Indonesia: BKPM chief pledges to assist investments worth IDR300tr as pandemic deals blow

  • The Investment Coordinating Board (BKPM) is looking to debottleneck IDR300tr worth of investment commitments in the pipeline as the pandemic slows down investment realization.
  • Despite the COVID-19 crisis, the BKPM vows to continue working hard to assist potential investors, untangling the investment process to attract higher investment realization in the country.
  • BKPM head Bahlil Lahadalia told a virtual press briefing on 9 Jul 20 that the agency would help ensure business licensing and land problems, the two biggest hurdles in the nation’s investment projects. He reported that the BKPM had facilitated IDR410tr of investment realization including from Hyundai and Vale, which had previously faced hurdles mostly relating to land and licensing matters.
  • Foreign direct investment (FDI) contribution fell 9% to only IDR98tr in 1Q20 from IDR107.9tr in 1Q19. Meanwhile, domestic direct investment (DDI) reached IDR112tr, a 28% increase y/y from IDR87.2tr
  • Bahlil said the decreasing FDI was the result of the COVID-19 pandemic. The BKPM also decided to revise down its annual investment realization target to IDR817tr, almost 8% lower than its original target of IDR886.1tr.
  • As Indonesia wants to transform the economy from primary sector industry to value-added based industry, the BKPM is focusing on attracting investors in the downstream industry. In the future, the BKPM will also try to boost investment in the medical devices industry aside from other favored sectors such as energy.

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