JAKARTA - President Joko Widodo (Jokowi) has targeted that investment for Indonesia in 2021 is IDR 900 trillion. This target is much higher than the previous year which was set at IDR 817.2 trillion. Even so, this target is considered not difficult to achieve.
Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan is optimistic that the investment target raised by President Joko Widodo this year will be achieved. Because the investment realization in 2020 has even exceeded the target.
The realization of investment in 2020 reached IDR 826.3 trillion from the set target of IDR 817.2 trillion. This means that the realization of investment from January to December 2020 was 101.1 percent of the target, and grew by 2.1 percent on an annual basis or year on year (yoy).
"Will this be able to (achieve the investment target) of IDR 900 trillion? I don't think it is too difficult to add IDR 70 trillion. I think this is a very realistic figure to achieve", he said, during the Special Dialogue: Investment Challenge and Optimism in 2021, Jakarta, Wednesday, February 3.
Even though currently Indonesia's economy is experiencing a slowdown due to the COVID-19 pandemic, this target is considered quite realistic. Luhut said, one of which is thanks to the downstream program that the government has carried out since six years ago will have a big impact on Indonesia today.
The proof, he said, is that Indonesia is finalizing agreements with several foreign companies. For example, a steel company from China Tsingshan and China's Contemporary Amperex Technology (CATL) with Freeport will sign a collaboration.
With this agreement, Luhut ensured that for the next three years the investment value could reach up to USD 30 billion.
"It is very possible (to achieve the investment target that Jokowi raised). Then, CATL has signed 10 billion US dollars, and later Wayo, Tsingshan, and Freeport will sign 2.8 billion US dollars for the smelter", he said.
Not just attracting investors
Luhut said that the government did not just attract investment into the country. To ensure the quality of incoming investors, the government provides several conditions that investors must meet before investing in Indonesia.
These conditions, said Luhut, will provide benefits to Indonesia. Not only that, this requirement is set by the government while still paying attention to the survival of the surrounding community in the investment area.
One of the conditions put forward by the government to potential investors is related to the environment. Luhut said, environmental issues are important to ensure and protect them from damage.
"So investors who come to Indonesia are not arbitrary. Like investors provide first-class technology, not fake technology because it uses the environment. This is the responsibility of our children and grandchildren not to make the mistake of making technology, eventually, the environment is damaged, the first victim of our children and grandchildren", he said.
Luhut said that the government also provided conditions that there must be technology transfer. Investors must their technology away and must educate Indonesian children.
"Therefore, our children must be able to master the high technology that is there", he explained.
Then, he said, it must be done business to business (b2b). This is important so that Indonesia's debt does not increase because of the BTB system.
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Luhut said the last requirement that potential investors must meet is to absorb as many Indonesian workers as possible in each project.
"Of course, in the next 3 to 4 years we will not be able to master the technology, training will be carried out. So Indonesian people should not have a negative impact on this", he said.
Previously, the Head of the Capital Investment Coordinating Board Bahlil Lahadalia noted that investment realization throughout 2020 reached IDR 826.3 trillion from the set target of IDR 817.2 trillion.
"This means that there is an increase of approximately IDR 9 trillion from the target (IDR 817.2 trillion), so there is an increase", he said at a virtual press conference, Monday, January 25.
The investment realization achievement from January to December 2020 was 101.1 percent of the target, and grew by 2.1 percent on an annual basis or year on year (yoy).
Bahlil said that this achievement also answered the doubts of a number of parties that investment realization throughout 2020 would collapse due to the prolonged COVID-19 pandemic.
Furthermore, said Bahlil, even when the pandemic occurred in the country, several association groups predicted that the realization of the Capital Investment Coordinating Board's investment could not be more than IDR 700 trillion.
"Thank God, the stimulus then made the Capital Investment Coordinating Board laugh, and the result was IDR 826 trillion. I need to say, don't too pessimistic. Sure, there are problems, but do not be pessimistic", he said.
Meanwhile, the special realization in the fourth quarter of 2020 was IDR 214.7 trillion, up 2.7 percent compared to the previous quarter, and up 3.1 percent from the same quarter in 2019.
In detail, investment realization throughout 2020 is spread over two sub-investments. First, domestic investment (PMDN) amounting to IDR 413.5 trillion or equivalent to 50.1 percent of the total investment realization.
Second, said Bahlil, foreign direct investment (FDI) was valued at IDR 412.8 trillion, the same as 49.9 percent of last year's investment achievement.
Meanwhile, on an annual basis, the realization of investment from domestic investment grew 7 percent on an annual basis (yoy) from 2019 which reached IDR 386.5 trillion.
Based on the business sector, the domestic investment is dominated by the transportation, warehouse, telecommunications sector as much as 19.5 percent of the total domestic investment or equivalent to IDR 20.2 trillion. Then followed by the construction sector in the amount of IDR 19.3 trillion or the equivalent of 18.6 percent.
Then, housing, industrial estates, and offices at IDR 15.5 trillion or the equivalent of 14.9 percent. Then, electricity, gas, and water at IDR 9.3 trillion or the equivalent of 9 percent. The chemical and pharmaceutical industry was at IDR 8.7 trillion or 8.4 percent, and other sectors at IDR 30.6 trillion or the equivalent of 29.6 percent.
The investment value is spread across several locations, the Capital Investment Coordinating Board notes that ten provinces get the most domestic investment, including East Java, West Java, DKI Jakarta, Riau, Banten, Central Java, East Kalimantan, Main Sumatra, South Sumatra, and Kepulauan Riau.
"This is the first in history, the role of domestic investment is very useful. The domestic investment has become a bulwark for investment in the pandemic era", he said.
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