Domestic direct investment
Indonesia also saw domestic direct investment overtake FDI for the first time since BKPM first collected the data. Domestic investors put in Rp 413.5 trillion, or 50.1 percent of the total investment last year.
"The role of domestic investment was extraordinary, and we can no longer be prioritized FDI over the domestic ones," Bahlil said.
Bahlil said Jokowi wanted this year's investment to reach Rp 900 trillion, up from Rp 826.3 trillion last year.