Indef Says Jokowi's Target For Indonesian Investment To Bahlil Should Be IDR 950 Trillion, What's The Reason?

JAKARTA - Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad said the government could increase the investment target from Rp. 900 trillion to Rp. 930 trillion to Rp. 950 trillion, in line with the Law on Job Creation and the Investment Management Agency (LPI).

Tauhid said the change could be made considering the investment realization target this year, which amounted to Rp900 trillion, was decided before the Job Creation Law was drafted and the LPI was formed. This target was announced by President Joko Widodo (Jokowi) in a "mandate" to Bahlil Lahadalia.

“There should be a change in the investment target when the two instruments are already in place so that the impact can be measured. I imagine there will be a change in the 2021 investment target to Rp930 trillion to Rp950 trillion," he told Antara in Jakarta, Wednesday, June 9.

Moreover, Tauhid said that the investment target of IDR 950 trillion will be achieved with the support of a change in status from an agency to the Ministry of Investment and the Presidential Decree on the Investment Task Force.

He said the potential sector for Foreign Investment (PMA) remained in the natural resource-based sector, namely plantations and mining, while Domestic Investment (PMDN) could still be focused on the service sector.

He explained that foreign investment and domestic investment are still relatively small when compared to public investment through construction activities or through investment in machinery and equipment which is actually more.

In addition, he said the realization of PMDN and PMA will still depend on the COVID-19 pandemic situation, so the government needs to control positive cases in an effort to convince investors.

"The game changer is that the vaccinations that I see are still few. This needs to be encouraged. Especially now that COVID-19 cases are increasing again," he said.

He continued that so far the development of investment in Indonesia has begun to improve, although the trend in the first quarter of 2021 has slightly missed the target but is still normal due to the COVID-19 pandemic.

Tauhid said that the impact of improving investment on the community will only be felt for a minimum of six months to a year.

"In general, the impact of investment takes a long time, at least six months to a year, and the impact will start to appear," he said.

For information, investment realization in the first quarter of 2021 was IDR 219.7 trillion, an increase of 4.3 percent compared to the first quarter of 2020 and an increase of 2.4 percent compared to the previous quarter.

The realization of investment realization in the first quarter of 2021, which reached Rp. 219.7 trillion, contributed 25.5 percent to the national target of Rp. 900 trillion.